# Total Loss Car Insurance – Handling a Total Loss Car Insurance Claim

The value of a vehicle begins to depreciate from the moment it is driven outside the car dealer shop. This makes insurance companies calculate the actual worth of a car, known as ACV. ACV is the actual cash value of a car; factors such as price, mileage, car condition, and others can determine the ACV value of your vehicle.

Total loss car insurance is a condition where the cost to repair a damaged car is more than the car’s actual worth. The damage could have occurred due to an accident, theft, or natural disaster that couldn’t have been avoided.

Total loss car insurance refers to a specific coverage that comes into play when your vehicle sustains severe damage beyond repair.

A vehicle will be considered a total loss by some factors, which include the pre-accident condition, the extent of damage, and the car’s market value.

Depending on the state in which you reside, your insurance company will declare your vehicle a total loss when the money it costs to fix it exceeds its actual cash value.

## Totaled Car

Your car can be classified as totaled when the insurance company has concluded that your car repairs exceed the worth of your vehicle.

Your car doesn’t have to look destroyed before an insurance company will classify it as totaled. The insurance company has to consider multiple reasons and classify it as totalled.

Some of the reasons to be considered before declaring your car totaled are if there is an accident, a theft situation, a natural calamity, or failure to change car oil regularly, leading to complete engine failure.

However, your car may be a total wreck, and insurance companies will not deem it a total loss because it is not beyond repair or the cost of repair is not more than the ACV.

Insurance companies have their way of determining if a car is indeed totaled.

## How Insurance Companies Determine if a Car is Totaled

Insurance companies have several ways of determining a totaled car. However, it solely boils down to the states the drivers reside in.

There are two methods car insurance companies use to determine a totaled car, they are listed below:

### Total Loss Formula (TLF)

This is a formula that is calculated to determine a totaled car. The formula is calculated like repair cost + Salvage Value = Actual Cash Value.

If the cost of repair and salvage value is more than the CV, the vehicle will be declared totaled. A lot of states in the US uses this method.

### Total Loss Threshold

This formula is used by the remaining states that do not use the TLF method. It is calculated to determine a totaled car. The formula is calculated like this:  the damage to the vehicle and a certain percentage of the car’s ACV must not be exceeded.

## When a Vehicle is Declared a Total Loss

Once the above formulas have been carried out and your vehicle has been declared a total loss. The insurance companies can sell it to recover most of their losses.

Your insurance company will inform the Department of Motor Vehicles of your totaled vehicle.

If you disagree with the company’s decision, you can negotiate with evidence to support your claim for them to increase the settlement amount.

You will receive compensation based on the terms of your insurance policy.

## Handling a Total Loss Car Insurance Claim

If you find yourself in a situation where your insurance company claims your car needs to be filed as a total loss, follow the steps below to handle the situation:

• Understand the claims process
• Initiate the claims process
• Access the damage
• Evaluate the vehicle’s value
• Review the settlement offer
• Accept the settlement offer if you accept it
• Negotiate the settlement offer if you do not accept it
• Remove all personal items from your car
• Release the vehicle to the insurance company
• Begin shopping for a vehicle replacement

## FAQs

### What Happens if The Vehicle Declared a Total loss was leased to me?

If your leased vehicle has been declared a total loss, the lending company or leasing agency will receive the claim settlement.

If the event that the settlement amount is more than you owe, you will be given the difference. However, if it is less than what is owed you will be responsible for filling it in.

### Can I Keep My Vehicle after it was Declared a Total Loss?

No, you cannot keep your vehicle after it has been declared a total loss especially when you have accepted the settlement dues.

Your insurance company will take full possession of the vehicle; however, some states may permit you to keep a car declared as a s total loss.

You can keep the car in some states by buying the car back from the insurer and then proceeding to repair and use it. However, the vehicle has to be insured, titled, and plated before you can legally drive it again.

### What Happens if My Car is Totaled in an Accident I Did not Cause?

If your car is totaled in an accident, you did not cause then you can file a claim against the driver’s car liability insurance.

You can also file a claim through your own insurance company if you do not wish to haggle with someone else’s insurance company.

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