What You Need to Know About Total Loss Vehicle Claims After an Accident
If you’ve been in a car accident and your vehicle was badly damaged, you may soon hear the term “total loss” from the insurance company. For many people, this creates confusion, stress, and financial uncertainty—especially when the vehicle was essential for work, medical appointments, or family responsibilities. Understanding how total loss claims work can help you protect your rights and recover fair compensation.
What Does “Total Loss” Mean?
A vehicle is considered a total loss when the cost to repair it exceeds its actual cash value (ACV) or meets the specific percentage threshold set by state law or the insurance provider’s internal guidelines.
In other words, if fixing the car costs more than it’s worth, the insurer will likely declare it totaled.
How Insurers Determine Your Vehicle’s Value
Insurance companies typically use market data to calculate ACV, taking into account:
- Make, model, and year,
- Mileage,
- Pre-accident condition,
- Options and upgrades,
- Local market value, and
- Comparable vehicle pricing.
Please note that you are not required to accept the first offer if you believe it undervalues your vehicle. You can provide receipts, maintenance records, photos, and comparable vehicle listings to challenge the insurer’s valuation.
Understanding the Settlement Process
If your vehicle is declared a total loss, you will be offered a settlement based on ACV. You may have two choices:
- Accept the payout and transfer title to the insurance company, or
- Retain the vehicle and receive a reduced settlement (sometimes called a “salvage retention” option).
If you keep the vehicle, be prepared for a salvage title, which can affect resale, insurance rates, and your ability to secure financing.
Loan and Lease Complications
If you still owe money on a car loan or are leasing, a total loss doesn’t automatically cancel your financial obligation.
In some cases, you might owe more than the ACV. This is known as being upside down.
This is where gap insurance can help, because it covers the shortfall between the settlement and what you owe your lender.
What About Personal Items and Aftermarket Add-Ons?
Personal belongings are not part of your vehicle’s ACV, and you should remove them before surrendering the car. Items like stereos, custom wheels, or lift kits may or may not be covered depending on policy language and whether you added coverage for aftermarket modifications.
Can You Get a Rental Car While the Claim Is Pending?
Rental car coverage depends on the individual policy.
Some policies provide rentals only during repairs, but not after a total loss determination.
Always confirm how long the insurer will cover a rental vehicle, if at all.
Why a Personal Injury Attorney Can Help
A totaled vehicle can cause major disruption long before your personal injury claim concludes. An attorney can help by:
- Challenging an unfair ACV,
- Pressuring insurers to respond promptly,
- Documenting loss-of-use damages, and
- Ensuring you don’t waive future injury claims by accident.
When injuries are involved, handling the vehicle claim on your own can risk settlement mistakes that impact your overall case value.
* Main image at top by freepik.