Can An Insurance Company Total Your Car


Insurance companies sometimes total cars as a result of an accident or theft. Total loss means that the cost of repairing the car plus the current market value of the car is more than what it is worth. If a car is totalled then there is no guarantee that it will be worth repairing. Insurers reserve the right to total a car.

Typical Insurance Company Approach

There are a wide range of insurers and their approach to total loss varies along with the terms and conditions of the policy. The most common approach is that after being notified of a vehicle’s damage, an insurance representative will evaluate the situation. If they deem the damage as minor, they may issue a repair estimate to the vehicle owner. If, however, the damage is too severe for repair—or if the cost of repair is greater than the vehicle’s current market value—the insurance company may declare the car a total loss.

What Happens When Your Car is Totalled?

When a car is officially declared a total loss, the car’s owner has to then negotiate with the insurance company and decide what to do with the car. Insurance companies will typically offer the vehicle’s market value as compensation. The vehicle then becomes the property of the insurance company and is usually sold for salvage at auction. The insurance company takes the proceeds from the sale and applies it towards the claim.

Benefits & Pitfalls of Totalling a Car

In the case of a total loss, some people may wonder if they should just pay for the repairs themselves and keep the car. But that depends on the extent of the damage and if the car is repairable. If there is more than minor damage to the vehicle, it may make more sense to total the car and receive the insurance company’s offered compensation. Future issues with the car may cause headaches, and it can be difficult to name a dollar value of future damages.
The biggest benefit of a total loss is that it alleviates stress from loss of the vehicle due to an accident or theft. Receiving payment from the insurance company of the car’s market value can help cover the costs for a replacement vehicle.
On the flip side, totalling a vehicle may have drawbacks as well. For example, insurer payment for total losses may not cover the full amount owed on a vehicle loan. In these cases, the lender may seek an additional payment from the car owner to make up the difference.

Factors Impacting a Total Loss

The decision whether or not to total a car is based on several factors. These include different insurance companies having different requirements and subjective measures of how much is too much damage to repair. Also, auto repair costs can vary significantly between states, so what is considered too much damage in one state may be acceptable in another. Other factors such as a vehicle’s age and safety concerns can also affect the total loss decision.

Assessing the Damage

In cases of damages that may cause a vehicle to be totaled, it is imperative to look at the value of repair versus replacement. Would it be more cost effective to buy a new part, repair the damage, and perform any other necessary work? Or would it be more prudent to make use of the insurance provided and receive a payout? The answer solely depends on the unique situation and what outcomes are desired.

Importance of Research & Asking Questions

The importance of research and asking questions can never be understated. Do the research and put in the hard work when researching vehicles and their insurance. Be sure to ask insurers their opinion and ask questions – a lot of questions! After that, sitting down and comparing the information can help determine if a car is worth repairing or if it should be declared a total loss.

Making an Informed Decision

When deciding whether to total a car or proceed with repairs, it is important to make an informed decision. Consider the condition of the car before the accident, the cost of repairs, the age of the car, and the potential risks of proceeding with any repair work. These will all be important factors in deciding if it is better to total or repair the car.

Leveraging the Insurance Company

In some cases, an insured driver may be able to leverage the insurance company and obtain additional coverage, beyond what is given in the policy. Insurance companies understand that repairing a vehicle beyond market value may be excessively expensive, so they will often provide an additional coverage if/when needed.

Negotiating with the Insurance Company

Negotiating with the insurance company can be tricky but it can also work in the insured driver’s favor. When presented with repair costs that exceed the car’s market value, try to negotiate with the insurance company to receive a total-loss payout that covers more than just the market value of the car. The goal is to receive a better payout than what the insurance company originally offered, which may involve negotiating for rental car costs or other additional coverage.


In conclusion, totalling a car is a difficult decision best left to the discretion of the insured driver. Consider the options carefully and do your research. Use the resources available to you, such as knowledge of the regulations, current market value and rental rates, in order to have an informed discussion with your insurance provider. Ultimately, the decision to total or repair lies with the insured driver, but having an informed and knowledgeable partner in the insurance company could make a big difference to the outcome.

Marjorie Turcios is a seasoned leader and management expert with over 25 years of experience. She has held various leadership positions in private industry, government, and education. She is an advocate for creating win-win solutions and has worked to create successful, lasting change in corporations and organizations. Marjorie is an award-winning author of several books on leadership, mentoring and coaching, and effective communication skills. Her passion is to help others discover their potential and reach new heights in their professional life through her writings. Marjorie resides in Dallas, Texas where she enjoys spending time with her family, traveling to different places around the world, and speaking at conferences about her areas of expertise.

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