The Collision Law Center
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Total Loss Frequently Asked Questions

1. How does the insurance company determine my vehicle’s value?

The market value is determined by different methods including:

  1. obtaining listings of comparable vehicles in the local market area;
  2. relying on generally recognized sources in the motor vehicle industry such as guidebooks and electronic databases;
  3. quotes from licensed dealers in the local market area.

Various factors are considered such as the year of the vehicle, any options, the mileage and the pre-loss condition.

2. What if I have a deductible?

If you are subject to a deductible, the insurance company will pay you the value of the vehicle minus the deductible amount.

3. What if I still owe money on my vehicle?

If you still owe money on your vehicle, you must provide the insurance company with the lienholder’s information. Typically, the lienholder gets paid first and any money left over will go to you. If you owe more money than what the vehicle is worth, the lienholder would get paid first and you would be responsible to the lienholder for any remaining balance. If you have “GAP” insurance coverage, this coverage may pay the difference between the actual cash value of your vehicle and what you still owe on your loan.

4. What happens to my vehicle if it is declared a total loss?

In most cases, the insurance company will make arrangements to pick up your vehicle from wherever it is located and will have it moved to one of their storage locations. Generally, you will transfer the vehicle’s title to the insurance company and they will issue you (and/or your lienholder) a total loss settlement check. In most cases, the insurance company will keep the vehicle, but in some occasions, they will let you keep the vehicle and they will deduct the salvage value of the vehicle from the total loss offer.

5. What happens if the repairs process has begun and then additional damages are discovered which should have caused the vehicle to be a total loss in the first place?

Unless the additional damage is very severe, the insurance company will usually continue to pay for the repairs, even if the total cost of repairs now exceeds the value of the vehicle.

6. If my vehicle sustained frame damage, does this mean that it will be a total loss?

Not necessarily. The key factor in determining total loss is what it costs to fix the vehicle. Frame damage can usually be repaired.