Crashed your car? Bummer. Even worse is getting a call from your
company saying it's a total loss and should go to the junk
Your attachment to your vehicle may be sentimental. In some
cases, your bond may be financial: You may not be able to replace
the totaled car with the money your insurance company is willing to
Typically cars are totaled when damage exceeds 65 or 70 percent of
the vehicle's market value. Rick Ward, director of auto claims for
MetLife Auto & Home, says the standard for deciding when a car
is a total loss varies by company and may be set by state
regulators. You can find out the threshold by contacting your
Working with your auto insurance company
find that many older cars are simply not worth repairing.
"We determine the value of your car through market research,"
explains Ward. "There are three software providers that provide
vehicle valuations, blue book averages and what cars are selling
for in your area through dealer networks." But this software isn't
available to consumers.
According to the Highway Loss Data Institute, the average cost
for collision repair in 2009 was $4,245. If you think your totaled
car is valuable enough to justify a repair, you can contest your
insurance company's decision to declare it a total loss, but be
prepared to provide evidence that the car is worth the effort.
If you can demonstrate good maintenance and mechanical
improvements, you may be able to win your totaled car a reprieve.
Its age and mileage will be key factors.
Keeping a vehicle that your car insurance company has
If you decide to accept the insurer's decision to total your car
but you still want to keep it, your insurer will pay you the cash
value of the vehicle, minus any deductible that is due and the
amount your car could have been sold for at a salvage yard. It then
will be up to you to arrange to make repairs.
"They will cut you a check," says Ward, and then you're on your
Dan Young, senior vice president of insurance relations the
CARSTAR auto body repair group, says safety should be your primary
concern when keeping a totaled car. "If there is a way for you to
find someone to repair the car or make it safely drivable, that is
great," he says.
If damage to the totaled vehicle is mostly cosmetic, you may be
able to put it back into service for a modest cost. However, if
fixing the car means reaching deep into your pockets, you may be
better off letting it go.
There is a good reason why
companies are cautious about fixing badly damaged cars, says Ward.
"Cars are complicated. All damages are not visible. Once you start
dismantling, often you find additional damage."
Peter Moraga, spokesperson for the Insurance Information Network
of California, suggests that you think twice about repairing a car
that has been seriously damaged. If the professionals who work for
company think the car is beyond repair for a reasonable cost, it
"A lot of damage goes unseen," he says."There can be cracks in
the frame or damage to airbags."
Finding car insurance for a totaled vehicle
Ward says you may run into trouble when you seek auto insurance
for a car that has been declared totaled. Your ability to buy
collision and comprehensive coverage may be affected.
"That is really up to each individual company," he says. Before
you decide to fix your car, check to see if that is an issue." Some
insurers will not accept a car with "a branded title," he adds. "It
basically puts a stamp on it that says it is a salvaged
Ward notes that the federal government has established a
database called the National Motor Vehicles Title Information
System to provide information to car shoppers. "All total losses
are recorded by the insurance companies. What this does is provide
consumers with a database to see if a car has been previously
salvaged." That means don't count on being able to unload your
vehicle on a buyer.
Is repairing a totaled car worth the effort?
Only you can decide whether repairing your totaled car is
The best thing is to be well informed," says Ward. "Talk to your
mechanic. Do your research. Make sure you know what you are getting
Young has seen more and more drivers deciding to repair and keep
their 'totaled' vehicles.
"People don't want to go down the road of having a $500 per
month car payment anymore" because of the tight economy, says
Young. "Cosmetically it may not look as good as it did before, but
they are not going into debt for a new car purchase."