Marissa Hayes is a technical editor and contributing writer. She holds a Bachelor’s Degree in history, and she was the editor of the literary magazine, The Bluestone Review.

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Written by Marissa Hayes
Insurance Writer & Expert Marissa Hayes

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker

UPDATED: Jun 28, 2022

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The Short of It

  • A totaled vehicle is a car that can’t be fixed or costs more to repair than what it’s worth
  • Comprehensive, collision and liability car insurance can be used to cover totaled cars
  • A vehicle’s fair market value will be used by the car insurance company to calculate the value of the car

After an accident or collision, an insurance adjuster will review any damage to the vehicle. If the vehicle is a total loss, the car insurance company will pay either you or your loan provider. So is it bad if the insurance company totals a car?

By definition, a totaled car is either:

  • A car that would cost more to fix than it is worth
  • A car that can’t be repaired

A totaled car (also called a total loss) is covered by comprehensive, collision, or liability insurance, depending on the cause and who is at fault. How does a total loss claim affect your future insurance rates? What happens in a total loss claim? Read on to find out.

If your car has been totaled and you need insurance for a new vehicle, shop around to save. Start by typing your ZIP code in the free tool above for free quotes from top companies.

Is it always bad if the insurance company totals a car after an accident?

Whenever you file a claim, there’s a chance that it will increase your insurance rates. That’s true whether the car is a total loss or can be repaired.

Totaled cars can be covered by comprehensive, collision coverage, or liability insurance. If another driver is at fault, and their liability coverage pays the claim, it may not affect your rates.

However, that’s not the only issue that can arise with a totaled car. You may still owe money on a loan for that car, and if the insurance payout is less than what you owe, you might wind up out-of-pocket.

Furthermore, the car’s title will be branded as salvage, which will make it harder to insure if you decide to keep it.

So, yes, there are situations when having your car totaled can be a bad thing, but that’s not always the case. In most cases, insurance will pay to replace your car without any issues.

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How much will insurance pay for my totaled car?

If you own your car, you will receive a payout for the cash value of the vehicle. If your car is totaled and you still owe on the loan, then the payment will be sent to the loan provider minus the deductible.

To find the fair market value of your car, which is the price that a willing buyer and seller would agree on without the damage, you can use a totaled car value calculator.

The totaled car value calculator calculates the value of your car before an accident minus any car rental replacement and fees then finds your vehicle’s actual cash value (ACV)

The ACV is the cash value of your vehicle added to the dealer price or manufacturer’s suggested retail price (MSRP) and divided by two.

Some companies may offer a new car replacement add-on to your policy. This coverage means the company will pay out the amount to buy your car again new and is usually only offered on cars less than three years old.

Do I need to notify the DMV if my car is totaled?

In most states, your car insurance company is required to notify the Department of Motor Vehicles (DMV) by filing a Notification of Owner Retained Late Model Vehicle.

This classification will list your vehicle as having a salvage title. A salvage title means that your vehicle has been totaled by an insurance company.

What do I do when the insurance wants to total my car, but I want to keep it?

Even if your car was labeled totaled by an insurance adjuster, you may want to keep your vehicle. Most insurance companies have a system that allows this to take place.

If your car can still be driven, but it will cost more to fix it than its cash value before the accident, your insurance company will most likely still label your vehicle a total loss.

Even though the insurance adjuster determines the value of the insurance payment for totaled cars, you can always negotiate with the adjuster as long as you can provide proof that the cash value was greater than what the insurance provider claims.

It’s legal in most states to keep your vehicle after it’s been totaled by the insurance company. You can even repair your totaled car on your own and get it back on the road if it’s still drivable.

However, there are some requirements you must meet in order to do this. First, you must own the vehicle outright. Cars with a loan won’t qualify. Second, you have to comply with your state’s laws for totaled vehicles. And finally, you’ll have to find a car insurance company that will insure a salvage vehicle.

You should also consider the potential resale value of your vehicle before you make any repairs.

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How to Negotiate With Car Insurance Adjusters About A Car Total Loss Claim

As mentioned above, you must prove that the adjuster’s findings leave room for negotiation.

You can do this by using the formula for the totaled car value calculator and actual cash value. If this doesn’t satisfy your insurance provider, your next step can be to hire legal representation.

Once you reach a value that works for both you and the car insurance company, be sure to obtain a written settlement agreement. This will help to avoid any confusion and provide documentation for all parties involved.

How does a totaled car affect you?

If your car is deemed a total loss by an insurance company, is it bad if the insurance company totals a car? There’s no right or wrong answer, but there are a few possible downsides to a total loss:

  • Your car insurance rates may increase
  • You may own the difference between what the insurance company pays and what you owe on the loan
  • Your car will have a salvage title if you decide to keep it

If you’re unhappy with the value given to you by the insurance adjuster, you can negotiate with your provider by utilizing the actual cash value and fair market value of your car.

Depending on your state, you may also be able to keep your car and repair it on your own. If you do that, you will need to find insurance for a salvage title. Enter your ZIP code in the free tool below to search for car insurance quotes for totaled vehicles in your area.