Protecting Your Rights: What To Know About Car Total Loss Claims When You’re Not at Fault

A woman suffered total car loss despite not being at fault during a police chase in Broken Arrow, Oklahoma. Alleged shoplifters were attempting to flee when they crashed their getaway car into Samantha Short’s van. Besides a totaled car, Short incurred several physical injuries and was out of work for days.

Total car loss entails intensive damage whereby the calculated repair costs exceed the vehicle’s value. The calculation for total loss may differ depending on state laws and the vehicle’s condition before the accident.

One advantage of totaling a car is the possibility of claiming total car loss insurance. The recoverable money could help drivers get a car replacement and fund other related costs.

Recent statistics reveal that more than 5 million car accidents happen annually in the US. While not every accident results in totaled cars, having legal knowledge about it is practical.

Hiring an accident injury lawyer can be crucial, especially when you’re not at fault. They can communicate with the insurance company on your behalf and ensure a more successful settlement. In addition, they can also prevent other parties from undermining your rights.

Understand car total loss and vehicle owners’ rights better at The Personal Injury Center. It is an online resource center for legal learning and networking with the best local lawyers. 

Key Takeaways
  • A vehicle becomes a totaled car when the repair costs surpass its actual cash value (ACV) or fair market value (FMV).
  • Generally, the auto insurance of at-fault parties pays for the cost of repairs for total car loss.
  • The four main types of total loss car insurance include collision, comprehensive, property damage liability, and uninsured or underinsured motorist insurance.

What is a total loss?

A total loss occurs when the car becomes irreparable. Even if it is reparable, the repair costs exceed the vehicle’s Actual Cash Value (ACV)

ACV is the estimated market value of the totaled vehicle before the crash. Claimants should not confuse ACV with the replacement cost. Replacement cost covers the value of a new car, which is often more significant than the ACV.

The official declaration of total car loss comes from the car insurance company. After vehicle owners report the car crash, an insurance adjuster or appraiser will investigate and draft damage quotations. Thus, car owners may not independently claim their vehicle was totaled.

Types of Car Total Loss

Auto insurance companies only approve a total loss claim upon determination of a total loss. Claimants should be aware that there are two types of a total loss: actual and constructive. Both classifications grant policyholders a valid insurance claim.

Actual total loss

Actual total loss happens when the crash renders a car completely dysfunctional or lost. For example, the auto accident was so intense that the claimant’s vehicle was destroyed. The engines and features have become unresponsive, and the car can no longer run.

Constructive total loss

A car does not have to be entirely dysfunctional to be totaled. A constructive total loss exists when the potential repair costs exceed the vehicle’s ACV. 

Insurance companies may entertain a total loss claim process even when the car or its parts remain functional. It’s because the cost of repairing the damaged parts or features exceeds the car’s market value before the accident. 

Car Total Loss Claims Process When Claimant Is Not at Fault

Parties not at fault may file a claim against the at-fault party’s property damage liability coverage. Before filing a claim, you should file a report with their insurer and ask for their cooperation. 

File a report with your auto insurance company

Parties with an auto insurance policy should file a report to their insurer following a car crash. This step prompts your insurance company to investigate and determine faults and liabilities. After determining your lack of fault, the insurance company may defend you against unjust claims from other parties.

Your insurance company might coordinate with the at-fault party’s insurer. Clear and constant communication between the two insurance companies expedites the total loss claims process.

However, there are instances when the at-fault party’s insurance does not cover other expenses, especially medical bills. Informing your insurer will open options on how to cover miscellaneous expenses. 

Filing a claim from your insurance company for personal injury has a statute of limitations, which may vary depending on applicable local insurance laws.

Claim against at-fault driver’s auto insurance company

You should lodge a formal claim against the at-fault driver’s insurance policy, known as a third-party claim. This step prompts the at-fault party’s insurer to investigate and calculate potential costs. 

Similar to filing a claim with your insurance company, filing third-party claims has a time limit. You should be mindful of when your right to file expires.

If everything goes well, the at-fault party’s insurer will reimburse the ACV of a totaled car. In addition, most states hold at-fault parties liable for car insurance deductibles.

Suppose the opposing party does not agree that their client is at fault. You may opt for arbitration or go to court.

Types of Insurance Policies That Cover Car Total Loss

The claims you can raise against at-fault parties depend on what insurance policies are in effect. You should familiarize yourself with the different insurance policies before filing.

Collision insurance

Collision insurance covers the cost of total loss or property damage from collisions with stationary objects or moving vehicles. It may also apply when the claimant’s vehicle sustains property damage from collision accidents like rollover or hit-and-run accidents.

The average cost of collision insurance is typically around $380 to $400 annually. A policyholder’s driving history, car market value, and deductible package may affect the price of their collision insurance.

Comprehensive insurance

Most car insurers bundle collision coverage with comprehensive coverage. Both insurance policies complement each other because comprehensive insurance covers car damages not caused by collisions. 

Comprehensive insurance may cover total loss claims due to the following: 

  • Natural disasters
  • Animal attacks
  • Riots
  • Carnapping
  • Falling objects

The average comprehensive insurance cost is relatively lower than other policies. Insurance companies calculate the insurance premium based on the insured car’s ACV.

Property damage liability insurance

Property damage liability insurance covers damages that the policyholder causes to another vehicle. It usually does not cover damages the policyholder incurred on their car.

Obtaining property damage liability insurance is a requirement in all 50 US states. The costs involving property damage liability insurance vary per state. Additionally, policyholders may opt for full or partial coverage. 

Uninsured or underinsured motorist insurance

There are instances when at-fault parties do not have auto insurance to cover the costs of totaling a car. Despite setting up property damage insurance, others have a low coverage limit. In these instances, you may file a claim against the driver’s uninsured or underinsured motorist insurance

Most states’ uninsured or underinsured motorist insurance covers hit-and-run accidents. The states that do not provide this coverage include::

  • California
  • Colorado
  • Georgia
  • Illinois
  • Louisiana
  • Ohio 

Recommended Steps When Filing an Insurance Claim

The denial rate of car insurance claims ranges from one to forty-five percent, depending on the claimant’s circumstances. Parties should refrain from acting randomly and without legal guidance when filing insurance claims. The following recommendations may raise the chances of approval:

Review your insurance claim

There are many ways to file an insurance claim. Most companies allow you to submit reports online. Others have physical offices with agents to assist you in making claims.

You should review your claims thoroughly before signing them. Even minor clerical errors can interrupt the processes and cause delays. 

Ensure that the claims are accurate and reasonable. Moreover, expect adjustments later but do not lowball yourself.

Schedule a damage assessment

Scheduling a damage assessment will prompt the insurer to assign a claims adjuster. This personnel will investigate the extent of damage and determine the value of potential reimbursement. Companies may deploy multiple adjusters in more complicated cases.

Most inspections last an hour or two. Aside from physical examination, the attending adjusters may ask the driver questions. Showing photographs right after the car was totaled can help them with their investigation.

Coordinate with your financing company

Even when claiming against the at-fault driver’s insurance company, keeping in touch with your auto insurance company is practical. Although insurance companies have different ways of handling claims, your insurance company could provide helpful insights. They could work with the other company to meet your demands.

Additionally, your insurer could point out whether the opposing insurer follows legal standards. Their assistance can help you protect your rights and interests throughout the claims process.

Finalize the assessment 

After the inspection, the claims adjuster will determine whether the car is totaled. In addition, they will declare how much of the insurance coverage they will pay.

The adjuster will report their assessment of the car’s ACV and deductibles, including the salvage value. You are free to disagree with the adjuster’s findings. If the claimant has no opposition, they may finalize the assessment and sign the paperwork.

Release the motor vehicle

After accepting the settlement, you must surrender your motor vehicle to the insurance company. In most arrangements, representatives from the insurer will get the totaled car and deliver it to a storage facility. After salvaging sellable parts, the remainder of the car will be torn apart and flattened. 

Receive the payment

After surrendering the car, the insurance company will deliver the total car payout to the claimant. Insurance companies often release the money personally, by mail, or by electronic bank transfer.

Compensation from car insurance payout is generally non-taxable. However, components considered non-economic damages could be subject to tax. Consult a lawyer for further clarifications.

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Calculation of Compensation

Insurance companies follow the total loss formula to calculate a total car payout. After resolving the base amount, companies often make adjustments depending on the circumstances of a car crash.

The total loss formula deducts a car’s salvage value from its ACV. If the result does not exceed the estimated repair costs, the car is not totaled.

In other states, insurance companies follow a total loss threshold instead. It is a fixed percentage of a car’s market value. The percentage ranges from 60% to 100%. If the repair costs exceed the percentage, the car is not totaled. 

Challenging a Car Total Loss Assessment

Totaling a car can be a heavy financial burden. After all, claimants could lose their vehicle, and the payout would often be insufficient to purchase another. 

If you disagree with a total loss assessment, you should prove your car’s damages did not exceed the ACV or total loss threshold. Once accepted, you may receive appropriate compensation and still keep the car.

Negotiating With Car Insurance Adjusters

Even if you agree that your car was totaled, you may still question the proposed payout. These recommendations will help you negotiate for fairer compensation:


Dissatisfied claimants may use other companies’ online calculators to exhibit that they are receiving a much lower compensation. Refer to renowned sources like the Kelley Blue Book.

Seek appraisal from a third-party

Similar to seeking a second opinion on your health, you can also seek third-party appraisers’ opinions to get fairer compensation. Insurance companies other than yours or the at-fault driver’s insurer could provide a different calculation.

Present a counteroffer

After you have done your research and reached out to third parties, you may present a formal counteroffer to the adjuster. In the counteroffer, summarize your claims and explain why you deserve higher compensation. Make sure to negotiate respectfully and professionally. 

File a complaint

If the adjuster does not agree with your counteroffer, you may raise your concerns in court. If the court finds merit in your case, it may order the insurer to comply with your demands.

Hire a car accident lawyer

Hiring a trustworthy car accident lawyer is crucial. They have the necessary knowledge and experience to negotiate with insurance companies. Moreover, they can advise you on how to protect your rights better.

Totaled Car Under a Loan

Car crashes can happen even while a car is still under a loan. While claimants could hold at-fault parties liable and seek compensation, their insurer would prioritize paying the lender first. Consequently, car owners may only be entitled to whatever is left. 

When buying under a car loan, it is advisable to purchase gap insurance. This type of insurance covers a percentage of the property damage liability insurance. Likewise, it significantly lowers your potential out-of-pocket expenses when your cars suffer a total loss. 

New Car Replacement

New car replacement insurance is an add-on policy that reimburses policyholders with the value of the insured vehicle at its brand-new price. Unlike other policies, the insurer will not base their calculations on the ACV. This policy can provide immense financial relief, especially in extreme situations like total car loss.

The new car replacement insurance is only available to vehicles carrying full coverage auto insurance. Because of its features, this policy is relatively more expensive than others.

Did you know?

Car owners have the option to sell their totaled car to a junkyard. Sellers must surrender the vehicle’s title certificate to the junkyard upon purchase. The salvager will later stamp the document as “JUNKED” to deter re-titling or re-registration.

Coordinate With a Trustworthy Car Accident Lawyer

Experiencing a total car loss can be devastating and costly. To remedy the expenses, vehicle owners should check on their insurance coverage.

Depending on the state, claimants without fault gain a few advantages. One of which is holding at-fault drivers accountable and claiming compensation from their insurance policies.

However, dealing with insurance claims and settlements can be tiring and burdensome. Fortunately, it can be a task that can be shared with experts. It is best to work with a first-rate car accident lawyer.

The Personal Injury Center offers a free consultation to assist interested parties in exploring their legal options. Undertake this complimentary service to seek counsel and connect with the best local lawyers. 

You deserve maximum compensation for car total loss when not at fault. Connect with experienced totaled car lawyers through The Personal Injury Center.

FAQs on Total Car Loss When You’re Not at Fault

Yes, owners may keep their totaled cars. However, the calculation of potential claimable coverage may change. Discuss this matter with your auto insurance representative.

Yes, individuals with previously totaled cars may pay a more expensive premium than others. Insurance companies often adjust their prices based on the policyholder's driving history. Those more likely to get into an accident may pay higher costs.

No, there is no direct correlation between total car loss claims and credit standing. A person's credit score depends on their credit history and credit card accounts.