Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati....

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Mar 28, 2022

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The Full Review

  • Your state and auto insurance company determine a total loss vehicle
  • Typically, your insurer considers a car totaled if it costs more to repair than its worth
  • You need collision and comprehensive coverages to cover a totaled vehicle

A car accident or air bag deployment doesn’t mean your car is totaled. Likewise, vehicle damage doesn’t mean a total loss.

When is a car considered totaled? Though the meaning of totaled varies by state, a vehicle is typically totaled if repairs cost more than the car’s value.

However, each state determines if the damage must equal the total value of the car or just a percentage.

Your car insurance coverage also determines if your totaled car is covered. Otherwise, you’ll pay out of pocket to replace your car.

Keep reading to learn when a car is considered totaled and what insurance coverages you need.

When is a car considered totaled?

Several factors determine whether or not a car is totaled, which varies by state and insurance company. Though damages may look severe, it doesn’t mean your car is totaled.

Most car insurance companies use a simple formula to determine whether or not a car is totaled. If the cost of repairs plus the salvaged worth is more than the vehicle’s actual cash value, it’s considered totaled.

Salvaged value includes any working parts that the insurance company sells after an accident. Tires, electrical components, and the engine retain value if undamaged in an accident.

According to Kelley Blue Book, today’s market determines a car’s actual cash value. As a result, a vehicle’s value fluctuates, depending on the market.

For example, say repairs cost $10,000, and the salvaged value is $15,000. If the car’s actual worth is $20,000, your insurer considers it totaled.

Some states rule that a vehicle is totaled if repairs and the salvaged worth is a percentage of the actual worth. For example, Florida determines that a car is totaled if repairs are 80% of the cash value.

How much will insurance pay for my totaled car? Auto insurance generally offers your vehicle’s worth, not what you paid for it or what it will cost to replace it.

You can dispute the offer from your car insurance company if you feel your car is worth more than it wants to pay. Your auto insurance company uses the vehicle’s age, condition, and type to calculate your payout.

Submit an independent appraisal and negotiate with your auto insurance company to increase your settlement.

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What auto insurance covers a totaled car?

While most states require a minimum of liability coverage, that coverage doesn’t protect your vehicle. Instead, liability coverage pays for damages and injuries to others if you cause an accident.

You need full coverage for your car insurance to pay for your totaled car. So, what does full coverage insurance cover?

Full coverage car insurance includes collision, comprehensive, and other coverages mandated by your state, such as medical payment, personal injury protection, and uninsured/underinsured motorist coverages.

Collision insurance pays to repair or replace your vehicle if damaged in an accident. For example, collision coverage kicks in if you total your car hitting another vehicle or tree.

Comprehensive coverage pays for damages unrelated to an accident, such as fire, theft, vandalism, and acts of nature like hail and tornadoes. If a hurricane totals your car, comprehensive insurance covers the costs.

Shop around to find the cheapest full coverage auto insurance. Compare multiple companies since every insurer offers different rates.

If you’re wondering how to get a new car after a total loss, your car insurance probably won’t cover the cost.

Remember that full coverage won’t cover buying a new vehicle unless you have guaranteed replacement coverage. Typically, your car insurance company offers what the car is worth, not what it costs to replace it.

What happens if you still owe on a totaled car?

Let’s say you buy a new car. After a year, an accident totals the car. Do you still have to pay off the loan? The short answer is yes — you are still responsible for the loan balance.

Cars depreciate quickly, meaning they lose value when you drive them off the lot. As a result, you’ll likely owe more than the car is worth, at least for the first couple of years.

Your lender mandates what car insurance coverages you need. Usually, it will require GAP insurance, which pays the difference between what you owe and your car’s value.

If you owe $40,000 on a vehicle, but it’s only worth $30,000, GAP coverage steps in if it gets totaled.

How does an accident affect auto insurance rates?

Your driving record significantly impacts car insurance rates. Auto insurance companies look at your driving record to determine how risky you are to insure, including any accidents, tickets, or DUIs.

This table shows how much your driving record affects rates. Take a look at average annual rates from top companies based on driving records.

Average Annual Auto Insurance Rates Based on Driving Record
CompanyAverage Annual Rates with Clean RecordAverage Annual Rates with 1 AccidentAverage Annual Rates with 1 DUIAverage Annual Rates with 1 Speeding Violation
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
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One accident increases your auto insurance rates by around $80 a month, and multiple accidents send them  through the roof. Drive safely and avoid accidents and tickets to keep rates low.

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The Bottom Line: When is a car considered totaled?

Each state determines when a car is totaled. While some states require repairs to exceed the car’s cash value, other states require damages to be a percentage of the value.

Collision, comprehensive, and GAP coverages help pay for a totaled vehicle. Collision covers damages from an accident, comprehensive pays for damages unrelated to an accident, and GAP coverage pays the difference between your car’s value and what you owe.

Add full coverage car insurance to protect your vehicle. While full coverage rates are higher, it provides more coverage.

Shop around to find the lowest full coverage auto insurance rates. Compare multiple companies to find your best deal.