Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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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 (BBB A+). 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 Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 24, 2020

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Things to remember...

  • If your auto insurance company totals your vehicle, you may receive benefits that can be applied toward the purchase of a new car
  • The decision about totaling a vehicle is made independently
  • If you file a claim, your premium may increase

Many drivers love their vehicle for the first year or two of ownership, but there usually comes a time when drivers want to trade in their vehicle for a newer and more stylish model.

If you have recently been in a car accident, you may be wondering if your insurance company will total out your car.

When a vehicle is totaled, the insurance benefits may be paid first to a lender to pay off any outstanding car loans in place. Any additional benefits can be used by the driver as a down payment for a new car.

This sounds like it would be a convenient way to move forward with your car buying plans. However, you cannot simply ask your insurance company to total out your vehicle. With a closer look at the claims process, you can learn more about what to expect when you file a claim.

Find the best rate for the insurance coverage you need. Enter your zip code above to compare quotes today.

When You File an Auto Insurance Claim

Immediately after you are in an accident, you should notify your insurance company and begin the claims process.

With most providers, you can either submit a claim over the phone or online. With both options, you may need to submit supporting documentation for your claim, such as an accident report from the police and photos you took at the scene.

Paying Your Deductible

As part of the claims process, you will need to pay your insurance deductible. A common deductible amount is $500, but this may vary slightly.

The deductible is owed with your claim regardless of whether your vehicle is totaled or not.

As you can see, the claims process and the potential to have your vehicle totaled by insurance is not a free process for you to benefit from. If you receive proceeds after your vehicle is totaled, the deductible amount will be subtracted from the proceeds.

Determining the Cost of Damage to Your Vehicle

A skilled adjuster from your insurance company will then examine the vehicle. He or she will ensure that all damage on the vehicle is related to the specific accident that you filed the claim for.

The adjuster will also estimate the cost of the repairs, and this may be corroborated by one or several quotes from auto service centers.

Keep in mind that this is an independent process, and you cannot simply request that your vehicle is totaled. The cost of repairs must be documented and is not typically open to negotiations or requests.

Estimating the Car’s Current Replacement Value

A car insurance policy pays benefits up to the limits of the coverage that you purchased, but this amount is also limited by the replacement value of the car.

For example, if your car is worth $10,000 in today’s market, has $12,000 in damages, and has $20,000 in collision coverage, the limiting factor would be the current market value of the vehicle.

Keep in mind that most auto insurance providers will total the vehicle if the cost of repairs approaches the market value. The cost of repairs does not typically need to exceed the vehicle’s market value.

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How to Dispute the Auto Insurance Company’s Decision

There are sometimes instances when the driver does not agree with how a claim was settled. For example, you may think that the estimated repair costs are too high or too low.

This simple factor can play a major role in determining whether a car is totaled out by insurance or not.

If you want to file a dispute about any aspect of the claims process, your best option is to begin by writing a letter to your insurance company and providing supporting documentation to back up your beliefs.

Some claims disputes may easily be resolved through this step, but other matters may escalate. You may agree to dispute the matter in an arbitration hearing.

A third party arbitrator may be used to help you and the insurance company come to an acceptable resolution that both parties can agree on.

Filing a complaint about the claim with your state’s insurance board is another option to consider, but this process may take a lengthy amount of time to resolve.

A final option available to you if you want to dispute your claim settlement is to pursue legal action. You can hire a lawyer who specializes in this area of the law.

The lawyer can try to negotiate or settle the matter out of court, but some legal issues do result in a full trial in front of a jury and judge.

How a Claim Affects Your Auto Insurance Premium

An insurance claim can cause your insurance premium to increase. In fact, any accident or even traffic citation that you receive can result in a premium increase, and this is because these events can blotch your driving record.

Your driving history is carefully reviewed by your provider each time you renew your car insurance coverage, and a blemished record usually results in higher insurance costs.

Shopping for Better Rates

Each provider analyzes your driving history differently, and some may be more lenient about accidents and traffic citations than others.

With this in mind, you can see that comparing rate quotes from several providers can help you to save a small fortune on your car insurance premium.

If you have decided to shop for better car insurance rates, begin the process by selecting at least three different car insurance companies to request quotes from.

Ideally, these will be companies that have a solid financial strength and a great reputation with consumers.

Insurance quotes can usually be requested online or by calling the providers during normal business hours, but you can also request quotes through an auto insurance broker.

When you request quotes for new auto insurance, remember that your the following can affect your rates:

  • coverage limits
  • coverage types
  • your deductible amount

Select these with care, and request similar quotes from each provider to make the comparison process easier.

Some drivers want their car to be totaled by insurance, and others may prefer to have their current vehicle repaired after an accident. Regardless of your wishes, this will be an independent decision made by your insurance company after a careful review of the facts.

You can, however, dispute the decision and change providers if you are not happy with how your claim was handled.

Compare car insurance quotes right here by entering your zip code below!