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Will insurance pay for my car if it’s “totaled?”

By John Singleton on May 21, 2015

If you ever experience the misfortune of being involved in a car accident, your auto insurance company may determine that your car has been “totaled”— that the cost of repairs exceeds a threshold of what your car’s fair market value (FMV) was prior to the accident.

This point of no return differs from company to company, but a typical benchmark is 80 percent. If your car’s FMV is $10,000, and your repairs are under $8,000, the insurance company will pay for repairs. If your repairs amount to $8,000 or more, your car will be deemed totaled, and you will be issued a check for the FMV of your car.

You would hope that the check you receive will equal or exceed the amount you may owe to a money-lending institution. However, certain circumstances may result in your check being less than that amount. In this scenario, guess who’s legally obligated to pay the difference? You are. If you have gap insurance (which covers the difference between what you receive and what you owe), problem solved. But that’s a preventive measure, not a post-accident solution.

Most insurance companies are willing to negotiate the amount of compensation you’ll receive for your totaled vehicle. Do your homework to make sure the FMV of your car as stated by the insurance company is accurate. If another driver is at fault for the accident, you can file a third-party claim with the other driver’s insurance company to make up the difference on what you owe.

As a service to our community, the Virginia car accident lawyers at GibsonSingleton Virginia Injury Attorneys will review your auto insurance policy to ensure you have adequate coverage. Call (804) 413-6777 to schedule this free appointment.