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What happens when you are hit and the other person's insurance company says that "it will cost too much to fix your car"? Then they decide to total your car. Who puts the value on your car and do you get to keep your car?


The rules, procedures and laws regarding vehicle losses vary from state to state and from insurance company to insurance company. This situation is an individual experience and every situation is unique, but it is good to understand your rights.

In most states, insurance companies have the authority to declare a vehicle a "total loss". If they decide to allow you to keep the vehicle, the word "salvaged' may appear on your title in which case it would be illegal to operate the vehicle on the roads and highways.

A car is "totaled" when it is so damaged that it would cost more to fix it than what it's actually worth. A vehicle is only worth the Fair Market Value determined by the insurance company using procedures defined and set forth in your policy. If you don't agree on the ACV or FMV your insurer determines, you can bring in an independent appraiser at your own expense or seek the advice of an attorney.

Some companies consider a damaged vehicle a total loss when the total cost to repair it exceeds just 51 percent of the vehicle's actual cash value (because of added storage costs, rental car, etc.), while others don't consider it a total loss until it is at 80% of the ACV.

It can be hard to decide if you want to take the money they are offering or keep the car and have it repaired. If you decide to keep the car and have it repaired (if that option is available), typically you can take the ACV, minus deductibles and what the insurance company would have received at the salvage yard, and fix the car yourself.

Comment Update: We have added more text to help explain your rights.

Comment Update: Re: Difference between it being your own insurance company, with whom you have a contract, and someone else's.

You are not obliged to accept their terms, but typically that would preclude them from settling with you. The other company has a responsibility to make you whole and you always have the option to not accept their offer.

Comment Update: Please read our related articles on GAP Insurance.


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15 Responses to "What happens when you are hit and the other person's insurance company says that "it will cost too much to fix your car"? Then they decide to total your car. Who puts the value on your car and do you get to keep your car?"
  1. carlos restrepo

    My son was in a car accident in Florida. Some kid hit him from behind. The kid had a suspended license. He hurt his back and went to the hospital with the accident report. The accident report was sent to the insurance company. My question is, why is the other insurance calling my son and offering money if it has been reported already? He took his car to the shop to get it fix. What should he do?

  2. Anonymous

    You have offered helpful information. Thanks!

  3. Anonymous

    I recently puchased a salvage title reconstructed car and already obtained a full coverage insurance for the value of $5000. If my car will not be drivable due to a future accidient the Insurance company will pay me compensation according to this $5000 value and also my premium is based on this value. So you can get a full coverage on salvage title vehicle.

  4. Anonymous

    What rights do I have other than not settling if other than my own ins. co declares total and offer only 1/2 of replacement cost (in like value)

  5. Anonymous


  6. Anonymous

    When the insured hit my car and has been paying premiums to the insurance co, why cant they pay the less than totaled repairs, rather than up the cost of repairs, declare my car totaled and then pay me almost twice the estimated repairs of the dealers estimate. Now my insurance co will not cover collision and the guy that hit my car got the citation for pulling out in front of me. I think they total cars so that they can go back to the insured and raise their rates sky high. Meantime, I am penalized (with a good driving record and keeping an older car immaculate mechanically and otherwise) by not being able to continue paying for coverage I had before this accident. Both insurance companies will stick it to you, I now see.

  7. Anonymous

    RC (Replacement Cost) - (minus) Depreciation = (equals) ACV (Actual Cash Value)

  8. Anonymous

    vague on "actual cash value" of a totaled car.

  9. Anonymous

    very easy to undestand

  10. Anonymous

    it answered my question precicly

  11. Anonymous

    i still dont know what gap insurance will do fo me. please explain. thamnk you

  12. Anonymous

    You didn't say one word about the difference between it being your own insurance company, with whom you have a contract, and someone else's, with whom you don't. You have zero connection with someone else's company and are not necessarily obliged to follow their dictates...are you?

  13. Anonymous

    Their insured ran into my tail end at a red light (yes it was red). Assume the "value" of the damage at $5,000. If I were driving a vehicle evalued at $20,000 his insurance co would be required to repair it. However, since I was driving an "older" car, the insurance co decalared my car to be worth $1,700 and thats all they are going to pay! What a rip off! Their insured deprived me of my vehicle and ability to get around...what does it matter what kind of car I was driving?? It seems to me the insurance co has 2 choices, either repair my car to where it was 1 minute before their insured wrecked it, OR go out and replace my car with an exact duplicate they say they can get in the market for $1,700. If so, go get it and replace my vehicle! Dont wreck my car, then belittle me with a slap in the face $1,700!! My leather seats are heated and air conditioned for gosh sakes!! I can cool or heat my passenger at 10 degrees hotter or cooler than the driver. Replace that for your lousey $

  14. Anonymous

    because my car was totaled and i was not the driver. the ins. co. do not want to give me the value of the car instead want to give me less andkeep the car the amt. that they want to give me is the amt that would take to get the car repaired only a hundred dollar difference. why totally it. to keep from paying hundred dollars difference when all they had to do was pay for the repairs the same either way.

  15. Anonymous

    This answer takes a whole paragraph to say that an insurance company can call your car "totalled". But what are my rights when they do so? Am I really stuck with their low-ball payment which is insufficient to put me in another car?