What to do with a Totalled Car

6 minute read Published on Nov 17, 2020 by BrokerLink Communications

What to do with a Totalled Car

Accidents happen every day, but you never think that you will be the one involved. When you’re in an accident, your mind races trying to figure out what happened, but when the dust settles, and you realize that everyone is okay, your attention quickly turns to your car’s damage. While you’re hoping your car’s damage is not extensive, there could be a possibility that your vehicle is considered a total loss, which can be a total bummer.

Knowing the steps to take when you’ve been involved in an accident is crucial to get back on the road. Luckily, we’re here to help you along the way!

How do you know if your car is totalled?

If your car’s damage has lowered its value by 70 per cent to 80 per cent, it’s considered totalled, or a write-off. For example, if your vehicle is worth $10,000 and the repair estimate is $8,000, the vehicle would likely be considered totalled. Basically, if you decide to fix your damaged vehicle, the amount you would pay for repairs is above the current value of your car. When this happens, the insurance company considers your car a write-off or a total-loss, hence the term “totalled” car.

What do you do with your totalled car?

Once your car has been deemed a write-off by the insurance company, there are some steps you can follow to move forward and get back on the road!

First, start the car accident claim filing process as soon as you can following the accident. File the car accident claim with your BrokerLink insurance advisor. We will reach out to your insurance company who will contact you and may be able to recommend a shop where you can take your car for an estimates for the repairs. Once your car is assessed for damages, the estimate will be made for the cost of repairs.

When you get the estimate for your car’s damages, your insurance company will calculate and determine if your car is a total loss by taking the cash value of your car at the time of the accident, minus the value after the accident. If your car can be fixed, your insurance company will take care of the costs of fixing the damage.

Now comes the good part, when you get the cash settlement and can replace your totalled vehicle. You may even want to upgrade to a newer model! The amount of the cash settlement is based on the actual cash value of your car in your local market, so start shopping!

What do you do if your totalled car is leased?

Your payments don't stop because your car is off the road. If your car is leased, get in touch with your lending company to let them know about the accident. Once the amount of the cash settlement has been determined, your insurance company will issue a cheque to your lender. If your lease amount is more than the settlement amount, you will have to pay the remaining balance of your lease and negotiate the repayment conditions with your lender.

What do you do if your totalled car is financed?

Even if your car is totalled, you will still owe your financing company. If the market value of your car is smaller than what you still owe, you’ll end up owing more than your car’s value. Aside from replacing your car, you will also have to pay the balance owing on your car loan. In some cases, you might be able to roll it into a deal for a new car!

Reach out to BrokerLink if your car is totalled

Why go with an insurance broker if your car is totalled? Here are a few reasons:

  • The great thing about going with a broker is we do all the work for you! We have connections with insurance companies across Canada. We will reach out to our extensive networks to ensure you get the coverage you need at a great price.
  • Based on our experience, we know how insurance companies deal with totalled cars
  • BrokerLink is an expert when it comes to car insurance
  • Get an instant online quote with our quote tool
  • We are licensed insurance experts. We know the insurance rules and regulations so you don’t have to. When you deal with a broker, you’ll walk away knowing your investment is protected.
  • At BrokerLink, we offer insurance on your terms. We make it easy. You can reach us by phone, online or in person. We also offer extended hours in many of our locations for your convenience.

Still not sure if you should go with BrokerLink if your car is totalled? Here’s a pro tip from one of our brokers:

If your car is totalled, it’s always wise to ask for advice from your insurance advisor, who not only can help with your car accident claim, but also with negotiating with your insurance company.

FAQs on what to do with a Totalled Car

Is it okay if I don’t accept the first cash settlement amount offer for my totalled car, and perhaps wait for the second one?

At the time of a total loss, your insurance company will look at the value of the vehicle. They will use the blue book value or websites like autotrader.ca to find the average price of that year, make, and model sold in the same region you’re living in is. Once the value is determined, the offer is submitted to you and that will be the insurance company’s offer. You can contest the amount with the company if you feel the vehicle is worth more.

Can I contest the cash value determination by the insurance company for my totalled car?

Yes. If you feel the vehicle is worth more that the cash value determined by the insurance company, you can contest. The company will ask you to hire your own independent appraiser to assess the amount. If the appraiser’s report is verified, the company can increase the offer no more than the presented appraised amount.

I added some customizations to my car before it got totalled, will that affect the cash value determination?

Yes. It is crucial that if your vehicle is customized, you advise your Insurance Advisor of the customization, the amount of the customization, and the date it was customized (month and year). This is necessary to ensure insurance advisors include the additional customized amount in your policy so you’re covered in the event of a total loss.