After a vehicle has sustained considerable damage, one obvious question comes to mind.
“Is my car totaled?”
The answer to that question involves various factors including the actual cash value of the vehicle, the salvage value, the ability to repair the vehicle, as well as state laws. For most states, if a vehicle’s repair cost is 75% or more of the vehicle’s value, it will be deemed a total loss. If you have rental car coverage, keep in mind that once an adjuster has provided a settlement offer for the totaled vehicle, the insurance company will not cover the cost of a rental car any longer.
To settle the claim, the totaled vehicle must be released to the insurance company. If requested, the vehicle may be retained as salvage and the salvage amount will be deducted from the settlement. This means that you can keep the vehicle, but you won’t get the full payout for it once the claim is settled. Some companies will not keep physical damage coverage on a salvage vehicle because they won’t pay for the same vehicle twice. Other companies will simply require proof that all the damage has been repaired.
If your vehicle is totaled and you do not keep it, be sure and call your agent to have it removed from the policy.