Posted on November 20th, 2025

Understanding the Total Loss Process After a Car Accident

If your car is severely damaged in an accident, your insurance company might declare it a “total loss.” This means the cost to repair your car is more than what the car is worth or meets a certain threshold set by state law or your insurer. Understanding what happens next can help you navigate the process and make informed decisions.

What Does “Total Loss” Mean?

A car is considered a total loss when the cost to repair it exceeds a specific percentage of the vehicle’s actual cash value (ACV) before the accident. This threshold varies by state and insurer but is typically around 70% to 80% of the car’s value.

The Total Loss Process

1. Assessment: After an accident, the insurance company sends an adjuster to inspect the vehicle and estimate the repair costs.
2. Determination: If the repair costs exceed the total loss threshold, the insurer declares the car a total loss.
3. Offer: The insurer will offer you a Low Ball offer on the car’s actual cash value (ACV), which is its market value before the accident, minus any deductible.
4. Settlement: If you accept the offer, you’ll sign over the car’s title to the insurance company. In some cases, you may have the option to keep the car as a “salvage vehicle” for a reduced payout. If you feel the offer is a Low Ball offer, reach out to Collision Consultants of North America for a free consultation.
5. Payoff: If you have a loan or lease, the insurance company will pay the lender first. Any remaining amount is paid to you. If the settlement doesn’t cover the remaining loan balance, you may be responsible for the difference unless you have gap insurance.

What Happens to Your Car?

Once the insurer takes possession of your totaled car, it’s usually sold at a salvage auction. The vehicle may be dismantled for parts or rebuilt, but it will carry a “salvage” title, indicating it has been significantly damaged.

What Should You Do?

• Remove personal belongings and license plates from the car.
• Turn over all keys and paperwork to the insurance company.
• Cancel the car’s registration and insurance, if applicable.
• Review the settlement offer—if you believe your car was worth more, you can call Collision Consultants of North America to negotiate with the insurer or provide evidence of its value. This is a process, You will Invoke Your Appraisal Clause and give them Collision Consultants of North America’s information. At that time your insurance company has to also hire their own Independent Appraiser that is not associated with them. The 2 of us create our own Total Loss Evaluation that we share with each other, Negotiate the Actual Cash Value, agree to amount of settlement, sign an award letter and send it to your insurance company to pay you the Actual Cash Value we agreed upon, not what they offered. (See blog on Total Loss Process)

Frequently Asked Questions

• Can I keep my totaled car? Yes, but the payout will be reduced by the car’s salvage value, and you’ll need to follow your state’s guidelines for registering and insuring a salvage vehicle.
• What if I disagree with the settlement amount? You can hire Collision Consultants of North America or try and negotiate with your insurer, provide documentation such as recent sales of similar vehicles, maintenance records, or upgrades to support your case.
• Does total loss affect my insurance rates? Filing a total loss claim may impact your premiums, depending on who was at fault and your insurer’s policies.

Conclusion

Having your car declared a total loss can be stressful, but understanding the process can help you manage the situation more effectively. Be sure to review all communications from your insurer, keep records, and reach out to Collision Consultants of North America to ask questions if you’re unsure about any step.