PlayInfoBox

Home /Education /What to Do After an Accident Vehicle Is Declared a Total Loss

What to Do After an Accident Vehicle Is Declared a Total Loss

When an insurer declares your accident-damaged vehicle a total loss, here is generally what happens next and what choices you have.

  1. Understand how a total-loss determination is made

    When the estimated repair cost exceeds the vehicle's assessed market value, an insurer will typically treat the case as a total loss rather than authorizing repairs.

  2. Understand how the payout is calculated

    The total-loss payout is generally based on the vehicle's market value immediately before the accident, adjusted for depreciation.

  3. Choose how to handle the wreck

    You typically have a choice between handing the vehicle over to the insurer for the full assessed payout, or keeping the vehicle yourself and receiving a payout reduced by the wreck's residual value.

  4. If you hand the vehicle to the insurer

    When you hand the vehicle over to the insurer, the insurer often takes care of scrapping and deregistration on your behalf as part of the process.

  5. If you scrap the vehicle yourself

    If you choose to keep the wreck, the remaining steps follow the standard scrapping process: choosing a scrapyard and completing deregistration on your own.

Understanding your coverage helps make sense of the payout

How much your total-loss payout comes to depends heavily on what coverage and add-ons were included in your policy. Reviewing what your own-damage coverage includes can help you understand where the final number comes from. This is general information, not financial or legal advice β€” check the specifics of your own policy with your insurer.

If you decide to scrap it yourself

If you choose to keep the wreck rather than hand it to the insurer, the remaining process is the same as scrapping any other vehicle β€” choosing a licensed scrapyard and completing deregistration from there.

Frequently Asked Questions

If a vehicle is declared a total loss, do I have to scrap it?

No. You can choose to receive a payout reduced by the wreck's residual value and keep the vehicle yourself, whether to repair it or sell it, instead of handing it over.

What if I disagree with the total-loss payout amount?

If you dispute the assessment, you can typically request a re-assessment from an independent claims adjuster, or file a complaint with your local financial or insurance regulator for a formal dispute resolution process.