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What your options are when your car is totaled

A car is í░totaledí▒ when it is so damaged that it would cost more to fix it than what it's actually worth. Insurers differ on how much damage must occur before they consider a car totaled, but over 50% damage will generally do it. When that happens, you generally have two options:

  • Take the money and run. Most insurers will offer you the carí»s actual cash value (ACV), minus any deductibles you might have. Totaled cars are generally sold to salvage yards and the insurance company keeps those profits. If you doní»t agree on the ACV your insurer proposes, you can bring in an independent appraiser at your own expense or seek the advice of an attorney.
  • Keep the car and have it repaired. In this scenario, you can take the ACV, minus deductibles and what the insurance company would have gotten at the salvage yard, and fix the car yourself. Keep in mind that these insurance proceeds are usually not enough to fix the car, so make sure you think it through. In addition, totaled cars generally need to go through a state inspection and insurers are sometimes hesitant to insure cars that have been totaled (which will be noted on your title).

Whichever option you choose, make sure it's an informed decision and don't sign anything if you arení»t certain of the terms!


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