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If you have been involved in a severe auto accident that has caused significant damage to your car, your insurance might declare your car totaled. This means that the car has been deemed a total loss, as the cost of repairing it is higher than its value.

In this case, your insurance will send you a check as compensation after a few days or weeks. It’ll be worth the value of your totaled car, but how much is that exactly?

Calculating the value of a totaled car is not easy. However, knowing how this value is calculated may help you negotiate to get a better claim from your insurance company.

Factors that Contribute to Your Totaled Car’s Value

The Type of Car

Of course, high-end and classic cars will be worth more, as they depreciate in value differently.

The Car’s Mileage and Age

The older the car is and the more miles it has on the odometer, the less it’ll be worth. 

The Car’s Condition

The condition of the vehicle when it was totaled will have an impact on the value that will be paid out to you in compensation. Previously well-maintained vehicles will be worth more.

As a result, going forward, keep receipts for servicing, repairs, and replacements that are made on the car. This will help you prove that your car was in good condition at the time of the accident.

Contributory Negligence

If the insurance company finds that you caused the accident, they are likely to send you less in compensation. A certain percentage will be deducted depending on the actions that caused the accident.

The Car’s Cash Value

This is the value of the car, all market factors taken into consideration, minutes before the accident occurred. Most insurance companies will not repair a car if the cost of repair is more than 80% of the cash value.

The actual cash value will determine the amount that you will receive in the payout.

Technology tools

Insurance may also use technology tools to come up with an estimate for the value of your totaled car. They do this by utilizing proprietary software.

Although you may not be able to access the exact software that your insurance company uses, you can find some resources online that do a similar job. For example, the Kelley Blue Book value is a reliable source that can give you an estimate.

You can also run searches on Edmunds or Auto Trader or go through classified ads and compare prices for totaled cars that are similar to yours. This method should be a last resort, but in any case, these numbers should serve as estimates to help you negotiate with your insurer.

Final Thoughts

Unfortunately, it is not uncommon to receive an insurance payout for your totaled car that is significantly less than what you were expecting. This can be caused by various factors, such as the car depreciating faster than what was calculated in your loan.

You may also be servicing a car loan with a high interest rate. If the interest is factored in with the loan, you may end up receiving much less than you had expected. 

To avoid such a disappointment, ask your insurance agent what you should expect to receive if your car gets totaled.