Dealing with the aftermath of a serious car accident is overwhelming enough on its own. But when the insurance company tells you your vehicle is a “total loss,” a whole new set of problems lands on your plate. You still need to get to work, pick up your kids, and live your life. So what happens now? And more importantly, how do you make sure you actually get what your car was worth?
At 612-Injured, we help accident victims in Minnesota navigate exactly these situations every day. This guide will walk you through how the total loss process works, what your rights are, and how to fight back if the insurance company tries to shortchange you.
What Does “Total Loss” Actually Mean?
Insurance companies declare a vehicle a total loss when the cost to repair it exceeds a certain percentage of its actual cash value (ACV). In Minnesota, a vehicle is typically considered a total loss when repair costs reach or exceed 80% of its pre-accident market value. So if your car was worth $15,000 before the crash and repairs would cost $12,000 or more, the insurer will likely declare it totaled rather than fix it.
It is important to understand that “total loss” does not mean worthless. Your car still has value, and you are entitled to be compensated for that value. The problem is that insurance companies often use their own valuation tools and databases to lowball what your vehicle was actually worth on the market.
Step 1: Understand Whose Insurance Pays
The first thing to figure out is which insurance policy applies to your situation. This depends on who was at fault for the accident.
- The other driver was at fault: You file a claim under the at-fault driver’s property damage liability coverage. Their insurance company is responsible for compensating you for your vehicle’s value.
- You were at fault or fault is disputed: You may need to file under your own collision coverage, assuming you have it. You would pay your deductible and then your insurer may seek reimbursement from the at-fault party later through a process called subrogation.
- Hit and run or uninsured driver: If the at-fault driver has no insurance or fled the scene, your uninsured motorist property damage coverage (if you have it) would apply.
Knowing which policy you are dealing with matters because it affects how aggressively you can push back on valuation disputes and what timelines apply.
Step 2: Know What You Are Owed
When a car is totaled, the insurance company owes you the actual cash value of your vehicle at the time of the accident. This is not the price you paid for it, and it is not the cost to buy a brand-new replacement. ACV reflects the market value of your specific vehicle, accounting for its age, mileage, condition, and comparable sales in your local area.
Here is what should factor into that valuation:
- The year, make, model, and trim level of your vehicle
- Your car’s mileage at the time of the accident
- Pre-accident condition, including any recent repairs, new tires, or upgrades
- Comparable vehicles currently for sale in your local market
- Any aftermarket additions that added value to the car
Beyond the vehicle itself, you may also be entitled to reimbursement for sales tax and registration fees you will need to pay when you buy a replacement vehicle. Do not assume the insurance company will include these costs automatically. You often have to ask.
Step 3: Do Not Accept the First Offer Without Reviewing It
Insurance adjusters are trained to settle claims quickly and for as little as possible. The first offer you receive may be fair, but it also may not be. Before you accept anything, take these steps:
- Request the valuation report: Ask the insurance company to provide the complete CCC ONE or comparable valuation report they used to calculate your car’s ACV. Review every comparable vehicle they listed and check whether those comps are truly similar to yours.
- Do your own research: Look up your vehicle on sites like Kelley Blue Book, Edmunds, CarGurus, and AutoTrader. Search for similar vehicles in your area and print or save those listings. If comparable cars in your market are selling for more than what the insurer offered, you have grounds to dispute.
- Document your car’s condition: Gather any service records, receipts for recent repairs, and photos that show your car was well-maintained before the accident. This evidence supports a higher valuation.
- Submit a counteroffer in writing: If you believe the offer is too low, respond with a formal written dispute supported by your research. Many insurers will negotiate, especially when you back up your position with data.
Step 4: Sort Out Your Rental Car Coverage
While your total loss claim is being processed, you will likely need a rental vehicle. Most auto insurance policies include some form of rental reimbursement coverage, but the rules around it vary. Generally speaking:
- If the other driver was at fault, their liability insurance should cover a reasonable rental while your claim is being settled.
- If you are going through your own insurer, your rental coverage limit will apply, which might be something like $30 to $50 per day up to a set number of days.
- Rental coverage typically ends once the insurer issues your total loss settlement, even if you have not yet found a replacement vehicle.
Push back if the insurer tries to cut off your rental before you have had a reasonable amount of time to replace your car. In Minnesota, insurers are required to act in good faith, and prematurely ending rental coverage when delays are their fault may be a violation of that standard.
Step 5: Handle Your Auto Loan or Lease Carefully
If you were still making payments on your totaled vehicle, this situation gets more complicated. The insurance payout goes directly to your lender, not to you. If you owe more on the loan than the car is worth, you are responsible for that remaining balance unless you had gap insurance.
Gap insurance covers the difference between what you owe on a loan and the actual cash value of the car. If you did not have gap coverage, you may still owe your lender thousands of dollars even after the insurance settlement is paid. This is a situation where speaking with an attorney can help you understand all of your options, particularly if the accident was caused by someone else’s negligence.
What If the Insurance Company Refuses to Negotiate?
Unfortunately, not every insurer plays fair. If you have submitted a counteroffer with solid documentation and the insurance company still will not budge, you have several options available to you.
- Request appraisal: Most auto insurance policies include an appraisal clause that allows both sides to hire independent appraisers to determine the vehicle’s value. An umpire then resolves any disagreement between the two appraisals. This process can be very effective in getting a fair outcome.
- File a complaint with the Minnesota Department of Commerce: If you believe an insurer is acting in bad faith or violating state insurance regulations, you can file a formal complaint. This creates a record and sometimes motivates insurers to reconsider their position.
- Consult a personal injury attorney: If the total loss resulted from an accident caused by another driver’s negligence, an attorney can help you pursue compensation not just for the car but for medical bills, lost wages, pain and suffering, and other damages. A lawyer can also add significant pressure to a stubborn insurance company.
How 612-Injured Can Help You
Property damage disputes after a total loss can feel like a full-time job on top of recovering from an accident. Our team at 612-Injured has experience handling insurance companies that try to undervalue vehicles and delay fair settlements. We understand Minnesota insurance law and know how to build the kind of documented case that gets results.
Whether you are dealing with a lowball offer on your totaled car, a denied rental claim, or a more complex personal injury case stemming from the same accident, we are here to help. We work on a contingency fee basis, which means you pay nothing unless we recover compensation for you.
Do not let the insurance company decide what your losses are worth. Call 612-Injured today for a free consultation on your car accident and let us help you get back on the road and move forward after your accident.