Who Gets the Insurance Check When a Car Is Totaled?

When the insurance company determines your car is totaled, that means the cost of repairs is greater than its estimated value. However, that doesn’t guarantee you can pocket the cash when your accident claim gets paid. Who gets the insurance check when a car is totaled depends on the following:

• You Own the Vehicle

If you’re the owner of the car and don’t owe anything on it, the negligent driver’s insurer may pay you the Actual Cash Value (ACV) of the vehicle in its pre-crash condition. The ACV is typically based on the price of similar models in your area with the car’s age, mileage, and wear and tear factored in.

Your insurance deductible won’t be a factor if the other party’s insurance company pays the claim. However, if you’re partially at fault, are responsible for the accident, or no one is at-fault for the damage to your car, you’ll likely pay the deductible. This is also the case if the at-fault driver is uninsured or underinsured.

• You Still Owe on Your Vehicle Loan

The bank or finance company will receive the settlement proceeds if you have a balance on your loan. Then the insurance company will write you a check for the remainder (if there is any). Oftentimes, the check is issued to you and your lender; you must endorse it before submitting it to the lender, which then sends the title of the vehicle to the insurer.

An insurance settlement won’t cover the balance you owe on a vehicle loan. The reason is vehicles depreciate over time and insurance companies don’t cover amounts more than a vehicle is worth (unless you file a personal injury claim). You’ll most likely still have to make payments if the car is totaled; failing to do so can hurt your credit.

Will My Insurance Company Reimburse Me for a Totaled Car?

Not every insurance policy pays for a totaled car. Collision coverage will cover the cost of repairs minus the deductible. Meanwhile, comprehensive coverage covers losses caused by a weather event, theft, vandalism, or hitting an animal. Other types of insurance that can pay for a totaled car include property damage liability coverage (when the other driver is at-fault), uninsured/underinsured motorist coverage, and new car replacement coverage. 

However, gap insurance may cover the difference if you owe more on your loan/lease than what the insurance company says the vehicle is worth. 

What to Do When the Insurance Payment Is Too Low

A low payout won’t leave you asking, “Who gets the insurance check when a car is totaled?” Instead, you’ll be wondering how to make up the difference. One way is to negotiate with the insurance company. If you provide documentation (including receipts, photos, and paperwork) showing the car was worth more than you were offered, the insurer may reconsider its offer. Then you’ll need to figure out whether you or a lender or leasing company will get the check.

Contact The Law Offices of Jacob Emrani

Our car accident attorneys in Los Angeles are experienced at negotiating with insurance companies. We may not be able to control who gets the insurance check when a car is totaled, but we can help you receive a fair settlement. Working with clients throughout California, we can help maximize the payout so there’s enough left over for you after the balance of the loan or lease is paid. For a free consultation, call 888-952-2952.