3 min read
Whether your car goes "smash" or the weather goes "boom," the same thing happens no matter how random the accident is. You get the dreaded call from your insurance company letting you know your car is a total loss.
What does "total loss" mean?
A car is declared a total loss when the cost to fix it is more than its worth. In California, it has to be more than 75% of its cash value. But here's the kicker—depending on how the insurance company crunches their numbers and not how crunched your car is, they can still call it a total loss. So, even if your wheels are still drivable, you could still have a total loss situation on your hands.
Insurance payout
What happens next is your insurance company will offer you a settlement based on your car's Actual Cash Value before the accident. The ACV is decided based on age, mileage, condition, and pre-existing damage.
But don't expect to receive a big check right away. The settlement will subtract the deductible you owe and if you still owe money on the car loan. Once everything is tallied, you'll either receive the payout directly or the money goes to your lender if the car was financed.
Salvage title or junk
Your car will likely end up with a salvage title. In California, the insurance company is required to tell the DMV and apply for a salvage certificate. Once that happens, your car's title is branded as "salvage" and declared a total loss, but it may still have some value, so here are your options.
Road less traveled
You can keep the car if you think it's worth fixing or still holds some sentimental value. However, your payout will be less because the insurance company will subtract the salvage value from the total. It's also a big risk to fix your car because it needs to pass the necessary safety requirements before you can legally get it back on the road.
Popular path
Most folks take the insurance payout and move on. They just have to wait for their settlement check to arrive, then find a tow company to haul their car away. In California, it is more likely to be sent to a salvage yard, where it will be stripped for parts while the rest of your car is recycled for scrap metal.
Take the easy route
If you don't want to deal with all the red tape California can throw at you or the hassle of offloading your car alone, Peddle can help. We make it easy to sell your car, no matter how
busted it is. Get an offer today, schedule a free pickup, and get paid as soon as tomorrow.
