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What Happens if My Car is Totaled in Colorado?

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Carl Pash

Carl Pash

Carl Pash is the President of Alliance Insurance of the Rockies and has over 25 years of experience working with insurance claims. Carl has a mission to match customers with the best insurance products through personally getting to know his customers, allowing him to protect their financial security.

Did you know that over 90,000 car accidents occurred in Colorado last year alone? Though we all hope it never happens, most of us will be in a car accident at some point during our lives. So you’re in an accident. Everyone is okay, but your car is totaled. What happens next? We know this can be a scary and overwhelming process, so we’ll explain what happens when a vehicle is totaled and what your options are.

At Alliance Insurance of the Rockies in Colorado, we sell home, auto, and renter’s insurance that provides the financial security you need while staying within your budget. What happens when your car is totaled depends on your coverage. If you aren’t sure if your vehicle is protected in case of an accident, contact us today. We’d be happy to discuss insurance options that fit your needs.

What Qualifies as a Total Loss in Colorado?

Colorado’s total loss threshold is 100%. That means if the cost of repairing your car and your car’s salvage value are equal to or greater than your car’s value, it’s a total loss. In a covered loss, insurance will pay you the car’s value and sell it for salvage or repair.

There are two ways to determine your car’s value: actual cash value (ACV) and stated value coverage. ACV is what you would get if you sold your car today, taking into account depreciation. Stated value coverage is a specific amount you and your insurance company agree on when you purchase the policy. Most car policies use actual cash value unless you have a classic or collectible vehicle.

Your insurance company will determine the value of your car using one of these two methods and then pay you that amount minus your deductible.

Types of Car Insurance

Whether or not your loss is covered will depend on what type of coverage you have. Two types of coverage will pay for a totaled car: collision and comprehensive.

  • Collision covers damage caused by an accident with another car or object.
  • Comprehensive covers everything else, like theft, vandalism, weather damage, or hitting an animal. If you only have collision coverage, your car will only be covered if it’s damaged in an accident with another car or object.

Colorado law only requires you to carry liability coverage, which will pay for medical bills and property damage for the other party if you are at fault in an accident. If this is your only coverage, you will not receive a payout for your totaled car.

Signs Your Car is Totaled

A white BMW with a dented front end. it may be totaled if there is engine damage.

If you’re in an accident, you should first call the police and your insurance company. Your insurance company will send an adjuster to inspect the damage. They will then determine if your car is totaled.

Certain types of damage almost always result in a totaled car. This includes:

  • Severe frame damage
  • Unrepairable safety issues
  • Engine or transmission damage
  • Major fluid leaks

If your car has any of this damage, it’s likely totaled. However, even if your car doesn’t have any of these signs, it could still be totaled if the cost of repairs plus the salvage value is greater than the car’s value.

Do I Still Pay a Deductible if My Car is Totaled?

If you have collision or comprehensive coverage, you will still need to pay your deductible if your car is totaled. However, if the other driver is at fault and has liability insurance, their insurance company should reimburse you for your deductible.

Keep in mind that just because your car is totaled doesn’t mean that your insurance company will automatically pay the claim. They will still need to investigate to ensure that the accident is covered under your policy. 

What Happens if I Total a Leased Car?

If you total a leased or financed car, you will still be responsible for any remaining payments on the lease. You may also be charged for early termination fees and excess mileage. 

If you have gap insurance, your insurance company will pay the difference between what you owe on the lease and what the car is worth. This can help you avoid being responsible for a large amount of money if you total a leased car.

Can I Keep My Totaled Car?

If you want to keep your totaled car, you must repurchase your vehicle from insurance and then pay for the repairs yourself. Usually, the cost of buying back your car will equal the salvage fee your insurer would have received for selling the car.

Cars declared a total loss cannot be legally driven unless they are repaired and inspected. You can then get a salvaged title from the DMV and purchase car insurance. Remember that if you keep your totaled car, it will likely be worth much less than before the accident. In addition, it may not be safe to drive and could end up costing you more money in repairs.

Purchase Collision Coverage with Alliance Insurance

If you only have liability coverage on your vehicle, you will not receive an insurance payout if your car is totaled in an accident. Most of us can’t afford to replace our car at a moment’s notice, so this could be financially devastating. Alliance Insurance of the Rockies is here to protect our Colorado neighbors from underinsuring their property. Whether it’s your home, car, or belongings, we want you to be financially protected from life’s unexpected events. If you have questions about collision coverage, contact us today for a free quote.

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