Who Gets The Insurance Check When A Car Is Totaled? (2024)

What Is a Total Loss?

An insurance company declares a vehicle a total loss after an accident when an insurance adjuster determines repairing the vehicle would cost more than its actual cash value (ACV). Your insurer considers the ACV for your car to be how much it was worth on the market right before the accident.

That market value before the accident is based on your car’s age, depreciation, mileage, condition, make and model and local market.

The Coverage Needed to Receive an Insurance Check

One of the most important considerations in who gets the insurance check when a car is totaled is whether you have the proper auto insurance coverage to make a claim. Here are the coverages that can lead to an insurance company issuing a check:

Collision Insurance

Collision insurance can pay to repair or replace your vehicle if you damage it when you hit another vehicle or a fence, pole or house. It doesn’t matter who is at fault with collision insurance. You report the damage to your insurer, and your insurance company may issue a check, minus your deductible.

Comprehensive Insurance

Your comprehensive insurance can cover the damage to your car from things other than a collision, such as the weather, a tree falling and breaking your windshield, an animal, theft or vandalism. An insurance company can pay to repair the damage in these cases, minus your deductible.

Gap Insurance

Gap insurance can play an important role if your car is declared a total loss by the insurance company and you owe more to your auto lender or leaseholder than the car’s ACV.

You may be responsible for the difference between what you owe and the amount paid by your insurer. Gap insurance can help cover the difference, keeping it from coming out of your pocket.

Property Damage Liability

If you’re in an accident and at fault, your insurance company may pay to repair or replace the vehicle of the driver you hit. If your car is damaged in an accident caused by another driver, that driver’s insurance company may pay to repair or replace your vehicle.

Uninsured Motorist/Underinsured Motorist Insurance

If a driver is at fault for damaging your vehicle in an accident and doesn’t have insurance or sufficient coverage, uninsured motorist or underinsured motorist insurance can help pay for repairs to your vehicle.

Who Gets the Insurance Check When a Car Is Totaled?

When an insurance company declares your car a total loss, who the check goes to also depends on whether you own your car outright, finance it or lease it.

You Own Outright

If you own your car outright, the insurance company can issue a check directly to you as the car’s owner after a total loss. You can decide how you want to spend the money, whether you want to buy another car or something else.

You Finance

Your auto lender gets paid first when your car is totaled by your insurance company. A check may be issued directly to your lender or made out to you and your lender as signatories. If the ACV is more than what you owe, your lender may forward a check to you for what remains after paying off your car loan.

You Lease

Your insurance company may send a check directly to your leasing company if the vehicle is declared a total loss. The leasing company can then use the money to pay off the remainder of your lease.

If you’re not satisfied with the insurance company’s settlement offer because you need more money to replace your car or want more of the loan paid, you can try negotiating with your insurer. However, you must provide plenty of documentation, and it might help you to hire a professional appraiser to evaluate your car.

Discuss Your Insurance Needs With ConsumerShield Today

Auto insurance can help safeguard you from losses if you’re in a car accident. Having the right car insurance coverage is key in determining whether you might receive a check after totaling your car in a crash.

At ConsumerShield, we share our knowledge about insurance to help you make informed decisions as a consumer. Get in touch today to learn more about finding the right auto insurance for you and your vehicle.