What If I Have a Total Loss?

If your vehicle is declared a total loss, use this information to help understand the process and the meaning of some of the terms commonly used when referring to total loss vehicles.

Important Things to Know About Total Loss Vehicles

What does “total loss” mean?

Total loss is a term used when the cost of repairing a vehicle exceeds a certain percentage of the vehicle’s actual cash value.

How is my “actual cash value” calculated?

Determining your vehicle’s actual cash value requires two steps. First, we consider several factors such as year, make, model, options, mileage and condition. Then, we compare your car to similar vehicles in the market and adjust its value up or down according to differences. We follow your state’s guidelines throughout the evaluation process and use an independent source.

What is the next step?

Once we inspect your vehicle, a claims representative will contact you within 48 hours to discuss the vehicle evaluation and total loss process with you. If you don’t plan to keep the vehicle, this is when you must agree to move it to a storage-free location. You’ll also need to find your title and all keys.

Your claims representative will provide any paperwork required by Farmers® or your state to conclude the settlement. When your vehicle has been deemed a total loss, you should also contact your local agent to discuss continuing coverage.

What if I am still making payments on my vehicle?

It’s a good idea to advise your financial institution that your vehicle has been declared a total loss and that your insurance company will make contact to obtain information about the loan. Your financial institution has the right of first payment before any payment is made to you. Remember that you may owe more than your vehicle’s actual cash value. And please be sure to remain current on regularly scheduled payments until the loan’s balance is cleared. 

Can I keep my car?

Depending on state-specific statutes, you may be able to keep your vehicle in a process known as “owner retained salvage.” If you choose this option, we adjust your vehicle’s actual cash value by its salvage price to determine a settlement amount. You may have to report your vehicle to your Department of Motor Vehicles (DMV) as salvaged, and in some cases, certain body shops will not repair a vehicle that has been declared a total loss. Keep in mind that you may not be able to carry first-party collision coverage on the vehicle. It’s a good idea to consult with your Farmers agent  about these auto coverage issues.

If you have any other questions, contact your Claim Representative.

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