“Totaled” means your insurer has declared your car a total financial loss. When you have an accident and file a claim, your insurer looks at how much it would cost to repair your car and compare that to what your car was worth right before your crash, according to the Insurance Information Institute. If repairs plus your damaged car’s salvage value (the amount it’s worth for parts or scrap) meet or exceed a certain percentage, set either by state law or by individual insurers, the car can be totaled. That percentage, called the total-loss threshold, commonly falls somewhere between 50% and 100% of a vehicle’s actual cash value (ACV), depending on where you live.

Example:

This car would be totaled, because the repair costs plus salvage value ($7,500) are more than 70% of the car’s actual cash value ($7,000).

It can be hard to tell how roadworthy a damaged car is and how much it will cost to repair simply by looking at it. Cosmetic damage like a cracked bumper or dented door may look bad but cost relatively little to fix, while structural or electrical system damage can be expensive to repair — even when the car still drives normally.

In all 50 states, if your insurer declares a car a total loss, it gets a salvage title and is illegal to drive. A salvage-titled vehicle can’t be legally driven and won’t qualify for insurance until it’s been repaired, passes a state safety inspection and is re-registered under a rebuilt title.

That’s true even for a totaled car that drives well, because it can have damage that isn’t obvious — a bent frame, damaged airbags that might not deploy or damaged safety sensors. That’s why states require inspection before issuing a rebuilt title. You can verify any vehicle’s history on the National Motor Vehicle Title Information System (NMVTIS), a federal database that tracks salvage and junk titles.

Insurers will not cover a car with a salvage title and often limit coverage on a car with a rebuilt title. According to Consumer Reports, you may be able to get liability coverage on a car with a rebuilt title but not comprehensive — the coverage that would help pay costs if your car is damaged or stolen.

Driving the car before it’s properly retitled and re-insured risks fines. Driving without valid insurance also can leave you vulnerable if you’re in another accident. Find out more about what to do after an accident.

A total-loss declaration comes with a settlement offer. That’s the amount your insurer is offering to pay to settle your claim. You have decisions to make:

You can accept the offer. You sign over your car’s title to your insurer and accept the settlement offer. Payout timelines vary by insurer and state. A straightforward total-loss claim with no injuries or fault disputes often takes a few weeks from filing to payout. It can take longer if there’s a dispute over fault or the vehicle’s value. A Farmers^® agent can help you find the right car insurance for your next car.

If you’re still financing or leasing the car, the settlement goes toward paying your loan or lease first and you get any amount left over. If you owe more than the settlement covers, gap insurance can help pay the difference. This is an optional coverage you can add when you buy your policy, according to the Consumer Finance Protection Bureau.

You can keep the car, but the settlement (your payout) will be reduced by the amount of the car’s salvage value, and you’ll need to deal with a car that has a salvage title. That means having repairs made, getting your state to issue a rebuilt title and finding insurance — which can take weeks to months, depending on repairs needed and your state’s DMV backlog.

If you think the amount your insurer says your car was worth is too low, you generally have the right to challenge it before accepting a settlement, according to the Insurance Information Institute. Ask for the valuation report to see how the number was calculated, and gather maintenance records, upgrade receipts or comparable local listings to support a higher figure.

From there, you can ask your insurer to reconsider, request a second appraisal if your policy includes an appraisal clause or file a complaint with your state’s department of insurance. Appraisal rights vary by policy; your agent can confirm what yours allows.

If anyone was hurt in the accident that totaled your car — you, your passenger or someone in another car — your property damage claim (covering the vehicle) and any bodily injury claim are generally handled separately. Your car being totaled doesn’t, by itself, determine how an injury claim is valued.