What To Do If Your Car Is Totaled and You Only Have Liability Insurance

Getting into an accident is always stressful. But if your vehicle is totaled and you only carry liability insurance, it creates a whole extra layer of complexity. Without comprehensive or collision coverage, you may be wondering - what are my options? What happens now?

This comprehensive guide covers everything you need to know if your car is totaled but you only have liability auto insurance. We’ll explain how insurance claims work in this situation, steps to take to get compensation, your options for replacing the vehicle, and tips for avoiding problems in the future.

Whether your car was totaled by you or someone else, read on for a full overview of what to expect and do when your only coverage is liability and your vehicle is a complete loss.

What Happens When Your Car is Totaled With Liability Only

Let’s start by going over some key points on what happens when you have an insurance claim involving a totaled vehicle and only liability insurance:

• The at-fault driver’s liability coverage pays for the other vehicle’s and driver's damages - but not your own vehicle damage or injuries.
• You need to rely on the at-fault driver's liability insurance to get compensation for your totaled car, minus your deductible. Their policy limits will come into play.
• If you were at-fault, your liability insurance does NOT cover any of your own vehicle damage - only damage you caused to others.
• You have to pay out-of-pocket for the value of your totaled vehicle if you were at-fault or it was a single vehicle accident.
• Gap insurance can help cover the difference between vehicle value and remaining loan balance if the car was financed. But not the total value.
• You may be able to take legal action against the at-fault driver to recoup vehicle value beyond their policy limits.

So in summary - with only liability insurance, the options for compensation when your car is totaled depends on who was at-fault and their policy limits. Let’s look at how the claims process works in different accident scenarios.

The Insurance Claims Process When Your Car is Totaled

The specifics on how an insurance claim works when your car is totaled depends on whether you or the other driver was deemed responsible. Here are the typical processes:

You are at-fault

If you are determined to be primarily at-fault for the accident by police or insurance investigators, then:

• Your liability coverage pays for injuries/damage of other parties - but nothing for your own vehicle.
• You need to rely on your own savings or financing to replace your totaled vehicle and pay your deductible.
• Your insurer determines if your car is repairable or a total loss based on repair costs versus vehicle value.
• You can negotiate the value amount of your totaled car with your insurer or take a cash settlement if it's totaled.

Other driver is at-fault

If the other driver is deemed fully or majority at-fault:

• File a 3rd party claim with their liability insurer for damage compensation.
• Their insurer will determine if your car is a total loss and assess the pre-accident fair market value.
• You can negotiate the value with their adjuster and provide documentation to justify a higher amount.
• Their policy liability limits come into play on how much they will pay out.
• You'll be responsible for any deductible set by their insurer.

Getting what you deserve requires being proactive with negotiations, documentation and following procedures closely when someone else totals your vehicle.

Steps to Take When Your Car is Totaled With Liability Only

If your car is declared totaled and you only have liability coverage, here are important steps to take:

• Don’t sign any early agreements or settlements without exploring all options. Ask questions.
• Consult YOUR insurer to walk through the process and help with negotiations even if you were at-fault.
• Gather evidence like photos showing vehicle condition before the accident and repair estimates.
• Negotiate - don’t accept initial total loss valuations. Research fair value using KBB and similar vehicles for sale.
• File for reimbursement of rental car costs and other expenses beyond vehicle value from the at-fault driver’s insurer.
• Explore gap insurance if financed. Review loan terms regarding total loss provisions.
• Weigh repairing vs replacing your vehicle depending on damage extent. Get repair estimates.
• Consult an attorney if compensation offered seems unfair or process stalls.
• Explore legal action if their policy limits are inadequate to cover the totaled vehicle value.

Don’t assume you have to automatically accept an insurer’s initial total loss settlement offer. There may be steps you can take to receive fuller reimbursement.

What to Do About Replacing Your Totaled Vehicle

Once your car is declared a total loss, then you face the reality of needing to replace it without the help of comprehensive or collision insurance (unless the at-fault party’s policy limits are sufficient).

Here are some options for getting another vehicle when yours is totaled with liability only:

• Buy cheap replacement in cash - Use savings to buy a used car private sale. Can find good deals but no guarantees.
• Finance used car - Get loan approval through bank or credit union to finance a used car through a dealer. Higher interest rates often apply. Watch out for total loss clauses in loan.
• Lease new vehicle - Leasing may offer lower payments on newer cars. Watch mileage limits. Built-in gap coverage a pro.
• Make do sharing car - If partner or family member has a vehicle, try sharing temporarily before replacing yours.
• Use rideshare/public transportation - Services like Uber or Lyft combined with public transit can work in metro areas. Costs add up over time though.
• Consider non-vehicle options - Scooters, motorcycles, e-bikes all provide alternatives if your situation allows.

Take time to weigh your transportation needs and budget carefully before deciding how to replace a totaled car when you have liability coverage only.

Tips to Avoid Problems When Your Car is Totaled

Dealing with a totaled car is never fun, but you can avoid some headaches by:

• Carrying higher coverage limits - Collision and comprehensive can be worth it for newer or higher value vehicles. Understand exactly what is covered if going with lower premium plans.
• Having an emergency fund - Having even a few thousand dollars saved means you can more easily replace a totaled car. Harder to finance with no downpayment.
• Knowing your loan terms - Review loan total loss and gap insurance provisions so you know what to expect if still owing money when car is totaled.
• Valuing your vehicle fairly - When insuring, be realistic about your car’s worth. Don’t set value too low or that becomes the total loss payout ceiling.
• Understanding insurance fully - Ask questions and have your insurer clarify anything you don’t understand about your policy coverages and exclusions. Don’t wait until an emergency.
• Asking about umbrella policies - Extra liability coverage can provide an additional buffer in case your at-fault accident damages exceed your policy limits.

No one expects their vehicle to get totaled. But understanding the claims process, your policy coverage, and taking proactive steps can help you move forward financially when the worst happens.

FAQs

What is a total loss threshold?

If repair costs reach around 70-75% of the car's pre-accident value, insurers usually deem it a total loss rather than paying to fix it. Threshold varies by state.

Can I keep my totaled car?

You can keep a totaled car in some cases if you negotiate a cash settlement with deductions for salvage value. The totaled car must be properly transferred to a salvage title.

What if I owe more than it's worth when totaled?

Gap insurance helps pay the difference between the vehicle value and remaining loan balance. But it does not cover you for the entire value of the car upfront if you only carry liability coverage.

Should I get an attorney involved with my total loss claim?

An attorney can help maximize your compensation, especially if the at-fault insurer is disputing claim amounts or delaying settlement. Legal help typically works on contingency basis.

What is the time limit to settle a total loss claim?

Time limits vary by state but are often 1-3 years. It's best to settle ASAP while evidence is fresh. Make sure to understand and preserve your rights.

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