Who Gets the Insurance Check When a Car is Totaled?

When a car is declared a total loss or “totaled” after an accident, it can lead to many questions, including who receives the insurance payout. This article aims to shed light on this process.

Understanding Insurance Claims for Totaled Cars

When a car is “totaled,” it means the cost to repair the car exceeds a certain percentage of the car’s value. This percentage varies by insurance company and state law, but it’s typically around 75%.

Insurance companies determine the actual cash value (ACV) of your car, which is what it was worth just before the damage occurred. The ACV is calculated based on the car’s age, mileage, condition, and other factors.

Who Gets the Insurance Check When a Car is Totaled

Who receives the insurance payout depends on who “owns” the car at the time of the accident.

  • If the car is owned outright: If you have no loan or lease on your car, the insurance payout goes directly to you.
  • If the car is financed or leased: If you have a loan or lease on your car, the insurance company will usually pay the settlement amount directly to your lender. If the insurance payout is more than what you owe on your loan, you’ll receive the remainder. If it’s less, you’ll still be responsible for paying the balance of your loan.

What Happens After the Payout

After receiving the payout, you have a few options:

  • Buy a new car: You can use the insurance money to buy a new car.
  • Keep the totaled car: In some cases, you might decide to keep the totaled car and repair it. However, the car will then have a “salvage title,” which can affect its future resale value.


Dealing with a totaled car can be a complex process, but understanding who gets the insurance check can make the process less daunting. It’s important to communicate with your insurance company and understand your policy to ensure you’re getting the fair compensation you deserve.

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