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Who Gets the Insurance Check When a Car is Totaled

Who Gets the Insurance Check When a Car is Totaled?

If you’re reading this, you’re wondering who gets the insurance check when a car is totaled.

You may expect the insurance payout to come directly to you as the vehicle owner, but that’s not always the case.

If you still owe money on your car loan or lease when it’s totaled, the insurer will first pay the lender or lease company before paying you anything, if there’s any money left over.

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Who Gets the Insurance Check When a Car is Totaled?

Who gets the check depends mainly on if you have an outstanding loan or lease on the car:

If You Own Your Car

  • The insurance check is paid directly to you if no liens exist
  • Use the funds to replace your totaled vehicle as desired

If There’s a Loan

SituationPayment Process
Loan balance is less than insurance settlement– Insurer pays lender first – Any leftover amount is sent to vehicle owner
Settlement is less than loan balance– Insurer pays lender – You pay the lender the deficit unless gap insured

If You Have a Leased Car

  • Insurance pays lease company directly as owner
  • You continue lease payments as agreed
  • Gap insurance helps cover extra balances

Gap insurance is valuable protection that pays the difference if you owe more on your loan or lease than your settlement amount.

What Happens When a Car is Deemed a Total Loss

An auto insurance company declares a car totaled or a “total loss” when the estimated repair cost exceeds approximately 70% to 100% of the car’s pre-crash value. This threshold varies by state.

They determine the pre-crash actual cash value (ACV) of your car by comparing it to similar models in your area. The car’s age, condition, mileage and installed equipment are factored in.

Once totaled, the insurer pays the ACV minus your deductible (if you were at-fault or uninsured) to replace your totaled car.

Disputing a Low Settlement Offer

If you think your car was worth more than the insurer’s settlement offer, take these steps:

  • Get records to show value – maintenance, upgrades, unique features
  • Research car prices – Checking sites like KBB and NADA can help justify higher values
  • Negotiate firmly but politely with reasonable justifications
  • Get professional help – Appraisers and attorneys may be needed

Other Key Factors in Insurance Payouts

Premiums and claimsRates may rise after claims; shopping around helps savings
DeductiblesApply unless another insured driver was fully at-fault
State lawsRegulations affect settlements, total loss thresholds
Policy specificsCoverage limits, loss payees direct payments
Accident faultRules payout sources between insurers
Uninsured driversSpecial coverage may protect from losses
Loaning/leasing gapsExtra insurance like gap is important

Ready to Shop Insurance Plans?

Whether you just totaled your car or want to save money on premiums, SoFi’s free online quote tool makes finding the right auto insurance smooth and simple. Just enter your ZIP code to start comparing top insurers instantly.

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Picture of Steve Momot - Author

Steve Momot - Author

Steve, a seasoned expert in the automotive industry, formerly held a car dealer license in Florida. With extensive experience spanning across car trading and mechanical work, he founded Autohitch. His mission? To guide both buyers and sellers through the intricate maze of car purchasing, ensuring a seamless and informed experience. Outside of the automotive world, Steve has a passion for fishing and capturing the beauty of nature through photography.


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