what happens when your car is totaled but still drivable

You’ve just been in a car accident. The airbags didn’t deploy, and you can still drive the car home, but the damage looks extensive. A few days later, your insurance company calls with surprising news: your car is considered a “total loss.” This situation can be confusing. How can a car that still moves be totaled? The reality is that an insurance company’s definition of “totaled” has little to do with whether the car is drivable and everything to do with repair costs versus the car’s value.

What Happens When Your Car Is Totaled But Still Drivable?

When an insurer declares your car a total loss, it means the cost to repair it to a safe, pre-accident condition exceeds a certain percentage of its actual cash value (ACV). This threshold varies by state and insurer but is often around 70-80%. For example, if your car is worth $10,000 and repairs are estimated at $8,000, it will likely be totaled. The fact that it can still be driven a short distance is often irrelevant to this financial calculation, as safety and long-term reliability are the primary concerns.

Receiving a Payout and the Salvage Title

If you accept the total loss declaration, the insurance company will pay you the car’s ACV, minus your deductible. In exchange, they take ownership of the damaged vehicle. This is a critical juncture. If you wish to keep your drivable, totaled car, you can often negotiate a “retention” or “buyback.” The insurer will deduct the car’s estimated salvage value from your payout, and you get to keep the car. However, its title will be branded as “salvage” or “non-repairable.”

The Reality of Driving a Salvage-Title Car

Driving a car with a salvage title comes with significant challenges. First, you must check your state’s laws, as some require a rigorous safety inspection before the car can be re-registered and driven legally. Secondly, insuring a salvage-title vehicle is difficult. Most major insurers will only offer liability coverage, not comprehensive or collision. Its resale value will also be drastically reduced. While keeping the car might seem like a win, it’s essential to weigh these long-term drawbacks carefully.

Navigating a total loss claim on a drivable car requires understanding the insurer’s perspective. While the immediate ability to drive might tempt you to keep the vehicle, the financial and practical implications of a salvage title are substantial. Always ask your adjuster to explain the numbers and consider your personal needs and local laws before making a final decision.