My car is totaled. Will the Insurance Buy Me a New One?

Car total loss insurance totaled money

My Car is Totaled. Will the insurance company buy me a new one?

Not exactly.

When your vehicle is deemed a total loss, it goes through a complex analysis that is governed by the insurance policy itself. Generally, the document gives the insurer the right to determine whether the loss is a total loss. It usually hinges roughly on whether the costs of repair exceed the value of the vehicle. Usually, if the costs are as much as 75% of the value of the vehicle, it is deemed a total loss, although less reputable insurers will play games on valuation and reparability. Read your policy!

So they just write me a check and I go buy a new car, right?

Not even close.

First of all, if you owe more than the value of the vehicle and you did not take out GAP insurance, you could be left paying off a loan on a car that goes to the scrap heap. If you finance a vehicle, always purchase GAP insurance (which pays off the loan) or “agreed upon value” coverage, which will at least provide a higher pay off in value than typically deemed fair market value.

Second, all you are entitled to in Illinois is Fair Market Value less depreciation plus any scrap value. Your 2012 Honda Civic that you purchased for $25,000 may only be worth $9,000 in 2017. If you receive a check for $8,000 (assume scrap value is $1,000), you aren’t going to be able to buy a 2017 Civic.

Further, if your vehicle is deemed a total loss, it’s the money or the title, not both. You must give up the title to your vehicle in order to receive the total loss money.

Does it Matter if it is My Insurance or the Other Person’s?

Mostly no, but it depends on the quality of the insurer. If you have a mainline company, say State Farm, but the other driver who caused the damage has Illinois Founders, it is probably not worth the hassle to fight with them to either repair your vehicle or declare it a total loss. You are better off paying your deductible, letting your carrier repair or replace your car, and having them subrogate and go after the other driver’s insurer. If this is successful, your deductible will be returned to you.

What about Diminished Value?

I get this question often. Honestly, it can be very difficult to prove without costly experts to opine on what your vehicle was worth before versus what it is worth now after the damage sustained. This is usually a headache not worth pursuing. If you purchase a vehicle worth anything significant, do yourself a favor and make sure you have GAP or agreed upon value insurance coverage. Otherwise, that newly purchased vehicle will be nearly worthless if you are involved in a crash.

But I am Also Injured. Can I bring a Claim for Personal Injuries Too?


One mistake many people make is to assume that they were not hurt badly and think of their claim as “only” property damage. Often they will settle the entire case only to realize later their back, neck, or shoulder hurt. Too late.

If you think you might be hurt, get checked out immediately, do not talk to anyone, make a police report, and contact a lawyer as soon as possible. Otherwise, you could leave lots of money on the table and yourself with no recourse.

My Car is a Piece of Junk. Why Should I Pay for “Good Insurance?”

It is not about what your car is worth so much as it is about what damage you can do with that car.

All it takes is one moment of inattention and you can seriously injure, or even kill, a pedestrian or other driver or occupant. Cheap insurance with low limits for liability (the Illinois minimum is currently $25,000 per person per crash and $50,000 total per crash), could put at risk your home, assets, and peace of mind.

Always carry high limits for all coverages if you plan to drive.


  • Total loss equals Fair Market Value (FMV) less depreciation plus any scrap value
  • Total loss means you give up the title
  • If you finance a vehicle, carry GAP or Agreed Upon Value coverage.
  • Keep your insurance limits as high as possible
  • If you are injured, get checked by a doctor immediately, give no statements, and seek the help of a personal injury lawyer

Contact Chicago Personal Injury Lawyer Stephen Hoffman

If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He has been named a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited.

Stephen handles personal injury and workers' compensation claims on a contingency fee basis, which means you don’t pay anything upfront and he only gets paid if you do. Don’t wait another day, contact Stephen now.

Categories: General