Will my insurance rates go up if my car is totaled?

Editorial team Published on

Your car insurance rates will likely go up if you are at fault for the accident that totaled your vehicle, but they may not increase if the loss was out of your control.

✅ At-Fault Accidents

  • Rate Increase: Almost always raises your premium.
  • Average Jump: Expect a 20% to 50% or higher increase.
  • Duration: The surcharge stays on your record for 3 to 5 years.

📉 Not-At-Fault Claims

  • Weather/Theft: Comprehensive claims (floods, fire, deer hits, theft) rarely raise rates significantly.
  • Other Driver at Fault: Rates usually stay flat or see minimal bumps, depending on state rules.
  • Multiple Claims: Filing several claims in a short window triggers risk penalties.

💡 How to Mitigate Increases

  • Accident Forgiveness: Shields your first major claim if pre-qualified.
  • Shop Around: Compare competitor rates if your current insurer hikes prices.
  • Raise Deductibles: Offset premium jumps by adjusting comprehensive/collision deductibles.

How much will my insurance go up if I totaled my car?

An at-fault total loss accident typically raises your car insurance premium by an average of 40% to 50%, remaining on your record for 3 to 5 years.

📊 Average Rate Increases

  • At-fault accident: Increases rates by roughly 45% on average.
  • Not-at-fault accident: Usually results in a 0% increase, depending on state rules.
  • Duration: Surcharges typically last for 3 to 5 years.

💡 Factors Affecting Your Increase

  • Fault: Being responsible for the crash triggers the highest surcharges.
  • Driving History: Prior tickets or claims worsen the rate jump.
  • State Laws: Some states restrict insurers from raising rates for minor claims.
  • Accident Forgiveness: Many providers waive the first surcharge if you have a clean record.

🔎 Financial Impact Breakdown

  • Actual Cash Value (ACV): Payout equals the car's pre-accident value minus your deductible.
  • Loan Payoff: Remaining auto loan balances must be cleared from the payout first.
  • Replacement Cost: Higher future premiums apply when buying a replacement vehicle.

Should I still pay my insurance if my car is totaled?

Yes, you must continue paying your auto insurance bill until the total loss claim is completely settled and your policy is officially canceled or transferred.

Why You Still Pay Your Insurance

  • Active Coverage: Your policy remains active during the claims adjustment process. If anything happens to the vehicle or if you drive a rental car in the interim, you still need protection.
  • Settlement Timing: The claims process takes weeks. Your obligation to pay ends only when the claim is finalized and the insurer cancels or closes the policy.
  • Refunds for Overpayment: If you pay your premium in advance (such as a 6-month or annual lump sum) and the policy is canceled mid-term, the insurance company will send you a prorated refund for the unused days.

What Happens to Car Loans and Payouts

  • Loan Obligations: If you finance or lease the car, you must also keep making your monthly auto loan payments until the lender confirms the balance is fully paid off.
  • Actual Cash Value (ACV): The insurance payout goes first to your lienholder (lender) to cover the car's market value minus your deductible.
  • GAP Insurance: If you owe more on the loan than the car is worth, standard insurance only covers the ACV. You are responsible for the remaining loan balance unless you have GAP insurance.

Can I take the tires off my totalled car?

You cannot remove the tires from a totaled car unless you have explicit, written permission from your insurance company.

Why You Can't Just Take Them

  • Ownership transfer: Once your insurance company declares the car a total loss and issues a payout, they own the vehicle. Taking parts after that point is considered theft.
  • Valuation impact: The value of the car (its Actual Cash Value) includes the tires currently on it. Removing them lowers the car's value. If you take them without telling the insurer, they can reduce your payout or view it as insurance fraud.

Alternatives and Solutions

  • Ask for a swap: If the car is still at a tow yard or your house and you haven't finalized the settlement, ask your adjuster if you can swap the new tires out. You must put another set of rolling tires and wheels on the car so it can still move and be towed.
  • Submit receipts: If you bought brand-new tires right before the crash, send the purchase receipts to your adjuster. They may increase the settlement offer to account for the added value, though you likely won't get back 100% of what you paid.

How long does a totaled car stay on your insurance record?

A totaled car claim generally stays on your insurance and claims history record for three to five years for rating and premium purposes.

Duration on Insurance Records

  • Standard impact: Most auto insurers look back 3 to 5 years when calculating your rates after an accident or total loss.
  • Severe incidents: Major crashes involving injuries, large payouts, or driving under the influence (DUI) can remain visible and impact your premiums for 7 to 10 years.
  • Claims databases: Nationwide tracking systems like the Comprehensive Loss Underwriting Exchange (CLUE) report can retain records of the claim for up to 7 years, even if a new insurance company does not use the older part of that window to raise your rates.
  • The countdown clock: The time period starts on the date of the accident, not when the total loss check is finally paid out or the paperwork is closed.

Factors That Change How Long It Matters

  • Fault: If you were not at fault for the crash, the total loss record may stay on your history, but many states restrict insurers from raising your rates for it.
  • State rules: State laws dictate how long an insurer is legally allowed to apply a surcharge to your bill.
  • Insurer rules: Each company has its own schedule for dropping surcharges, often easing rates gradually over three claim-free years rather than all at once.

If you need help navigating a claim, you can learn more about managing Total Loss Auto Claims through official state resources.

What Happens When the Insurance Company Totals Your Car?

9 related questions found

Should I accept the first offer for my totaled car?

No, you should generally not accept the first insurance offer for your totaled car, as it is usually an opening low bid rather than a final valuation.

Why You Should Wait

  • For-profit motives: Insurance companies want to protect their bottom line by paying out as little as possible.
  • Automated software flaws: Insurers use valuation software that frequently misses recent upgrades, precise vehicle condition, or accurate local market data.
  • Your right to negotiate: You are legally entitled to reject the initial figure and present a counteroffer without closing your claim.

How to Counter the Offer

  • Request the valuation report: Ask the adjuster for the detailed market report and check the comparable vehicles ("comps") they used.
  • Gather your own evidence: Find local listings for identical makes, models, years, and mileages.
  • Provide records: Submit proof of recent maintenance, new tires, or aftermarket upgrades along with pre-accident photos.
  • Check local fees: Ensure the payout includes appropriate local sales taxes and registration fees.

Most users on Quora agree that you should do independent market research before accepting any settlement. You can learn more about the How to Negotiate with Car Insurance Adjusters process to prepare your case.

What not to tell your insurance company?

Never admit fault, apologize, or downplay your injuries when speaking to an insurance adjuster after an accident.

Statements to Avoid

  • "I'm sorry" or "It was my fault": Insurers treat apologies as a legal admission of liability, which can reduce or eliminate your compensation.
  • "I'm fine" or "I'm not hurt": Adrenaline can mask severe conditions like internal bleeding or traumatic brain injuries that appear days later. Early statements that you are fine are used to deny later claims.
  • Guesses or speculation: Never estimate speeds, distances, or timing. Stick strictly to objective facts you know for certain.
  • Recorded statements: You can decline requests for a recorded interview until you consult legal counsel, as adjusters use these recordings to trap you in inconsistencies.

Safe Communication Guidelines

  • Provide only basic facts like the date, time, location, and your contact or policy details.
  • Refer the adjuster to a qualified Car Accident Lawyer to manage further discussions and protect your rights.

Does totaling your car hurt your credit?

No, totaling your car does not directly hurt your credit score. Car accidents and vehicle damage are not reported to credit bureaus, so the physical condition of your car has no impact on your credit history.

However, how you handle the financial aftermath can impact your score. Here is how a totaled car can indirectly affect your credit:

When it can hurt your credit

  • Unpaid Loan Balances: If your insurance payout is less than what you owe on your car loan (known as being "underwater"), you are legally responsible for paying the difference to your lender. If you miss payments on this remaining balance, your lender will report the delinquency, which will severely damage your credit.
  • Late Payments During the Claim Process: You must continue making your regular monthly car payments while waiting for the insurance company to settle the claim. Missing a payment during this time will hurt your credit score.

When your credit is protected

  • Guaranteed Asset Protection (GAP) Insurance: If you have GAP insurance, it will cover the difference between the insurance payout and your remaining loan balance, protecting you from out-of-pocket debt.
  • Timely Loan Payoffs: If your insurance payout fully covers the loan, or if you immediately pay off the remaining balance yourself, your account will be closed in good standing.

Moving Forward

If you need to replace the vehicle, applying for a new auto loan will trigger a hard credit inquiry, which may cause a temporary, minor drop of a few points in your credit score.

Is it better to have a car totaled or repaired?

It is generally better to have a car totaled than deeply repaired, because heavily damaged cars often face lingering mechanical issues, hidden structural problems, and a permanent drop in resale value.

When a Total Loss is Better

  • Clean break: You receive a payout for the car's actual cash value, letting you buy a reliable replacement without dealing with ongoing repair delays or hidden frame damage.
  • No lingering headaches: Once a car is severely damaged, fixing it can lead to repeated trips to the body shop for unresolved electrical or mechanical glitches.
  • Financial safety: If repair costs approach or exceed your state's total loss threshold (often 70% to 85% of the vehicle's value), a payout prevents you from driving an unsafe or compromised vehicle. Refer to the Totaled Car Guide for details on how insurers calculate these values.

When Repairing is Better

  • Minor damage: If the damage is purely cosmetic or the repair cost is very low compared to the car's high market value, fixing it makes financial sense.
  • Reliable history: If you know the car's history and the damage is strictly bolt-on exterior parts (like a bumper or fender) without structural compromise, a repair keeps a good car on the road.

How soon can I get a new car after a total loss?

You can technically buy a new car the same day the accident happens if you pay cash or use an official Total Loss Letter from your insurer to show a lender.

Typical Timeline

  • Immediate (Day 1): Possible if you buy with cash or secure independent financing using a total loss declaration letter.
  • Standard (2 to 4 weeks): Most people wait this long to receive the final insurance payout check, which clears the old loan balance and provides a down payment.

Factors to Consider

  • Loan Payoff: If you owe money on the totaled car, the insurance payout goes to your lender first. If you have negative equity and no gap insurance, you may owe a remaining balance that complicates a new loan.
  • Rental Car Limits: Insurance companies usually stop paying for your rental car [3 to 7 days] after they make a settlement offer, not when you buy a new car.
  • Financing Approval: As discussed by a consensus on Facebook, lenders prefer seeing proof that the previous loan is settled or covered by the total loss payout before approving a second major auto loan.