In this article:
Being involved in a car crash is bad enough, but it's even worse if your car insurer declares your vehicle a total loss. This decision can happen if your auto insurance company determines your car is unfixable or the cost to repair it is more than it's worth. In either case, the outcome is usually the same: If you rely on your car, you'll need to find a replacement or use another form of transportation to get around.
If your car is totaled, you'll receive a check for its total value minus your deductible, which can help you buy a new car. It can take a few days to a month (or longer) to receive a check after a total loss settlement. Here's what you need to know about how the total loss settlement process works and how long it takes to get a settlement check.
How the Total Loss Settlement Process Works
Figuring out your next steps after totaling your car can be nerve-wracking, but the process is fairly straightforward. Here's how the total loss settlement process typically works.
File a Claim
Most auto insurance companies let you file a claim through their website, mobile app, by phone or in person. If another driver is at fault for totaling your car, you can file a claim with their insurance company. It's worth noting, nearly every state requires drivers to carry a minimum amount of property damage liability coverage to make sure funds are available to cover damages.
Get Your Car Inspected and Schedule a Rental Car
Once you file your claim, your car insurer will assign a claims adjuster to your case to determine how much they should pay out for your claim. The adjuster should call you to set an appointment to view the damage to your vehicle. Depending on your insurer, you may not need to be present for the inspection.
After inspecting your car, the adjuster may determine it isn't worth fixing or that it's unrepairable. States set guidelines for insurance companies on total loss thresholds, which can range from 60% to 100% of a car's actual cash value depending on the state. For example, many insurance companies determine a car is a total loss if its repair costs are more than 75% of its market value. In that case, if your car is worth $20,000 at the time of the accident, repairs over $15,000 (75% of its value) would likely not be authorized.
If your insurance policy includes rental car reimbursement coverage, use it now to rent a vehicle until your claim is settled or your car is repaired. If you don't have rental car coverage, you might need to borrow a car from a friend or loved one or use a rideshare service to get around.
Review the Settlement Offer
If your auto insurer decides your car isn't worth repairing, they'll give you a settlement offer. The adjuster will contact you to review the offer, and you can either accept it or challenge it if you feel it's too low.
If your car is financed, your insurer will likely write a check to you and your lender. You'll use the check to pay off the car loan, and you can keep any leftover funds. However, if the insurance check is less than the outstanding loan balance, you'll be on the hook for paying the difference.
Transfer the Title and Sign the Documents
Before finalizing the settlement, you'll need your car title to prove your ownership. It's also a good idea to remove all your personal belongings from your car and let your insurer know when it's ready to be picked up for salvage.
Your insurer should let you know when the final paperwork is ready for your signature. You can usually sign the settlement documents in person, electronically or through the mail. Once you've put pen to paper, you should receive a digital payment or standard check within one business day.
How Long Does It Take to Get a Settlement Check?
Every claim is unique, so the time to receive a settlement check can depend on the specifics of your claim. On top of that, statutes of limitations vary from state to state, which can also impact your settlement timeline. These laws outline how long you have to file a claim and how long your insurance company has to evaluate it.
For example, in California, insurers must accept or deny a claim within 40 days of receiving notice of a claim, and delays can extend the process. In Texas, insurance companies generally have 35 days to resolve a claim, though they can request an additional 10 days if necessary. Regardless of where you file your claim, do so quickly to avoid unnecessary delays.
Assuming the claim is cut-and-dried and there are no outstanding legal or other issues, the process should move along quickly. One insurer estimates the timeline to receive a check after filing a claim is around a week and a half.
- After filing a claim, you'll typically schedule a damage inspection within a day.
- An adjuster will review your case, and you'll finalize the settlement amount within about three business days.
- Once the paperwork is signed, you can expect to receive your payment—either digitally or by check—within one additional business day.
It might take longer than 30 days to get a check if the accident caused significant damage or your insurer needs more time to review your policy coverages.
How to Avoid Delays in Receiving a Settlement Check
Delays in claims are often caused by investigations into the accident or your coverage. You might avoid unnecessary delays and receive your settlement check sooner by helping your insurer in the following ways:
- Provide the necessary documents. Streamline the process by gathering up any accident notes, police report, photos, witness accounts and insurance information to make it easier for your adjuster to verify your case details.
- Respond promptly to your insurance adjuster's requests. Be on the lookout for calls or messages from your adjuster requesting more information and respond to quickly to keep the process running smoothly.
- Be proactive. If your claim seems to be at a standstill, check your account online or call for a status update. Remember, your state may require your insurer to provide an explanation for any delays—check with your state's insurance department to confirm.
Bear in mind, most states require insurers to give you status updates on your claim and provide a written explanation for any claim delays longer than 30 days.
Review Your Car Insurance Policy Regularly
When your car is totaled, the total loss settlement process requires your insurer to assess the damage, determine your car's actual value, make a settlement offer and finalize your claim.
Depending on your insurer and whether there are any delays, you could receive a check within a few days—if it's a straightforward case—or much longer if the accident is severe or the claim requires additional review.
Once your claim is settled, it's a good time to evaluate your current car insurance policy. As a general rule, you should always review your coverage before renewing it to make sure it still meets your needs. You may be able to find better coverage at a lower rate with a different insurer. If you decide to shop for other insurance providers, Experian's car insurance comparison tool can help you find the most affordable policy by allowing you to compare quotes from top insurers in one place.