When your car gets totaled, it can be a confusing and stressful experience. Car insurance plays a crucial role in this situation. Knowing who gets the insurance check is essential to avoid confusion and disputes. This process can vary based on several factors, including whether you fully own the car or still owe money on it.

Understanding the basics of how insurance works when a car is totaled will help you navigate the process more smoothly. It ensures that you know what to expect and can take the right steps to settle the claim efficiently.

Understanding ‘Totaled’ Cars

A car is considered “totaled” when the cost to repair it is more than its actual value. Insurance companies use this definition to decide whether to fix the car or declare it a total loss. If repairing the car costs more than what the car is worth, it’s totaled.

For example, if your car is worth $5,000, but the repair costs are $6,000, the insurance company will likely declare it totaled. They consider the car’s value before the accident and the cost to repair it.

Determining Ownership and Lienholder Involvement

Ownership of the car affects who gets the insurance check. If you fully own the car and there’s no loan on it, the insurance check goes to you. However, if you still owe money on the car, the process is different.

A lienholder is the bank or financing company that lent you money to buy the car. They have a stake in the car until you pay off the loan. If your car is totaled and you still owe money, the insurance check usually goes to the lienholder first.

Here’s how it works: the insurance company pays the lienholder the amount you still owe on the loan. If there’s any money left after paying off the loan, you get the rest. If the insurance payment is less than what you owe, you might have to pay the difference out of pocket.

Understanding these steps ensures you know what to expect when dealing with a totaled car. It helps avoid surprises and ensures that the claim process goes as smoothly as possible.

Who Receives the Insurance Check?

When a car is totaled, the recipient of the insurance check depends largely on who owns the car.

If you fully own the car, meaning you’ve paid off any loans and there are no lienholders, the insurance check will go directly to you. This scenario is straightforward, as you have complete ownership of the vehicle. You can use the money from the insurance payout to purchase a new car or for any other needs.

However, if you still owe money on your car loan, the process involves your lienholder. The lienholder, usually a bank or financing company, has a financial interest in your car until the loan is paid off. In this case, the insurance company will first pay the lienholder the amount you owe on the loan. For instance, if your car is totaled and the insurance payout is $10,000, but you still owe $7,000 on your car loan, the insurance company will send $7,000 to the lienholder. If there’s any money left after paying off the loan, the remaining amount will be given to you. In this example, you would receive the remaining $3,000.

Lienholders have the right to be paid first from the insurance payout because they technically own a portion of the car until the loan is fully paid off. The insurance company works directly with the lienholder to settle the outstanding loan balance before disbursing any remaining funds to you. Understanding this process ensures that you are prepared for what happens next and helps avoid confusion during an already stressful time.

Steps to Take After Your Car is Totaled

A totaled car getting towed

When your car is totaled, knowing what steps to take can make the process smoother and less stressful. Here’s what you should do:

  1. Ensure Safety and Contact Emergency Services: Ensure everyone’s safety and call emergency services if needed. Move to a safe location if possible and exchange information with the other driver. Notify the police and file an accident report.
  2. Report the Accident to Your Insurance Company: Contact your insurance company as soon as possible to report the accident. Provide them with all the necessary details, including the police report if available.
  3. Document and Gather Evidence: Take photos of the accident scene, including damage to your car and any other involved vehicles. Collect witness statements and contact information if there are any witnesses.
  4. File Your Insurance Claim: File your insurance claim promptly, providing all requested information. Stay in touch with your insurance adjuster, who will assess the damage and determine if your car is totaled.
  5. Work with the Insurance Adjuster: The adjuster will inspect your car and may ask for additional information or documentation. They will provide a valuation of your car based on its pre-accident condition.
  6. Review the Settlement Offer: Review the settlement offer from your insurance company carefully. If you agree with the offer, the insurance company will proceed with the payout. If you disagree with the valuation, you can negotiate or provide additional evidence to support a higher value. This might include recent repairs, upgrades, or comparable car listings that justify a higher value.

Settling Disputes And Issues

Disputes and issues can arise during the claims process. One common dispute is disagreement over the car’s value. You and the insurance company might have different opinions on the car’s worth. Another issue can be related to lienholder payments, where there might be confusion or delays in paying off the lienholder.

To resolve these disputes, start by negotiating with the insurance company. If you believe the insurance company’s valuation of your car is too low, provide additional evidence like recent repairs, upgrades, or comparable car listings. Be prepared to explain why you think the car is worth more. If negotiation doesn’t resolve the dispute, consider seeking legal advice. A lawyer who specializes in insurance claims can provide guidance on your rights and help you pursue a fair settlement.

By understanding the potential disputes and knowing how to handle them, you can ensure a fair outcome and avoid prolonged stress. This proactive approach will help you navigate the complexities of insurance claims for totaled cars.

Tips for Dealing with Totaled Car Insurance Claims

Dealing with a totaled car can be stressful, but these tips can help ensure a smooth claims process:

  • Keep Thorough Records: From the moment of the accident, keep detailed records. Document everything—take photos of the scene, note down witness information, and keep copies of all correspondence with the insurance company. Having a complete record can prevent misunderstandings and disputes.
  • Communicate Regularly: Stay in touch with both your insurance company and your lienholder if you have one. Regular communication helps keep everyone on the same page and can speed up the claims process. Don’t hesitate to ask questions or request updates.
  • Take Precautionary Measures: Before an accident happens, make sure you have adequate insurance coverage. Review your policy regularly to ensure it meets your needs. Consider adding comprehensive and collision coverage if you don’t already have them.
  • Understand Policy Details: Know the specifics of your insurance policy. Understand what is covered and what isn’t, and be aware of any deductibles you’ll need to pay. This knowledge helps you manage your expectations and plan accordingly in the event of a total loss.

By following these tips, you can handle the claims process more efficiently and reduce the stress that often accompanies a totaled car.


Understanding who receives the insurance check when a car is totaled, the steps to take after an accident, and how to settle disputes is crucial. Knowing these details helps you navigate the process with confidence and ensures a fair outcome. Remember to keep thorough records, communicate regularly, and know your policy details. These actions will help you manage the situation more effectively.

Being proactive and informed about your insurance policies and the claims process can make a big difference. It’s all about being prepared and understanding your rights and responsibilities.

If you’re ready to take control of your car insurance and ensure you’re fully covered, fill out the form below to request a quote. Our team at Insurance Advisors of St. Louis is here to help you find the best coverage for your needs. Don’t wait until it’s too late—get a quote today and drive with confidence knowing you’re protected.