What is the status of my Auto Insurance if I settle with a third party’s insurance on a “totaled” car and get to keep it?

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jun 5, 2012

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Insurance Question from Flower Mound, TX

Asked on 06/05/2012

What is the status of my Auto Insurance if I settle with a third party’s insurance on a “totaled” car and get to keep it? My car was damaged by a large national vendor in doing work on it. The damage appears to be cosmetic to the body (i.e. no structural damage) and is quite drivable without issue. Third party is self insured, but is using a contracted insurance adjuster. Per their request, I provided estimate for repairs from a local body shop. They claim the vehicle is a "total loss", and offered an amount to settle, and I get to keep the car.Assuming we settle, and I don't repair it, should I be concerned that my Insurance will continue to cover that car, in case of future accident?

Answer given on June 16, 2012

If your car was damaged in an accident that was not your fault and the other insurance company considered it a total but allowed you to keep the car, then you may have to work something out with your insurance company.If you repair your car, then your insurance company will likely be willing to continue collision coverage. However, the value of the car is reduced since it was a total loss. If there is another accident, then you should not expect to get the average actual cash value of the car.If you do not repair the car, and your insurance company is aware of the car being totaled, they will most likely remove physical damage coverage from the car until it is repaired. If the insurance company does not know it was a total, and you are in another accident, they will probably be able to determine there is pre-existing damage and would refuse the claim.

IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and FreeAdvice.com AS IS. It has not necessarily been reviewed by the management staff of FreeAdvice.com nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although FreeAdvice.com has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on AttorneyPages.com to represent you.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption