A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 14, 2021

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Important facts to know...

  • Car insurance companies cannot randomly take cars from policyholders
  • In order for a car insurance company to take a car, it must be declared a total loss
  • You may be able to buy back your totaled car
  • A car insurance comparison tool can help you find a new insurance policy for a car with a branded title

If you are new to car insurance, have been late on a few payments, or have recently been in a car accident, you may be wondering if your car insurance company has any legal authority to take your car from you.

Your car insurance company cannot simply remove your car from your possession.

In fact, the only time your car insurance company will remove your car from your possession is after you’ve been in a car accident that resulted in your car being totaled, and at that point, your car insurance company will pay you for your loss.

If you recently bought back your totaled car and are having trouble finding a new insurance policy, a comparison tool can help you locate car insurance companies that offer insurance policies for totaled vehicles.

Simply enter your ZIP code above to use our comparison tool today!

How Car Insurance Works

Your car insurance company is not a financial institution. They don’t necessarily have a vested financial interest in your car. Instead, they are providing you with a service for a specific fee.

When you pay your car insurance, you are paying for X amount of coverage in case your car is damaged via an accident or unforeseen circumstance that is specifically covered by your insurance policy.

When you get into an accident, you file a claim with your car insurance company to see if they will cover all or some of the damage to your vehicle. If they approve the claim, they will help you pay for the repairs to your vehicle up to its value just prior to the accident or your policy limits.

If your car cannot be repaired for less than the value of your car, your insurance company will declare it a total loss, which means it cannot be repaired for less than it is worth.

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Total Loss

A total loss occurs when your car cannot be repaired for less than it is worth at the time of the accident.

For example, if your car is worth $5,000 and the damage to your vehicle is $6,000, your car insurance company will declare your car a total loss and pay you the $5,000 minus your deductible and any applicable fees and remove the car from your possession.

Insurance Companies and Totaled Cars

Once the insurance company has legal possession of your vehicle, they can do with it as they please, which often means selling it on a secondary market or to a scrap yard. The exact process for disposing of totaled cars depends on the insurer and the extent of the damage to the vehicle.

If you are worried about how your insurance company handles total loss claims and if you can buy your car back after a total loss, you may want to consider switching to a car insurance company that offers better customer service and better transparency regarding their policies and procedures.

State Insurance Regulations and Totaled Cars

Each state has its own rules and regulations when it comes to totaled vehicles. An example would be the Illinois Department of Insurance, which lists certain recourse rights when it comes to total loss claims. When you are involved in a total loss car accident in Illinois, there are only two conditions where it is legally allowable to keep your vehicle.

The first instance involves hail damage. If your car is solely damaged by hail and declared a total loss, you may have the ability to keep it, providing the car is still safe to drive.

The second example involves vehicles that are more than nine years old at the time of the accident. If your car meets this criterion, you may be able to negotiate with your car insurance company to buy back your older totaled car.

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Buying Back Your Totaled Car

If your insurance company agrees, they will still pay you some money for your accident, but it won’t be as much as if you had let them declare the car a total loss.

Insurance companies often deduct their fees, any applicable deductibles, and the estimated amount they would have gotten had they sold your car to a junkyard or another secondary market.

After your insurance company has deducted all the applicable fees, they will send you a check for the rest of the amount. You can then use that amount to repair your totaled car or pocket the cash. If you choose to buy your car back, you may need to find a different insurance company.

Getting Car Insurance for a Totaled Car

If you opt to buy back your totaled car, understand that the title will be branded. Different states have different designations, but in general, your car’s title will say flood, reconstructed, or totaled, and none of these designations bode well for you or your car if you decide to trade it in or sell it at a later date.

It may even make insuring the car more difficult since it’s already been totaled.

If you need car insurance for a totaled car, you can search for a policy with help from an auto insurance comparison tool, as aforementioned.

These tools take all of your car’s information and your personal information and compare them against the available policies in your local state, which will allow you to find an affordable policy for your totaled or salvaged vehicle.

Compare car insurance quotes NOW from the convenience of your own home!