What If the Insurance Company Declares Your Car a Total Loss in Tempe?

You’ve just been in a serious crash in Tempe. The damage to your vehicle looks bad—but you’re hoping the shop can fix it. Then the insurance adjuster calls: your car is being declared a total loss. Now what?

If this happens, the way your case is handled from that point on can dramatically affect not only your transportation options but also your financial future. At Tempe Car Accident Attorney, we help crash victims understand their rights when a car is totaled and fight for the full fair value—not the lowball figure the insurer wants to push.

What Does "Total Loss" Actually Mean?

When an insurance company declares your car a total loss, they’re saying it would cost more to repair the vehicle than it’s worth. In Arizona, the threshold for declaring a vehicle totaled varies depending on the insurer, but many use the 70–75% rule—meaning if repair costs exceed 70–75% of the car’s actual cash value (ACV), it's considered a total loss.

This decision can come quickly after a crash in high-impact collisions like rollovers, T-bone wrecks, or head-on collisions caused by DUIs, especially if airbags deploy or the frame is compromised.

Who Determines the Value of Your Vehicle?

The insurance company will calculate the actual cash value of your vehicle based on factors like mileage, condition, service history, and comparable sales in your area. However, they often use third-party databases that undervalue vehicles. This is where many Tempe drivers get shortchanged.

If your car was well-maintained or had upgrades—like a new engine, tires, or stereo system—make sure you document everything. We’ve helped drivers in Holdeman and Meyer Park fight back against valuations that ignored major recent improvements.

What If You Still Owe Money on the Vehicle?

If your car is financed and the insurance company declares it totaled, the payout will go to your lender first. If the car’s value is less than your loan balance, you’re responsible for the difference—unless you have gap insurance.

This is a common issue for Tempe drivers with newer vehicles. We've seen clients after crashes near North Tempe stuck owing thousands, even though the wreck wasn’t their fault. Filing a personal injury claim in addition to the property damage claim may help recover that gap.

What If the Insurer’s Offer Is Too Low?

You don’t have to accept the first offer. In fact, you shouldn't—especially if the insurer uses a low-ball valuation or ignores your vehicle’s condition and recent work. You can challenge their number with your own research, documentation, and market comparisons.

In one case involving a pedestrian victim in Escalante, the insurer valued the client’s SUV at $5,200. After we submitted evidence of recent repairs and comparables from Tempe-area listings, the offer increased to $8,600.

Do You Still Get a Rental Car After a Total Loss?

Yes—but only for a limited time. Most insurance companies will cover a rental car until they make a settlement offer on the totaled vehicle. That could mean only a few days after the loss is declared. Once the offer is issued—even if you haven’t received funds—you’re often on your own.

This leaves many drivers in a tough spot, especially if you can’t immediately afford a new car. If your crash occurred in a rideshare accident or was caused by an uninsured driver, that delay may stretch on even longer.

We go further into rental issues here, but in short: the sooner you challenge a low offer or get legal help, the less time you’re stuck without transportation.

What If You Want to Keep the Car?

In some cases, you may want to keep your totaled vehicle—especially if you believe it’s still drivable or can be repaired independently. This is called owner retention. The insurer will subtract the salvage value from your payout, and you’ll typically receive a “salvage title” from the DMV.

While this is legal, it can impact resale value, future insurance, and your ability to register the vehicle. Think carefully, especially if your crash involved structural damage or complex repairs, like after a TBI-causing wreck or paralysis injury crash.

How Total Loss Affects Your Injury Claim

Declaring your vehicle a total loss doesn’t affect your eligibility to pursue compensation for medical bills, lost wages, or pain and suffering. In fact, the more serious the property damage, the more credible your injury claim may appear to insurance adjusters and juries.

If you were hit in a distracted driving accident or suffered injuries in South Tempe, that total loss report can serve as evidence of how severe the crash was—even if your injuries were initially considered “soft tissue.”

What If the Crash Was Partially Your Fault?

Arizona follows a pure comparative fault rule, which means you can still receive compensation even if you were partially to blame. If the insurance company declares your vehicle totaled and reduces your payout based on shared fault, you still have the right to dispute that percentage.

We've assisted drivers from Downtown Tempe who were wrongly assigned 50% fault in a two-car collision—until discovery revealed surveillance footage contradicting the adjuster's claim.

Final Thoughts: Don’t Let a Total Loss Catch You Off Guard

A total loss declaration can feel like another blow on top of an already difficult situation. But you still have rights—and you still have negotiating power. Insurance companies are counting on you to accept a rushed, lowball offer. Don’t.

Whether your car was totaled in a crash caused by a hit-and-run driver or you’re still waiting on the insurer to return your calls, we can help. Visit our legal resources page or contact us to learn more about your property and injury recovery options.