After a collision, your auto insurance policy typically pays for repairs. However, if the damage is extensive, they may declare the vehicle a "total loss." In this case, the company might send the junk car to a salvage yard and offer you a payout. If your vehicle was extremely damaged in a recent accident, learn more about the potential outcomes below.

Common Questions About Wrecked Vehicles

When do insurers consider cars total losses?

Insurers want to minimize expenses. If the cost to repair your vehicle is almost as high as its value, it's easier for them to replace the covered item than to have you repair it.

In Minnesota, if the price of repairs is at least 80% of a car's value, the insurance company will pay you the vehicle's value before it was damaged, minus the deductible from your collision coverage.

Will your insurance company buy you a new car?

Typically, no. Since a car's value depreciates as soon as it's out of the dealership, drivers receive less than the replacement value for the same model.

However, if the car was only a few months old, the insurance company may pay for a new one. If you have gap coverage, the insurer also will pay off any outstanding loans on the vehicle.

Can you keep a totaled vehicle?

Yes, Minnesota law permits this. Some people prefer to repair damaged vehicles themselves, but they have to cover all expenses out-of-pocket. Also, keep in mind that the Department of Motor Vehicles must reinspect your car after repairs it to ensure it's legal and safe to drive.

How does wrecking a car affect insurance rates?

Your premiums will almost certainly increase after a significant accident. Luckily, you can save money by picking a new car with safety and anti-theft devices or raising your deductibles. Also, maintain a solid credit rating by paying all bills on time since credit affects your rates.

If you want to get cash for a totaled vehicle, contact the junk car removal experts at Cash for Junkers MN in Ham Lake. This salvage yard picks up junk cars throughout the Twin Cities area and offers fair rates for vehicles in all conditions. They also offer towing services for cars that aren’t safe to drive. Learn more about what they do with junk cars on their website, or call (763) 218-3149 to discuss your needs.