What To Do If Your Car Is Totaled With Only Liability Insurance

Getting into a car accident is scary enough But finding out your car is totaled when you only have liability insurance can be a real nightmare Unfortunately, this is a situation many drivers face at some point.

I learned the hard way after my old Honda Civic was T-boned at an intersection. I had only paid for basic liability coverage at the time, thinking I could save some money. Boy, was I wrong. Here’s what I learned from that experience and what you can do if your car is totaled but you only have liability insurance.

Liability Insurance Won’t Cover a Totaled Car

The first hard truth I had to accept was that liability-only policies provide zero coverage for damage to your own vehicle, Liability insurance only pays for

• Injuries to other people caused by you
• Damage to other people’s property that you cause

It does not pay anything for repairs or replacement if your car is totaled, regardless of who caused the accident.

Collision and comprehensive coverage are what pay for damage to your own car. Without them, you’re on the hook for the cost. I found out the hard way when my insurance denied my claim after the accident.

File a Claim Against the At-Fault Driver

Even though your own insurer won’t pay out without collision coverage, that doesn’t mean you’re completely out of luck. If the other driver was at fault for the accident, you can make a third-party claim against their liability policy.

This is what I had to do after my accident. The other driver ran a red light and admitted fault, so I contacted their insurance company right away.

To file a third-party claim:

• Get the at-fault driver’s name, contact info, insurance details, and policy number
• Call their insurance provider to start a liability claim
• Be prepared to provide your vehicle information, description of damages, and repair cost estimate
• Submit any evidence you have showing the other driver’s fault

The other driver’s insurer will investigate and determine fault before agreeing to pay for your totaled car. This process took several weeks in my case, but eventually I received a fair settlement offer.

Negotiate the Settlement Offer

One mistake I made was accepting the first settlement offer from the other driver’s insurance company. I later realized the amount was too low for the value of my car.

If you feel the insurer’s initial settlement offer is unfair, don’t be afraid to negotiate! You can counter with a higher demand along with evidence to justify it.

Some tips for negotiating a better settlement:

• Research the actual cash value of your make/model based on year and condition
• Get repair quotes from mechanics showing the total cost
• Provide photos proving more extensive damage
• Threaten to file a claim with the state insurance regulator
• Suggest you’ll take the issue to small claims court

Reaching a compromise may take some back-and-forth. But in many cases, the insurer will eventually pay more to avoid legal action.

What If the Accident Was Your Fault?

Let’s say you caused the accident that totaled your car. Without collision coverage, you’re completely responsible for the cost of repairs or replacement.

You have a couple options in this scenario:

• Pay out of pocket – This is only realistic if you have plenty of savings set aside. Totaling a newer car can cost thousands to replace.

• Take out a car loan – You may be able to qualify for an auto loan to buy a used car, though interest rates are high for older vehicles.

• File a claim under your comprehensive insurance – Comprehensive coverage can help if your car was totaled by something other than a collision, like weather, fire, or theft.

• Buy a beater car – You can find decent used cars for $1,000 or less on Craigslist or Facebook Marketplace if you just need basic transportation.

No matter what, make sure to update your policy limits once you have a replacement vehicle. I learned my lesson and got comprehensive and collision coverage after having to buy a junker car with my own money.

Tips to Avoid This Situation in the Future

I definitely don’t recommend learning these lessons the hard way like I did! Here are some tips to avoid having a totaled car with only liability insurance down the road:

• Get quotes for full coverage – The premium increase may be less than you think and worth the peace of mind.

• Increase your deductible – This can lower your monthly premiums while still providing coverage.

• Drop collision on older cars – Once your car is only worth a few thousand dollars, collision coverage is harder to justify.

• Ask about discounts – Taking a defensive driving course or bundling home and auto policies can help lower rates.

• Raise your liability limits – Make sure you have adequate coverage in case you cause an accident.

• Maintain your car – Keep up with service and wear-and-tear repairs to keep your vehicle safer on the road.

• Drive carefully – Avoid distractions and be extra cautious in bad weather when accident risk is higher.

Don’t Gamble with Liability-Only Insurance

My experience taught me first-hand why it’s so risky to only carry the minimum liability insurance. Without collision coverage, you can end up in financial ruin if your car is totaled.

Paying a bit more each month for full coverage is worthwhile protection. Or at least get a quote so you can make an informed decision based on the cost in your situation.

I hope by sharing my story it helps others avoid learning this lesson the hard way. Don’t wait until it’s too late! Talk to an insurance agent about your coverage options so you’re fully prepared in case the worst happens.