Total Loss Claims
Learn how a total loss claim works and the next steps to take.
We understand that accidents happen. If your vehicle was recently involved in an accident, contact your insurance company immediately to start the claims process. A totaled vehicle is when an insurance company decides is not worth the cost to fix. Most states along with insurance companies have formulas for determining when a car is totaled. If your insurance company deems that the repair costs exceed the vehicle’s value, the insurer may declare the vehicle a total loss.
Terms you may hear related to total loss
| Total Loss/Totaled |
A total loss occurs when an insurance company determines that the costs to repair a vehicle (due to damages) are greater than a certain percentage of the vehicle’s Actual Cash Value (ACV). |
| Actual Cash Value (ACV)/Market Value |
Actual cash value (ACV) is the standard that insurance companies prefer when reimbursing policyholders for their losses. Actual cash value is equal to the replacement cost minus any depreciation. |
| Salvage Value/Scrap Value |
The estimated value of the vehicle if it is sold to a salvage yard. After the claim has been completed, the insurance company will sell the totaled vehicle to a salvage yard. The salvage yard will sell the parts from the totaled vehicle. |
| Power of Attorney (POA) |
A POA enables the insurance company to file relevant paperwork to transfer the title to them on your behalf. |
| Guaranteed Auto Protection (GAP) |
If your car is totaled and you owe more than the car's depreciated value, GAP is an optional vehicle coverage that helps pay down your auto loan. If the vehicle is deemed a total loss, GAP will pay the difference between the ACV of the vehicle and the outstanding contractual balance of the loan (with potential deductions such as missed payments, prior damage, etc.). GAP simply helps pay the “gap” between the depreciated value of your vehicle and what you may still owe on the vehicle. |
| Backend Contracts (warranty or service, tire and wheel, key, credit life and disability, etc.) |
A contract that covers specific items for the vehicle or loan and is serviced by a third party. Typically, a backend contract is purchased through a dealership at the time of the vehicle purchase. |
Your insurance company gets the final say
The insurance company will determine if your vehicle is a total loss. To complete your claim and ensure the insurance settlement payment is issued timely, you will need to work closely with the insurance company. The insurance company will need some documents from you. Receiving the settlement payment quickly will help minimize the interest on your loan.
What to do after your vehicle is declared a total loss
If a total loss has occurred, you will need to have the insurance company contact i-bank and provide complete insurance claim information. We encourage you to reach out to the provider as soon as possible to determine what documentation will be needed to process the claim. For Independent Bank customers, please have the insurance company contact us at 888-716-9293.
Title requirements
There will be documents you must provide to the insurance company. We will exchange some documents with them too.
If you live in a “title holding state” then you must provide the physical paper title to the insurance company. If you do not live in a “title holding state” then the insurance company may request you sign a power of attorney (POA). This will allow the insurance company to transfer the title.
We will provide a copy of the title paperwork we have on file to the insurance company. This helps them confirm we are the lien holder listed on the title.
How your car payment works after total loss
You owe the remaining balance of your loan until it is paid in full. The insurance settlement check will be applied toward the balance of your loan. The insurance settlement amount is based on the actual cash value (ACV) determined by the insurance company. The determination of the insurance settlement does not consider the balance of your loan.
To ensure your account remains in good standing, continue making your monthly payments in accordance with your contract. Your account status may be reported to the credit bureaus at the end of each month until your account is paid in full. If there is an overpayment on the account, the overage will be refunded to you. If you are enrolled in automatic payments, we will not cancel them unless requested by you.
How to make a payment
Pay online
Pay by phone: 888-716-9293
Pay by mail:
Independent Bank
5050 Poplar Ave., Suite 110
Memphis, TN 38157
What to expect with GAP coverage
Guaranteed Asset Protection (GAP) is designed to help you with the remaining balance if the insurance proceeds did not pay your loan in full.
The insurance company determines the Actual Cash Value (ACV) or market value of your vehicle, which is applied to your loan balance. GAP is to help pay the difference between the ACV and the remaining loan balance.
Keep in mind, your GAP agreement may have exclusions and may not cover the full deficiency balance. GAP policies typically do not cover missed payments, fees or interest that has accrued due to late payments. We recommend that you carefully review your GAP agreement, specifically the description of how your total loss benefit is calculated.
We will file the GAP claim and will work with you to obtain any documents needed. You will need to keep in touch with the GAP provider to ensure the claim is finalized.<
How an extended warranty/service contract works
If you purchased an extended warranty or service contract, you may be entitled to a pro-rated/partial refund. If there is still a remaining balance on the loan, the pro-rated refund is sent to the lender to help reduce the balance.
We will attempt to contact the dealership where you bought your vehicle and request the cancellation of your extended warranty, credit life, and/or disability insurance, where applicable. You may also contact the dealership to help expedite the cancellation process. Once we receive the warranty proceeds, we will apply the funds to the loan balance. If this results in an overpayment, you will receive a refund in the mail after your payoff.
We recognize that dealing with a total loss vehicle may be stressful, and we’re here to do what we can to support you while you navigate through the paperwork and logistics. If you have any other questions, you can reach out to us at 888-716-9293.
