I Wish My Car Had Been Totaled After an Accident. Here's Why

Years ago, I was involved in an automobile accident when someone hit my car. Fortunately, everyone was OK, but the car was pretty badly damaged so we had to make an auto insurance claim. Since the other driver was at fault, her insurance was responsible for covering the costs, and the company sent out an adjuster to assess the situation.

The car insurance company ultimately decided that it was going to pay to fix the vehicle, despite the fact it needed a ton of work, rather than declaring it a total loss. I was really disappointed in this outcome -- and not because I was hoping to be able to buy a new car with the proceeds. Here's why I wish the car had been totaled instead.

The insurer didn't compensate me for diminished value

There's a simple reason why I wasn't happy that the insurer didn't total my vehicle. As soon as my car was involved in an accident and had extensive repairs, this went on the vehicle's record. So in the future, when I go to sell the vehicle, this will show up on Carfax reports and other searches of the car's VIN number.

Unfortunately, an accident in a car's history reduces its value to future buyers. In other words, my car was no longer worth as much because of the fact it had been subject to these repairs. This is called diminished value.

I expected, and wanted, to be compensated for this reduction in what my car was worth, especially since diminished value claims are allowed under the law where I live. The problem was, the insurance company did not agree. It claimed that because my vehicle wasn't new and wasn't a high value one that I wasn't able to prove with certainty that I had actually sustained financial loss because of the crash.

I could have tried to fight this, and I actually did talk to two lawyers in a free consultation about what my options were. The problem is, it can be pretty hard to prove diminished value claims due to the challenges in accurately valuing the pre- and post-market value of the damaged vehicle.

No car dealerships I talked to wanted to provide me with written documentation of the reduction in value (including the dealership I bought the vehicle from), and both lawyers said it wasn't worth the time or hassle to try to sue since the amount of loss was relatively small (anywhere from a few hundred to a few thousand dollars).

This meant I was basically out that money. And I didn't really feel very safe in the car anymore due to the extensive repairs, so I opted to sell it soon after and definitely ended up getting less than the amount I otherwise would have. Had the car just been totaled, though, the insurer would have had to pay me the fair market value. In this instance, I would have received what the car was actually worth before the crash had occurred.

Car accidents inevitably mean losing money

The sad reality is, even without auto insurance, and even if someone else is to blame, being involved in a car accident almost always means you'll be out some money. This could be because the insurer doesn't adequately compensate you for diminished value or because your car is totaled and you can't find one that's the exact same price to replace it with.

This is just one more reason to be sure you have an emergency fund in a savings account ready to go, as you never know when an accident will strike.