Maintaining a policy on a car that has been deemed a total loss is generally not necessary, but it depends on specific situations. Once an insurer declares a vehicle totaled—meaning the cost of repairs exceeds the car’s value—they typically settle the claim by issuing a check that reflects the car’s market value minus any applicable deductibles. After this transaction, the insurer usually cancels the insurance on the vehicle.
However, there are a few reasons you might consider keeping the policy active for a short period. If you intend to replace the totaled vehicle immediately, maintaining insurance coverage can ensure there’s no lapse in coverage history, which can be beneficial for your insurance record and avoid potential premium increases. Additionally, a continuous policy can make it easier to transfer coverage to the new vehicle.
In cases where you’re still driving the totaled car temporarily (if it’s legally drivable and registered), maintaining liability coverage might be necessary. Always consult with your insurance company for advice specific to your situation and to understand the implications of keeping or canceling your policy.
