A car is totaled when it is deemed uneconomical or impractical to repair because it has been severely damaged due to an accident or other event. Your insurance provider, or the insurer of the at-fault vehicle in a collision, is usually the entity that will assess the extent of the property damage and determine whether or not a car is totaled.
The insurer will consider your vehicle’s actual cash value and determine if the cost of repairs exceed a threshold percentage, usually 70% to 75% of a vehicle’s actual cash value, which would likely render your vehicle a total loss.
To ensure you receive a fair settlement offer from the insurance company, you must prepare several documents to support the valuation of your car and its fair market value. If you believe your own insurer acts in bad faith or isn’t offering a fair settlement, or the totaled car resulted from a car accident event, and wish to pursue a claim with the other driver’s insurance company, consider consulting with a car accident lawyer.
Common Causes of a Totaled Vehicle
A totaled car can result from various types of car accidents, including collisions or rollovers, which cause significant damage. However, your car can also be rendered a total loss due to natural disasters such as earthquakes, hurricanes, fires, and explosions.
Steps to Take Immediately After a Car Accident
After a car accident, you should first prioritize your safety, check for injuries, move to a safe location, and request medical aid.
Most state laws require you to contact authorities to report the accident if there is property damage, personal injuries, or a fatality. Before leaving the accident scene, take photos and videos of the accident scene, the damage to your vehicle and the other cars involved, and your injuries.
Write down the contact and insurance information from the other driver and the contact information of eyewitnesses. This will be useful if you decide to pursue a personal injury claim to seek compensation for your injuries and other losses. Learn more about personal injury claims and compensation.
Report the accident to your insurance company and consult with a car accident attorney to understand your legal options. Learn more about personal injury claims and compensation from our personal injury lawyers.
How an Insurance Company Determines if a Car is Totaled
Most insurance companies use a threshold percentage to determine if a car is totaled. This percentage usually revolves around 70% to 75% of your vehicle’s ACV (actual cash value) and will determine whether or not the repairs exceed the car’s value.
If your car requires repairs that exceed the established threshold, it is considered a total loss. An insurance adjuster will assess the damage and estimate the cost of repairs.
What To Do if Your Car is Deemed a Total Loss
Dealing with a car declared a total loss isn’t easy, but when you speak to your insurance company, they will determine if your vehicle is a total loss. You should review your insurance policy and see if you have any benefits that apply to your totaled car.
The insurance company will provide you with your vehicle’s ACV, representing its pre-accident value. You can either accept the offer from the insurer and sign the title over to the insurance company, or you can retain ownership of the vehicle. You can later decide to repair or sell parts of it to mitigate costs. You should be aware that the salvage value of the vehicle will be deducted from your cash settlement amount if you choose to retain ownership of the vehicle. Various factors will affect the value of a totaled car, including:
- Pre-accident condition
- Mileage
- Age of the vehicle and if there are any optional features or upgrades
If your vehicle was in good working condition before the event, had lower mileage, and had additional features or upgrades, this could increase the value of the vehicle.
Negotiating With Insurance Companies For a Fair Settlement
Before you negotiate with the insurance company, you should gather evidence to support the valuation of your car. Keep maintenance records and receipts close, analyze comparable cars to present to the insurer, and be prepared to explain why you believe the initial offer is insufficient.
If, after providing the documents supporting your vehicle’s value, you are unable to reach an agreement with the insurer, then you might need a third party, such as an attorney, to help. Understanding the implications of a totaled car can be difficult, especially if other laws and circumstances apply to your case.
Legal Options Available After a Car is Totaled
When an insurance company acts in bad faith, you can consult with an attorney focusing on insurance claims to reach a fair settlement offer. At Gingras, Thomsen & Wachs, LLP, we offer free consultations for such cases and can help you navigate the next steps if a fair settlement cannot be reached. Explore our expertise in handling insurance claims.
