You were in a car accident, but the good thing is no one was seriously injured. However, the insurance company says your car is “totaled” (even though it doesn’t look destroyed). This term can be misleading, which is why we will explain exactly what this means.
When a car is said to be “totaled,” the insurance company has declared it a total loss. That means the cost to fix it exceeds the vehicle’s actual cash value. It may also mean the damage can’t be repaired. Each state has its own rules. In California, a total loss is when the car’s cash value is equal to or less than the cost of repairs. The salvage value is added in as well (actual cash value is what the car was worth before the incident, and the salvage value is its value in a damaged state).
Does My Insurer Owe Me Anything for a Totaled Car?
In general, you are owed the actual cash value of the vehicle. You and the insurer must agree on a way to determine the retail market value. Otherwise, the company must follow your state’s total loss rules, meaning they must offer to replace it with a comparable vehicle, a cash settlement based on similar cars’ actual cash value, or have an appraiser resolve a dispute. Your insurer will determine the car’s value based on the value of similar vehicles in your local area. For a detailed look at their estimate, ask for a total loss valuation report, which shows all the data used to value your car.
What to Do When Your Car Is Totaled
There are many considerations following a car accident. Once you’ve sought medical care and gathered as much evidence as you can, your next steps should be to:
- File an Insurance Claim: Start as soon as you can because total loss claims can take a while to process. Contact your insurance company and the insurer of anyone else involved in the accident.
- Get to an Approved Auto Shop: While you can tow your car to any repair shop, getting it to one approved by the insurance adjuster can streamline the claim process. The shop will provide the adjuster with an estimate for the repairs to determine whether your car is totaled.
- Gather Your Paperwork: It’s important to provide the car’s title to the insurance company. If they determine your vehicle is totaled, you’ll likely need to sign the title over to them.
- Do Your Research: Don’t just take the insurance company’s word for it. Research your car’s actual cash value using the internet, newspapers, and listings at local car dealerships.
- Review the Terms of Your Loan: Check what you still owe on your auto loan. If your vehicle is financed, any settlement money will first go to your lender. Any remaining amount will be sent to you.
Can I Keep the Car?
Usually, you can, but consider the financial consequences. The insurance company can profit by selling salvageable parts; not having that opportunity means they’ll deduct that amount from your settlement check. Also, consider the costs of repairs, getting it inspected, and reinsured. You could donate a totaled car to a charity for a tax deduction, but working with your insurer can mean receiving a payout minus the deductible.
Contact a Lawyer for Help with Compensation
When your car is totaled, being compensated can depend on who was at fault for the accident. Let our attorneys review your insurance policy and determine what your claim is worth. At The Law Offices of Jacob Emrani, we are experienced working with insurance companies and helping clients receive fair settlements. To get started, contact us about your case or call 888-952-2952.