Definition Of Totaled Or Total Loss
To start, the popular conception of totaled as referring to a car so badly damaged that it cant be repaired or driven is certainly accurate. Its just not complete.
The formal definition of totaledthat is, the definition used by insurance companies in deciding what to pay a car owner for a damaged carhas a lot more to it.
Insurance companies define a totaled car as one for which the cost of repairs plus salvage value exceeds the cash value of the car in working condition. Insurance companies also sometimes call this a total loss.
Damage that makes a car undrivable and unrepairable will virtually always qualify as a total loss. But that doesnt have to be the case for an insurance company to deem a car totaled.
For example, a highway pileup may tear a cars entire front end off. The cost of replacing the front-end, engine, and other systems in that car might amount to $10,000. If the cars value is only $8,000, then theres no financial sense in repairing it. An insurance company would call this car totaled, even if its repairable.
Lets look at another example. Suppose an older car with a market value of $2,000 sustains $3,000 in mostly cosmetic body damage. You can still drive it, and it works just fine. However, because the repair cost exceeds the cars cash value, an insurance company could deem it totaled.
In short, what we think of as a totaled car differs substantially from what an insurance company treats as a totaled car.
How Much Does Insurance Pay For A Totaled Car
If your vehicle is a total loss, you have two choices: You can take the cash settlement for the ACV of your vehicle or, if your state allows, you can retain the salvage and request the title and damaged vehicle be returned to you.
Most customers choose to take the settlement value, which is the figure generated by the industry-leading vehicle valuation database. Payment goes to the customer if the vehicle is owned outright. If theres a lienholder, such as a bank or a credit union, payment goes to that lienholder. All payments are made after subtracting the customers deductible.
Where To Sell A Totaled Car
To start, it helps to understand what GAP insurance is all about. GAP is an acronym for three words: Guaranteed Auto Protection. Its an optional insurance policy you can purchase, but its only important in one situation. GAP insurance is important when your car is worth less than your car loan balance.
Its a situation known as negative equity. Think of it like this. You have a car that youve bought and its almost paid off. The car is worth more than the remaining balance on your car loan. If youre in the positive, its simply called equity. But if youve just bought your within the past couple of years, your loan balance is higher than the amount your car has initially depreciated. Thats negative equity.
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Can Airbags Injure A Driver Or A Passenger
If not used properly, airbags can injure a driver or passenger. Airbags are made to be used in addition to wearing a seatbelt. You should always use your seat belt to avoid being thrown into an airbag.
The NHTSA, National Highway Traffic Safety Administration, recommends keeping a 10-inch distance between the driver or passenger and the front airbag.
You should maintain enough distance to be able to reach the pedals comfortably without being too close to the steering wheel.
Auto insurance companies want drivers to be safe on the road. Getting your airbags checked if you are buying a used car, and wearing your seatbelt can ensure safety.
Whether youre shopping around for insurance on a new car after a total loss or just want to compare rates, we can help. Enter your ZIP code here to start saving on auto insurance today.
What Does It Mean When A Car Is Totaled
Typically cars are totaled when damage exceeds 65% or 70% of the vehicle’s market value. Rick Ward, director of auto claims for MetLife Auto & Home, says the standard for deciding when a car is a total loss varies by company and may be set by state regulators. You can find out the threshold by contacting your insurance agent.
What happens when insurance totals your car? Obviously, its not the best news, especially if you really like the vehicle. In general, heres the process of what happens when you total your car:
The insurer will calculate the car’s actual cash value . The ACV is how much your vehicle is worth after factoring in depreciation. On average, vehicles depreciate more than 20% the first year and approximately 10% each additional year for the first five years, according to Erie Insurance reports using Carfax data.
After that, the insurance company will calculate an estimate of the car’s market value, based on the make, model and year, mileage, and condition, as well as the demand in your area for the type of vehicle you have.
Another factor used to estimate the car’s value is the resale value of the parts and the metal.
If the cost of repairs plus the scrap value equals or exceeds the ACV of your car before the accident, then it is totaled.
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What Is A ‘totaled’ Car
Depending on your state and whether you or another driver were at fault in the accident, the damage to your car may be covered either by your insurance policy or the other driver’s. If you file an insurance claim, your insurance company will assign a claims adjuster to your case. The adjuster’s job is to determine how much their company should pay out on the claim.
The adjuster may conclude that your car is totaled, or a total loss, if it isn’t worth repairing or isn’t repairable at all. Insurance companies have their own formulas for making that determination. For example, the insurance company may call your vehicle a total loss if the cost of repairing it exceeds 80% of its value. If your car is worth $15,000 at the time an accident occurs, then the 80% cutoff would mean repairs likely wouldn’t be authorized if they cost more than $12,000.
Claims against the other driver will fall under their policy’s property damage liability coverage. If your policy is the one that will be paying for the damage to your car, either your collision coverage or comprehensive coverageif you have anywill be involved. Collision coverage is for damage to your car caused by an accident with another vehicle, while comprehensive coverage is for damage caused by something else, such as a fire or fallen tree.
If your car is totaled, here are seven ways you might consider handling it.
Can I Keep A Totaled Car
It is possible to buy back your vehicle with a salvage title once it is deemed a total loss, though that is not usually a great idea, for a variety of reasons. Insurance companies pay actual cash value for a totaled car, minus the deductible. You have the option to pay the insurance company a small fee plus the salvage value of the vehicle in some states. Once you buy the vehicle back, it is yours to do with as you please. You will need to check with your insurance company to see whether any restrictions apply to insuring a vehicle with a salvage title.
Knowing whether or not your vehicle is totaled is the first step in the claims process. If you are still unsure whether or not your car is totaled, file your claim and ask your claims adjuster for more information. It is times like these in which you’ll learn a lot about the quality of the customer service provided by your insurance company.
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Liability In Truck Accidents Caused By Blown Tires
It is the responsibility of the trucking companies to ensure that their trucks are in proper condition before they begin to drive. They must have a maintenance schedule for the vehicle so that a professional can catch a problem with the truck before it causes a catastrophe on the road. A company that does not take its maintenance responsibility seriously will put its drivers at risk, as well as their vehicles.
Failing to keep trucks in working order can be seen as negligence in court as well, so a company that fails to comply may find itself buried in lawsuits. Improper tire inflation can also cause a tire to fail explosively. Tires are made to support a specific amount of air, and deviation from that amount increases their risk of failure. Too much air in the tire can cause prime it to explode purely from its internal pressure.
An under-inflated tire leaves space for heat to enter the tire. The heat then causes the air to expand, which creates the same problem as an over-inflated tire. In both scenarios, the negligent party depends on why the tires had an improper amount of air in them. If the tires are recently serviced, the company that performed the maintenance might be liable for the damages.
What Does It Mean For A Car To Be Totaled
The term totaled is short for total loss. It is a way of saying that the cost of repairing the vehicle is greater than the actual cash value of the vehicle. Actual cash value is the amount your vehicle would have sold for on the date of the accident, in whatever condition it was in before the accident.
So, a car worth $5,000 that suffered $8,000 worth of damages in an accident would be considered totaled.
Some states have laws that force insurance companies to consider a vehicle totaled if a certain amount of damage is done. In New Jersey, there is no specific threshold, but an insurance company will often total a vehicle if the appraised damages equal 80% of the vehicles ACV. The insurers have enough experience with car repairs to know that once repairs begin, the body shop is likely to find hidden damages that need to be fixed, which ultimately makes the actual repair costs more than the value of the car.
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The Truth About ‘totaled’ Cars: How To Keep Yours
Crashed your car? Bummer. Even worse is getting a call from your auto insurance company saying its a total loss and should go to the junk yard.
Your attachment to your vehicle may be sentimental. In some cases, your bond may be financial: you may not be able to replace the totaled car with the money your insurance company is willing to pay. There are options learn more about what happens when your car is totaled and what you can do.
When Is A Car Considered Totaled
A car is considered totaled when its deemed to be a total loss after something unexpected happens. Insurance companies determine a car to be totaled when the vehicles cost for repairs plus its salvage value equates to more than the actual cash value of the vehicle.
So, how does your insurance determine a totaled cars value? Appraisers will estimate the cost of repairs, then determine if the cost to repair the vehicle including things like cost of replacement parts, salvage value and labor fees will equate to more than what the car is actually worth.
You might take one look at your car and figure you wont be getting behind its wheel anytime soon, but your insurance company will actually decide whether your car is considered totaled. So, when your insurance totals your car what value do they use? Theyll likely use the vehicles actual cash value to determine the worth of the car when your vehicle is a total loss.
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What Should You Do If You Think Your Car Might Be A Total Loss
Please note that your vehicle is not officially a total loss until your adjuster confirms it after inspection.
Calculate Your Vehicles Value
Insurers use actual cash value , also known as fair market value, during this step of the process. This number is essentially the amount your car was worth before the accident or incident occurred. To put it another way, it’s your cars replacement cost, minus depreciation. As an example, here’s how GEICO determines a car’s ACV:
- Assess recent sale prices of similar vehicles in your area.
- Account for mileage and existing damage.
- Consider vehicle options and add-ons.
GEICO and other insurers also use their own valuation software during this step of the process.
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What Happens To A Totaled Car
When a vehicle is declared a total loss, it may either be repaired or put up for sale at a salvage car auction. Usually, a totaled vehicle will be sold to a salvage yard and the insurer will keep the money from the sale. If you’re legally permitted to keep your totaled car, your insurance provider will receive bids from different auto salvage companies and then determine the fair market value based on these bids. They’ll deduct this from the amount they pay out to you.
In most states, the title of “totaled vehicle” must be changed to the “salvage” title. This means you won’t be able to get a license plate until you finish repairing your vehicle and apply for a new title. Before you decide to keep your totaled car, consult your insurer about the laws regarding salvage titles in your state.
How To Sell A Totaled Car
Your car has quite likely met its demise. It may have been in an accident, taken an unexpected dip in a pool or floodwaters, or gotten a little extra toasty because of a wiring malfunction. You can tell at a glance that repairs arent going to be cheap, or they may not be possible at all. You have to figure out what to do with your totaled car.
Your adjuster is helpful to a degree but you dont get any answers until theyve decided what to do with your smashed-up car. And once they determine its a total loss vehicle, youll have to come to an agreement on its value. But just how much will that be?
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How Does The Insurance Company Determine A Car Is A Total Loss
To determine whether a car is a total loss, the insurance company must calculate the vehicles actual cash value immediately before the loss occurred and estimate the amount of damage. Most insurers work with a third-party vendor that aggregates vehicle data to determine the ACV. The insurance company will then send an adjuster to inspect the damage and estimate the repair costs.
If the damage exceeds the threshold set by the state or insurance company for totaling a car, the insurer will declare it a total loss. If this happens, the carrier will reimburse you for the actual cash value of the vehicle.
Even if you get into a car crash and your vehicle is not completely totaled, your insurance company may still pay for your repairs.
Car Totaled In Crash Here Is An Overview Of The Timeline After The Accident
After a serious collision, most people want to get through the claims process as quickly and smoothly as possibleso that the matter is resolved and they can move on with their life. Unfortunately, in some cases, auto accident claims get bogged down by uncooperative defendants or aggressive insurance companies. Here is an overview of the timeline after your vehicle was totaled in a crash:
- Notice to Defendants/Insurers: Soon after a crash, it is important to give written notice to all other implicated parties, including potential defendants and their insurance companies. During this stage of the claims process, you should gather key insurance details, such as the policy limits and a list of excluded drivers.
- Comprehensive Investigation of the Collision: If your vehicle was totaled , that means you were involved in a serious crash. These accidents always require an in-depth investigation. A Georgia car accident lawyer will help you gather and organize all of the evidence you need to bring a claim.
- Medical Treatment for All Injuries:Auto accident injuries should be evaluated by a qualified doctor. Even if you do not think your injuries are that bad, you still need to get yourself examined by a skilled medical professional. Medical treatment is the biggest variable in the length of the claims process. If your vehicle was totaled but you were uninjured, the claims process will typically be quicker.
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Start Shopping For A New Car
Once you know how much money you are going to receive from your insurance company, you can start looking for a new car. In several states, including California and Florida, insurers are required to pay for the sales tax on your new vehicle as a part of the final settlement. Just keep in mind that you usually have to request reimbursement within 30 days of purchasing the new car.
Is My Car Totaled
Your insurance provider will tell you if your car is totaled or not. If youd like to get a sense for what your insurer might say in this situation, answer these questions:
- Can you drive the vehicle?
- How much will it cost you to repair the vehicle?
If your car wont start, and especially if it wont drive, its more likely that your insurer may declare it totaled.
And if a mechanic or similar specialist estimates repair costs to be higher than the Kelley Blue Book value of your car, its also more likely to be a total loss.
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