Has your car been totaled? Or are you not sure what it means to total your car?
The effects of a car accident can be far-reaching and profound. Besides the physical injuries your body can experience, car wrecks often result in property damage and other losses. Depending on the nature and severity of the crash, your vehicle may get totaled.
Totaling a vehicle can be both an inconvenience and a financial headache. If your insurance company declares your car totaled after an accident, you may be wondering how to navigate the aftermath. In this blog post, we take a look at the define the meaning of “totaled car” and help you understand your options. That way, you will know what to expect and be in a better position to make informed decisions. This will also go a long way in making the process more manageable.
Car Totaled Meaning
Generally, a totaled car, sometimes referred to as a total loss, is either damaged beyond repair or costs more to repair than what it is worth. However, different states define ‘totaled’ differently. In California, a car is considered totaled if the estimated repair costs exceed 75 percent of the value of the vehicle before it got wrecked.
A car does not need to appear to be outwardly demolished to be considered totaled. In some cases, the damage will not be visible on the outside. So, to make this determination, an insurance adjuster will inspect your car to evaluate the damages and determine if the vehicle is repairable or a total loss.
How Your Car’s Value Is Assessed
How much of a payout will you receive when your insurer declares your car a total loss? It will be determined by your car’s actual cash value (ACV). Actual cash value is the value of the vehicle right before the accident that wrecked it.
To determine a car’s actual cash value, insurance companies typically consider several factors. The factors that impact the ACV of a car include:
- The make and model of the vehicle
- Mileage at the time of loss
- Age of the vehicle
- Special features or custom parts on the car
- Pre-loss condition of the car
- Selling price of similar vehicles in your area
- Salvage value
What to Do If Your Car Is Totaled
Even under the best conditions, experiencing the total loss of your vehicle is bound to be stressful. This can make it difficult to handle the situation properly, something that may end up costing you more.
If your car is totaled, you will want to get the most money from insurance. Knowing what to do and taking the right steps will help you to avoid potential financial pitfalls. Below are some of the options available to you.
Accept Your Insurance’s Offer
This is the easiest way to deal with a totaled vehicle following a wreck. Provided you have the right coverage, your insurance company will make a settlement offer based on the ACV of your car. Under California law, insurance companies will either replace your vehicle or pay you cash equivalent to the value of your car.
Replacement Method
Your insurer might elect to offer you a replacement vehicle which is comparable to your totaled vehicle. The insurer is obligated to to pay for any applicable license fees, taxes or other fees relating to ownership evidence transfer at no cost except for your policy’s deductible. This offer, as well as any rejection of this offer, needs to be documented by the claim file of your insurer. The replacement vehicle needs to be in equivalent or better condition than the totaled vehicle was prior to being totaled. The replacement vehicle needs to be available to be inspected reasonably close to your residence.
Cash Value Method
Your insurer might elect to offer you a cash settlement which is equivalent to a comparable vehicle’s cost, minus your policy’s deductible. The cash settlement needs to include any applicable taxes as well as any fees relating to ownership evidence transfer of any comparable vehicle. The settlement also needs to include any license fee or additional annual fees, computed based on the totaled vehicle’s remaining term of registration.
Comparable vehicles are vehicles of like quality and kind, manufactured by the same company, of newer or the same model year, of a similar type of body, of an identical model type, with mileage and options similar to the totaled vehicle. Newer vehicles may not be considered comparable unless vehicles of the same model year which are considered comparable are not available. When determining comparable vehicles’ costs, insurers may use the vehicles’ actual sale prices or asking prices.
Appeal the Settlement
In case you believe your car is worth more than the insurance company’s offer, you can challenge it and try to negotiate for a higher settlement.
Sell Your Car for Parts
If your insurer does not pay for repairs, you can choose to keep the vehicle and sell off spare parts that are in good working condition. This is a good option if you know or can find people who own the same type of vehicle. Alternatively, you can sell the totaled car to a junkyard or trade it in for a new one.
Donate Your Car
Another option is to donate the totaled car to a charitable organization that accepts such donations. By donating the vehicle to a nonprofit organization, you may be able to claim it as a tax deduction.
Call a Car Accident Lawyer
While you might be able to handle your own insurance claim, you should consider working with a car accident lawyer. Car insurance laws can be complicated, and insurance companies may take advantage of you.
There are many benefits to reaching out to an attorney if your car is totaled. A car accident lawyer will:
- Answer questions about your rights and options
- Help you understand your car’s ACV
- Help you navigate complex legal issues
- Identify and sue the at-fault party
- Negotiate offers with insurance companies to ensure you are compensated fairly for your car
- Pay damages out-of-pocket
- If your car is totaled without insurance, your options for recovering damages may be limited. As such, you will be on the hook when it comes to paying damages out-of-pocket. This includes paying for the injuries and vehicle and property damage you cause, as well as replacing your totaled car.
Repair it Yourself
If you want to keep your totaled car and make it road-ready again, you can opt to repair it yourself. However, you will need to consider whether the vehicle can actually be fixed, the cost of the repairs and how you will finance the repairs.
Do I Still Have to Pay a Loan on a Totaled Car?
If the totaled car is financed or leased, you are still legally responsible for making your car payments even if the car is no longer drivable. The claim payout is likely to go towards paying off the outstanding loan amount. In case the insurance payment is less than what you owe, you will be required to pay the remaining balance.
To avoid paying a lender out of pocket after your car is totaled, consider adding loan or lease gap coverage to your car insurance policy. The coverage will help pay off your car loan if your car is deemed a total loss.
Whose Insurance Will Pay for Your Totaled Car?
California is an at-fault state for auto insurance. So, this means that the driver who caused the collision is responsible for compensating the other party or parties for their losses. As such, the insurance policy under which you file your claim will depend on who is at fault.
If another party is at fault for the accident, their insurance company will pay for your totaled car. However, if you are at fault or there isn’t another driver involved at all, your insurance will pay.
If someone else was driving your car and got into an accident that made your vehicle a total loss, the fault rule comes into play. However, be sure to talk to a lawyer to help you take the right steps.
Contact a Car Accident Attorney Today
Seeking compensation after totaling your car requires more than just understanding the meaning of a “totaled” car. Car accident cases can be complicated. This is why it is important to hire an experienced car accident attorney to help you. The lawyer will assess your claim, help you understand your policy, file the necessary paperwork, negotiate with insurers on your behalf and represent you in court if necessary.
At Nadrich Accident Injury Lawyers, we are a specialized law firm with over 30 years of experience handling car accident cases. Our dedicated lawyers will work in your best interests to help you get fair value for your losses. If you experienced an accident that totaled your car, do not hesitate to contact our team or call our office for a free case evaluation.
Jeffrey Nadrich
Jeffrey Nadrich is a nationally-recognized California plaintiff’s personal injury attorney. He is a graduate of UC Berkeley and UC Hastings College of the Law. He has successfully represented thousands of injury clients over the last 40 years.
