After a car accident, dealing with insurance can be overwhelming. One of the most confusing terms you might encounter is “Totalled Car.” This comprehensive guide will explain what it means when your car is declared a total loss and outline the steps you should take.
What Does it Mean When a Car is Totalled?
A car is considered “totalled,” or a “total loss,” when the cost to repair the damage from an accident exceeds the vehicle’s actual cash value (ACV). Insurance companies use this determination to decide whether to repair the car or pay you a settlement. The specific threshold for declaring a car totalled varies by state and insurance company, but it generally falls between 70% and 100% of the ACV. Sometimes, a car might be declared a total loss even if it’s repairable, if the repairs would make it unsafe to drive.
Determining the Value of Your Totalled Car
Your insurance company will determine your car’s ACV, which is the fair market value of your vehicle before the accident. Several factors contribute to this calculation, including:
- Year, Make, and Model: Newer cars with lower mileage generally have a higher ACV.
- Pre-Accident Condition: Any existing damage or wear and tear will lower the ACV.
- Mileage: Higher mileage typically reduces the value.
- Optional Features: Added features like leather seats or a sunroof can increase the ACV.
- Comparable Sales: The insurer will research recent sales of similar vehicles in your area to determine a fair market price.
You will receive a total loss valuation report detailing how the insurer arrived at the ACV. Don’t hesitate to ask for this report; it’s crucial for understanding the offered settlement.
What Happens After Your Car is Declared Totalled?
Once your car is declared totalled, your insurance company will offer you a settlement for the ACV. This amount should cover the value of your lost vehicle, allowing you to purchase a comparable replacement. You have the right to negotiate this settlement if you believe the offer is too low. Providing documentation like maintenance records and recent appraisals can strengthen your case.
Disputing the Insurance Company’s Valuation
If you disagree with the insurance company’s valuation, you have several options:
- Negotiate: Present evidence supporting your claim for a higher value.
- Appraisal Clause: Most insurance policies include an appraisal clause, allowing you and the insurer to each hire an independent appraiser. If the appraisers disagree, a third-party umpire will make the final determination.
- Legal Action: As a last resort, you can consider legal action to dispute the valuation.
Keeping Your Totalled Car
In some cases, you might choose to keep your totalled car. If you do this, the insurance company will deduct the salvage value – the estimated worth of the damaged vehicle – from your settlement. You will also need to understand the requirements for registering and insuring a salvaged vehicle in your state. This often involves inspections and specific documentation.
Conclusion
Dealing with a totalled car can be a complicated process. Understanding your rights and the steps involved will help you navigate this situation effectively. Remember to review your insurance policy, document everything, and don’t hesitate to seek professional advice if needed.
