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What would happen when your car is totaled?

Sep 04, 2019
Shamis & Gentile, P.A.
Total Loss

Totaled means damage that cannot be repaired. In the case of a car, when it meets a total loss car accident, it is called as totaled. The conditions that determine your car is totaled are made by the insurance company after checking out various factors and conditions.

What happens when your car is damaged beyond repair?

In case your car insurance company determines with their factors that the car is totaled, there are various ways in which they might compensate you with the value of the car. The insurance company can compensate for the damage in various ways such as replacing the totaled car with a car which is similar in price and segment, offer the owner of the car with cash compensation after comparing the value of the comparable cars in that particular area or offer the victim a cash payout which will be based on various methods of appraisal for example Kelly Blue Book.

As soon as you take or accept the payout offered by the insurance company, the company will become the sole owner of your totaled car and will take ownership of it. In most of the cases, the damaged car is then sold to the salvage yards as scrap for selling. However, the time within which you will be receiving out your compensation amount from the insurance company might take a number of weeks to several months. This depends on the protocol system of your car insurance company. Although in most of the cases, the owners of the totaled cars opt for cash compensation, there are various allegations against the insurance companies for using unfair and unethical means for estimating the value of the damaged cars. This is done primarily to profit from the damaged car and also to give out a lower amount of cash compensation. In case you believe that your car insurance company willfully undervalued your totaled car, you can easily seek for legal lawsuit action against the company. In case you want to be in touch with a professional attorney for filing your total loss lawsuit, you can contact Shamis & Gentile, P.A.

How does your insurance company decide when your car is totaled?

In case after an accident, the cost to repair the damage of your car is equivalent to or is higher than the actual value of the car, your insurance company might decide to declare your car as totaled. Most of the insurance companies opt for actual cash value or the fair value system in the market for determining the actual value of the car. Actual cash value is the amount that your car can get when opted for selling in the open market. This amount is also referred to as the replacement cost of your car. The insurance companies use various methods for determining the value of this number like recent selling price for similar vehicles in the area, mileage of the car, existing damage and extra features as well.

Just after the company determines the actual value for your totaled car, they will get in touch with you with their claims adjuster. The claims adjuster is the one who assesses the damage done to the car and also estimates the total cost for the repairs. After estimating this number, the insurance company will be comparing the market value of your car with the cost required for the repairs and will determine whether or not your car is totaled.

What happens when the damage in the car is more than the cash value of the car?

Insurance companies will declare a car to be totaled when they find out that the damage of the car is higher than the actual cash value of the car. This percentage used for determining is called the total loss threshold. The total loss threshold is determined by the state governments. In most of the total loss threshold is about 75% of the actual cash value of the car.

Total Loss Threshold

When the repairing cost associated with the damaged car is higher than the total loss threshold, it is automatically a loss for the owner. In case the repair cost is less than the total loss threshold, the insurance company might offer the owner of the car a fixed cash payout for covering up the repairing cost of the car. In case the repair cost is more than the total loss threshold, the company will offer you with a sum of money which is to cover the replacement of your car.

What might happen when your car is totaled?

A car accident is considered to be a total loss accident only if your car has been in a fearsome accident and the vehicle is damaged beyond repair. These types of vehicles are also referred to as ‘totaled vehicles’, and the decision of whether the car is totaled or not is made by the insurance agency that you have signed up with for the insurance of your car. The insurance agency takes into consideration a number of different factors, before deeming a car to be totaled.

What factors come into play for an insurance agency to deem your vehicle as totaled?

If the cost that would be associated with repairing your car is close to the actual price or higher than the actual price of your vehicle, the insurance agency might deem it suitable to write off your vehicle as totaled or a total loss. The actual price of your vehicle is determined by the insurance agency taking into account the actual cash price, or fair market price that your vehicle enjoys. This helps them determine the worth of your vehicle. The price taken into consideration is under fair market value and actually refers to the amount your vehicle would have fetched had it been sold in an open market. This amount that your car is liable to fetch might is also referred to as the replacement value for the vehicle. Insurers have a number of techniques that they put into use in order to determine this value. These may include recent prices of sale for similar vehicles in the nearby regions, the mileage that the vehicle has and the existing damage that it has suffered, and any kind of modifications or add-on features that you might have included in your car.

After your insurance agency has determined the fair market value for your vehicle, the insurer will proceed with getting you connected with the claims adjuster. The claims adjuster’s primary job is to look over and assess the amount of damages that your vehicle has suffered and make a fair estimate of how much it would cost in the local market to get it repaired. Once this procedure has been completed and cost that would be incurred for repairing the vehicle is estimated, your insurance company will proceed towards comparing the fair market value of your vehicle against the cost it would levy if you were to repair it. If the former is lesser than the later, the insurance company will deem your vehicle to be totaled.

Insurance companies also tend to save time by declaring your car as totaled, if the cost of repairs or the damage that the vehicle has endured is higher than a pre-set percentage in relation to the actual cash value of your car. Another name for this certain percentage is the Total Loss Threshold. Most states have local laws determining the Total Loss Threshold that is applicable in that state. However, the usual percentage that it stands around is 75% of the actual cash value of the car.

If the cost that you would incur if you were to repair your damaged car is higher than the Total Loss Threshold, your car is automatically deemed as a total loss vehicle. If however, it is found that the cost of repairs is less than the Total Loss Threshold, you might receive a payout from your insurance company to get your vehicle repaired. However, if the situation is that mentioned in the former scenario, they might offer you with a payout that is meant to replace your damaged vehicle.

What actually happens when you total your car?

When your insurance company determines that your car has been totaled, there are a few different ways in which your insurance company might choose to compensate you for the damages. Your insurance company might choose to replace your vehicle with one that falls within a comparable range, offer you with a payout in cash in the range of the value that similar cars have in your neighborhood, or provide you with a compensation or cash payout that is based on other methods of appraisal. One such example is the Kelly Blue Book.

In the case that you have accepted the payout that your insurance company made to you, the insurance company will proceed to take ownership of the damaged vehicle. This damaged vehicle is then sold by the insurance companies to salvage yards, who dismantle them for scraps. Depending on the protocols that your insurance company has, it might take several weeks or months for you to finally receive the payout that your insurance company has offered you.

However, it has been alleged by several victims who have had totaled car damages, that insurance companies make use of inaccurate and misleading information to estimate the fair market values of totaled vehicles, in order to avoid paying a large payout to the consumer. If you believe that the estimation that your insurance company provided you with in regards to your totaled vehicle was undervalued or inaccurate, you are legally entitled to seek representation by a professional attorney and file a class action lawsuit against the insurance company.

Enroll in your class action lawsuit investigation against undervalued total car loss insurances

If you have been insured with an auto insurance policy and have suffered grave damages to your vehicle, such that it has been deemed a total loss vehicle by the insurance company, and have not been reimbursed adequately or fairly for sales taxes and other fees by your insurance company within the duration of the last 5 years, you are eligible to opt for a total car loss insurance investigation. Choose Shamis & Gentile, P.A. to get the best legal representation and file a class action lawsuit against your insurance company and claim the compensation that you deserve.

Submit a Class Action Claim

Submit a class action claim today; there are no associated fees or expenses unless we manage to win the case on your behalf.