What Does It Take to Total a Car?

Anyone who has been involved in a car accident will be confronted with a variety of issues to address immediately after the crash has occurred, including notifying and working with the insurance company.

One of the most confusing aspects of bringing in an insurance claim after a vehicle accident is determining when to total a car. What the owner of a vehicle assumes would total a car might not match up with the insurance company’s definition. The payment of total car loss also comes with specific procedures followed by the insurance company that are important for the vehicle owner to know.

As indicated by ValuePenguin.com, you need both product damage liability and comprehensive or collision coverage in order to qualify to receive a total loss car insurance settlement.

What is a Total Loss Threshold?

A car will be declared a total loss when the insurance company has to apply for a salvage title. Every state in the U.S. sets its own threshold for a vehicle to be considered a total loss. Certain states might classify that a vehicle with damages at 75 percent of its value as completely totaled, whereas others require 100 percent.

Does Every State Use a Total Loss Formula?

There are 22 different states that don’t have a specific threshold percentage assigned for declaring when to total a car. Instead, they use a total loss formula. The insurance company determines the scrap value of the vehicle in addition to the cost of potential repairs and if this number exceeds or equals the actual cash value of the vehicle, the car will be totaled. Older cars are more likely to be totaled because of their decreased actual cash value, and because it can be more difficult to find replacement parts.

How Is a Reasonable Value of the Vehicle Determined?

If you are not familiar with the various strategies that a car insurance company might use to determine a vehicle’s value, it could be tempting to accept the first settlement offer that is presented. The wrong vehicle valuation, however, could lead to you agreeing to a total loss car insurance settlement when the vehicle in question does not actually need to be totaled.

According to carinsurancecomparison.com, insurance claims adjusters use computerized vendor quotes, car value books like Kelley Blue Book, and recent market sales in the area to determine the fair market value of the vehicle after a loss.

The Balance says that consumers should do research on their own to determine the value of the vehicle to decrease the chances of the insurance company relying entirely on their own final payout figure.

According to Insure.com, there are 34 states that require auto insurers to reimburse you for sales tax when you are forced to replace a vehicle after you have been in an accident. Even if it isn’t required by law in your state, many insurers will still provide this reimbursement if asked, so don’t hesitate to do so. Remember, you often have a 30-day limit to make the request.

How to Total a Car for Insurance

The insurance adjuster will look at the vehicle year, vehicle make, model, mileage, and overall condition of the automobile. If you have an older car that has recently had a brand new transmission installed, a state-of-the-art stereo system added on, new tires or complete A/C unit replaced, the car may receive additional consideration for this money you put into it. In order to make your case for more money, you will need to provide receipts for any mechanical work or extra options you’ve added since purchasing the vehicle.

One way to protect yourself is to purchase GAP insurance, which pays the difference between what you owe on the vehicle and the vehicle’s actual total value. GAP insurance is recommended to consumers who finance a car for 5 years or more, those who buy a model that depreciates faster than average, and anyone who puts very little money down on a car.

If you haven’t already, start collecting documentation on your vehicle now — no one looks forward to agreeing to a total loss car insurance settlement, but you should collect documentation for costs and improvements on the chance that you do need them.

What if I Want to Keep the Car?

According to Insure.com, safety should be your number one concern if you want to keep your car. Even if a vehicle doesn’t look terribly damaged, there could be cracks in the body or undercarriage that you can’t see.

Professionals who evaluate damaged vehicles for a living know when to total a car, so  if they believe it will be too expensive to fix your vehicle, they are probably right. Even if you do fix a vehicle that has been totaled by the insurance company, you will be stuck with a salvage title, which will appear in a national database to alert any would-be buyers in the future.

Have Any Total Loss Car Insurance Settlements Been Reached?

Yes. Last summer, a Florida federal judge determined Geico was on the hook for unpaid fees associated with total loss claims.

The decision led to a $27 million GEICO total loss class action settlement with Florida customers who alleged they were not compensated for title transfer fees and other fees, which policyowners claim should have been considered part of their vehicle’s actual cash value. Each class member was awarded just over $79 from that settlement.

Does a Total Loss Compensation Check Only Cover the Value of the Car?

According to some consumer allegations, insurance companies are not paying the full value of a total loss vehicle to the owner of the car. In declaring when to total a car because of the extent of damages involved, sales taxes and other fees might be ignored in the insurance company’s calculations. If you have recently been involved in an accident that you think might total a car, consulting with an experienced attorney could help you to determine whether or not your rights were potentially violated in the payment of your claim.

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

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