Joanna Szabo  |  September 11, 2020

Category: Insurance

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total loss claims after a motorcycle accident

Do you know how your insurance company handles total loss claims after a motorcycle accident? It can be overwhelming and confusing for a person who has already gone through the traumatic experience of a wreck to figure out what’s next, and realizing the ways that the insurance carrier handles what they consider a total loss could help you prepare for cases in which your rights might have been violated.

Sometimes, total loss claims after a motorcycle accident could mean that the owner of the bike does not end up getting the amount of money they thought they would receive from the motorcycle total loss value.

Property Damage Post Accident

One of the most important questions after a motorcycle accident is “what happens when the motorcycle is seriously damaged or not salvageable at all?” This is handled by the insurance company, but the owner of the motorcycle should be aware of their rights as well.

If you find yourself dealing with total loss claims after a motorcycle accident, you need to know what this means and how it affects your damage recovery.

For a motorcycle to be seen as a total loss, according to valuepenguin.com, the owner of the bike must have a property damage liability insurance policy. Total loss claims after a motorcycle accident can be difficult and many bike owners choose to get the help of a lawyer as a result.

Filing a Motorcycle Total Loss Claim

After an accident, riders are recommended to file a claim with their insurance company as soon as they can. The aftermath of a motorcycle accident can be stressful and tragic, but taking action on an insurance claim soon can help prevent issues or stress down the road.

Drivers will need to have their vehicle transported to a location where their insurance company can inspect the damages to the bike. According to Progressive, the insurance company will usually inspect the vehicle carefully to determine when a total loss applies to the policy. A motorcycle total loss is declared when the cost of repairs would go beyond the cash value of the vehicle. This claim is different from other kinds of minor damage claims.

What Determines a Motorcycle Total Loss?

Like total loss claims for traditional automotive vehicles, payments for motorcycle total losses are determined based on the actual cash value of the bike.

The actual cash value of a motorcycle may be determined by your insurance company by factoring in the vehicle’s age, condition, mileage, features, and worth in the local market. Motorcycles may also be considered totaled if the cost to replace the vehicle is only marginally higher than the cost to repair it. This determination is often different depending on the state.

In some states, if the cost to repair the vehicle is more than 50 percent of a vehicle’s value, it will be determined to be totaled, while other states require a higher threshold to be reached. The percentage is generally around 70 percent. If your motorcycle is totaled in a car accident, you may be entitled to a financial sum from your insurance company.

Although the exact motorcycle total loss value calculation will vary, the value of a bike is generally determined by the fair market value of the motorcycle opposed to not what it was purchased for or what you may still owe on the loan. This comes down to what an identical motorcycle could be sold for in the current market.

For the most part, vehicles depreciate over time. However, rare or classic cars and motorcycles may be the exception if they gain value as they age—so determining motorcycle total loss value can be a little more complicated.

As the owner of the motorcycle, you should also do your own research so you can make an informed decision if the insurance company offers you a settlement amount. Being armed with estimates from Kelly Blue Book and other resources as this can help you determine if your insurance’s determination is fair.

The exact motorcycle total loss process will vary, but most involve the same core steps: filing a claim, having a car inspected, and reaching a settlement.

total loss claim after a motorcycle accidentUnique Motorcycle Considerations

A motorcycle’s insurance coverage needs can vary based on whether you plan to ride it around town or travel on long road trips. If you’re going to travel through different states, you might want to discuss this with your insurance agent to ensure your motorcycle is fully covered. This is similar to automobile owners who often receive different rates if they drive 100 miles or more round trip to work than if they only drive 15 miles to work.

Just as insurance companies recommend taking photos of all of your home’s valuables, you might consider taking photos of your motorcycle, especially if you have added expensive parts to your motorcycle. According to Insuramatch, sometimes these expensive motorcycle parts require added insurance protection to be covered.

Risks of a Motorcycle Crash

The U.S. Department of Transportation’s National Highway Traffic Safety Administration released a Motorcycle Safety 5-Year Plan in May 2019 to address the unique challenges of motorcycle safety. They include statistics that indicate a 144-percent increase in motorcyclist fatalities between 1997 (2,116 deaths) and 2017 (5,172 deaths).

The NHTSA reports 51 percent of motorcyclists killed in 2008 and 53 percent of those killed in 2017 were 40 years old and older. Between 2008 and 2017, fatalities increased 22 percent in the 40-year-old and up age group.

The number of fatalities in motorcycle riders age 50 and older increased 22 percent between 2008 and 2017. The NHTSA says research suggests older riders who rode motorcycles when they were younger returned to ride motorcycles when they became middle-aged. These older riders possibly did not undergo a refresher course before returning to the open road on motorcycles equipped with more powerful and larger engines.

Total Loss

If the insurance company declares that the bike is a total loss, this means that the carrier will pay off the motorcycle loan first. After this has been covered, the remaining amount goes to the motorcycle owner.

Sometimes the loan balance on the bike is higher than what the insurance company will pay, and this situation can be very frustrating for the owner of the bike who now has nothing.  If there’s a big difference between the fair market value and what was owed on the motorcycle, the owner of the bike can sometimes end up owing the remaining amount.

How Much is a Totaled Motorcycle Worth?

Consumers whose vehicles have been totaled in accidents may be confused about how much they are owed from their insurance policies. As many consumers feel an emotional attachment to their vehicles, this attachment may also factor in their assessment of their vehicle’s value. This is especially true for motorcyclists, who often modify and customize their bikes in order to make them unique and express their individual personalities.

However, even if a motorcycle has been customized and upgraded, it is only worth what the market says it is worth. This fair market value (FMV) is what is used to determine how much an insurance company will pay to a policyholder.

Consumers who have motorcycles that are totaled in accidents are entitled to the amount that the motorcycle would have sold for on the open market. This amount may be different from the amount the consumer would ask for if they were selling it, or the amount that the consumer invested in the bike.

Are Taxes and Fees Covered by Insurance Companies?

If a motorcycle is totaled, consumers expect their insurance company to pay the entire cost to replace the damaged bike. The cost to replace a vehicle includes additional expenses, such as sales taxes and title transfer fees.

In recent years, more people have argued that even the total loss amount paid out to them under certain insurance policies have not fairly covered the cost owed. Some class action lawsuits have been filed against insurance companies on the premise that policyholders are not being reimbursed for tag transfer fees, title transfer fees, and sales tax following a car or motorcycle total loss.

The cost of these taxes and fees vary by state, but may add up to hundreds or thousands of dollars. As these costs are required in order for consumers to replace a damaged motorcycle, some consumers have successfully been able to argue in court that their insurance companies should foot the bill.

In addition to failing to factor in the costs of fees and title transfers, insurance companies may also offer low settlements in the hopes that consumers will accept their first offer in order to quickly replace their vehicle after their motorcycle is totaled. If your insurance company has quoted you an actual cash value amount for your motorcycle that feels too low, you may be able to dispute the appraisal.

If you think you didn’t get a fair total loss settlement for motorcycle or vehicle, you may be eligible to seek compensation from your insurance company, and an experienced attorney may be able to help. These lawyers have the knowledge and experience to evaluate your situation and determine if you are eligible for legal action. A successful total loss class action lawsuit could help recover money owed to policy holders, especially if they were not paid sales tax, title transfer fees, tag transfer fees, and other costs as a part of their settlement.

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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