What Happens if My Motorcycle Is Totaled?

When a motorcycle is totaled, it means it has been damaged to the point that it would be more economical to replace it than to repair it.

How do I know if my motorcycle has been totaled?

Determining if a motorcycle has been totaled depends on what state you are in. Different states have different rules for judging when a vehicle has been totaled.

However, in general, when repair costs are higher than 50 or 75 percent of the vehicle’s cash value, it is usually considered totaled, according to CarInsurance.com. 

What do I do if my motorcycle is totaled?

If you get into an accident and your motorcycle was damaged, the first thing to do after you tend to any injuries is to contact your insurance provider.

Your insurance provider will usually send an insurance adjuster to investigate the accident and determine what damage has been done to your motorcycle. It is the job of the insurance adjuster to determine if the vehicle is totaled, and what compensation you are entitled to receive.

How do I know I am getting compensated enough in my total loss motorcycle claim?

If you have insurance and your motorcycle is totaled, you should receive the fair value of your motorcycle.

However, some insurers may be responsible for covering costs other than just the cost of the vehicle itself. Insure.com also notes that “insurers may be responsible for other costs associated with purchasing a new vehicle, such as sales tax, title and vehicle registration.”  

Thirty-four states reportedly require insurers to pay sales tax for the replacement vehicle after a total loss claim is made. Though the tax isn’t necessarily paid up front, policyholders should know for what benefits they may be eligible and what compensation they should receive.

So, if you only received compensation for the amount your vehicle is worth, you may be stuck with paying for fees out of pocket that your insurance should have covered.

In some cases, insurance companies may not offer to pay for sales tax after your motorcycle is totaled. Many policyholders have had to take their insurance companies to court to get them to pay their full obligation.

What’s a fair value for a totaled motorcycle?

In addition to consumer allegations that some insurance companies may be purposefully avoiding paying associated costs and fees with replacing vehicles or motorcycles after total loss accidents, some consumers claim that these companies may also be routinely undervaluing their vehicles. According to some consumers who have experienced total loss motorcycle accidents, insurance companies may be frequently undervaluing their bikes in order to pay out a lower amount to the policy holder.

At least one company has been investigated due to these claims. Chicago-based CCC Information Services, a company that assesses the values of vehicles and motorcycles for insurance companies including Allstate, Commerce, Farmers, Geico, and Liberty Mutual, has been investigated by the Massachusetts Division of Insurance for allegedly falsifying vehicle damage reports in order to assign lower values to total loss vehicles.

However, this problem may not be limited to a single company. Undervaluation of vehicles and refusal by insurance companies to pay taxes and fees have been reported by consumers across the United States. These issues may disproportionately affect consumers who own motorcycles, due to the extreme damage often caused to motorcycles even in minor accidents.

As sales tax and title transfer fees may be in the range of hundreds or thousands of dollars, these costs can quickly add up for consumers who believed these costs would be covered by their insurer as part of their total loss payout. As these fees are required in order to replace a vehicle, consumers may be able to prove that their insurance company is responsible for covering the cost.

When should I file my total loss motorcycle claim?

The Balance recommends that policyholders should file an insurance claim as quickly as possible so they can get their compensation in a timely manner. This is partly because there is often a thirty day limit on how long you have to request to be reimbursed for sales tax on your vehicle. So, if you wait too long, you may be stuck with out-of-pocket costs after your motorcycle is totaled, though these costs could have been covered by insurance. 

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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