You were just in a major accident. Both you and the other driver have a few bruises and aches, but thankfully you are okay. Your car, on the other hand, can’t move without a tow truck. Even then, some pieces have to be scraped off the road. After your initial shock, you face the reality that your car is totaled.
Or is it?
The term “totaled” is both well-defined and ambiguous. You might believe that any and all repairs can be made to your vehicle, especially to one you are attached to. As such, you may not define your car as totaled even if it will cost thousands of dollars to fix.
However, the auto insurance industry can give you a definitive answer and confirm your vehicle’s totaled status. Find out how they quantify this below.
What Totaled Means
To your auto insurer, a total loss vehicle is one that cannot be repaired safely or cost-effectively. To be considered cost-effective, estimated repairs cannot exceed the vehicle’s value. If they do, your insurer will deem the car as a total loss.
However, to arrive at this conclusion, your insurance agent needs to calculate the value of your vehicle as well as the estimated repairs. These estimates can be highly variable.
Typically, if repairs are estimated to be between 50 to 100 percent of the car’s value, the vehicle will be considered a total loss.
Different states vary in their rules about this value. For example, in Alabama, damages must cost 75 percent of the value for a car to be considered a total loss. On the other hand, Colorado specifies that repairs costs must exceed 100 percent of the fair market price of the vehicle in order to consider it a total loss.
The Total Loss Value
When determining if a damaged automobile fits the description of a total loss, insurance agents must calculate the total loss value or the actual cash value. The exact method of finding out this amount is dependent on your insurer and the state you live in. Thus, it can fluctuate from insurer to insurer.
While your agent’s methodology might be ambiguous, they do consider certain key factors that you can fact-check on your own. Basic details such as year, make, and model are the first things considered. Older models typically have lower values.
Mileage and normal wear and tear are also factored into the equation. Greater mileage and history of accidents, even minor ones, can greatly affect valuation.
Estimating your vehicle’s pre-accident value on your own can prepare you to negotiate if your insurer lowballs you.
This can be accomplished by conducting market research on your vehicle and using free online valuation calculators. Websites like Kelley Blue Book and National Automobile Dealers Association are great resources for determining your car’s pre-accident value.
Moreover, you can ask several local mechanics for their opinions on your car. Some might conclude that your car is not worth fixing due to the significant amount of damage. Others might be willing to complete extensive repairs if you are willing to pay the high price point.
But above that, to avoid all this chaos, there are many options for online traffic school opening up all over the world. You can take an online traffic course from one of these best schools and make sure all this can be avoided totally.
Your Options for Dealing with a Totaled Car
After your car has been deemed a total loss, you have a few options.
Most often, auto insurance companies will buy the car from you. In this scenario, you will receive a check for the car’s pre-accident value minus your deductible. Then, your car will be sold at an auction.
However, you can forego this option and choose to keep your car. In this case, your insurer will pay you the cash value minus your deductible and the amount they estimate to earn at an auction. You might receive less from your insurer this way but you can make up that loss and then some by taking selling it yourself.
Keeping your vehicle can be a good idea financially if you are able to either:
- Get a good deal selling your car, or
- Scrap parts and make a profit, or
- A mechanic is able to safely repair it.
Before making the decision to keep your vehicle rather than sell it to your insurer, it is imperative that you do your research about your car’s worth and get estimates from mechanics to see if your car is even fixable.
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