January 10th, 2022|
When your car sustains damage in an accident, you’ll need to determine whether it’s a total loss. A totaled car is damaged beyond repair, affecting how you’ll handle claims with your insurance company. If the collision that damages your car also results in injuries, you should hire an attorney to fight for compensation on your behalf.
Our California car accident lawyers can help you understand your rights when dealing with your insurance company and pursue damages from a negligent driver if you are injured in a crash.
If your vehicle is wrecked in an accident that injures you, an insurance company adjuster determines if your vehicle is a total loss. There are five signs that your vehicle is a total loss to your insurance company.
1. Repairing Your Car is Not Safe
Insurance companies consider vehicles that have been entirely wrecked, destroyed, or damaged beyond repair as total losses. You may have a totaled car with exterior damage such as dents, scratches, and even broken windows.
You may also have interior damage to computer components, such as steering angle sensors, airbag control, and the park assist, making the vehicle undrivable.
2. State Laws Define Your Car as a Total Loss
According to California laws, a total loss is a wrecked vehicle whose repairs would cost more than the actual cash value of the car. A total loss is also a wrecked vehicle deemed uneconomical to repair by the insurance company.
Based on these laws, an adjuster can use the total loss formula (TLF) when determining the total loss of your car: Cost of repairs + salvage value ≥ actual cash value.
The factors that go into calculating the loss include:
- Cost to repair: The cost of repairing the vehicle and bringing it back to full functionality. The adjuster determines if the cost of repairing your car is higher or lower than its actual monetary value.
- Salvage value of the vehicle: Your vehicle’s salvage value will vary based on the extent of the damage. A car with extensive damage may not have much value apart from what the insurance company can collect for scrap metal. Less damaged cars may have more value since some parts are recoverable.
- Actual cash value (ACV): Your car’s ACV is calculated according to its age, mileage, general condition, and features.
The insurance company considers a total loss when the sum of the cost of repairs and the salvage value of the vehicle exceeds or is less than the actual cash value of the vehicle. For instance, if you hit a large truck with your car, the cost to repair could be $16,000, and the car has a salvage value of $0. Under the TLF, they considered your car totaled since it only has an ACV of $10,000.
3. The Repairs Are More Than the Car’s Value
Using the Kelley Blue Book to determine the ACV of your car, the insurance adjuster will find similar models of cars in your area and compare them to other cars in your class. They may place a low value on your car’s condition prior to the accident, which can cause your insurance to declare the total loss of your car. When the vehicle’s value is already significantly depreciated, even minor repairs can cause it to be viewed as a total loss.
4. You Have an Older Car
Your insurance adjuster will also value your car based on its age before the accident. After the first year of ownership, the value of a new car drops by over 20%. It then continues to depreciate by 10% or more every year after that. After five years, the car may be worth less than half of what you bought it for originally.
If an older car is severely damaged and has a low trade-in and resale value according to Kelley Blue Book, many insurance companies will consider it a total loss. Because of its age, it is likely going to need repairs that could exceed its worth.
5. Your Car Needs More Repairs Than Originally Discovered
Insurance companies may find it difficult to determine the extent of the damage to your car once they assess the initial damage before auto repair shops begin repairing it. If the auto repair shop discovers more damage, such as damage to the vehicle’s undercarriage, they can file a supplement with the insurance company.
When determining if they should declare a vehicle a total loss, some insurance companies consider supplements and how they affect repair costs. The insurance company can also define a car as a total loss even if the repair expenses are less than its ACV.
If you want to repair your car on your own and you were denied a supplement to help repair your vehicle, you’ll have to contend with your insurance provider. A car accident attorney can help you negotiate for a better evaluation of your vehicle’s value and the repairs your vehicle may need.
Speak to One of Our Experienced Lawyers
Before deciding whether to have your vehicle fixed after an accident or declare it a total loss, you should consult an auto accident lawyer. Your attorney can also help you pursue compensation for any injuries you sustained in the accident that damaged your vehicle.
Find out whether you can pursue economic and non-economic damages by filing a lawsuit against the negligent driver; talk to one of our lawyers today.
Contact attorneys at Berg Injury Lawyers to schedule a free initial consultation. Our No Fee Guarantee ensures you do not pay any fees until you win your case.