My Car Was Totaled, Now What?

When it comes to our cars, it’s not hard to build an emotional attachment because they become more than just vehicles to carry us from one location to another. Over the years, they can be with us during the finest moments…as well as the toughest ones. Therefore, when it’s involved in an accident and ‘totaled’, it can be a difficult process.

Often, people ask whether they can keep their car, what the insurance company will pay, and whether repairs can be sought at any repair shop. Today, we’re going to answer these questions and provide you with the information you need to make the right decision.

What Does ‘Totaled’ Mean?

When the term ‘totaled’ is used, people often think of their cars being wrecked from front to back; they picture wheels hanging off in all directions and the car unrecognisable from its original condition. However, this doesn’t have to be the case because the term actually applies to any case where the cost of repairs is higher than the value of the car.

Before declaring a total loss, insurance companies will consider a number of factors. Firstly, they’ll assess the Actual Cash Value (ACV) of your car which considers mileage, overall condition, and more. For more detail, they could consult the National Automobile Dealer Association and even Kelly Blue Book just to get an idea of the car’s value. From here, the provider will consider the average cost of repairs. If it the cost of repair is higher than the ACV, it would be declared a total loss. For this reason, small accidents and minor damage will be all it takes for older models to be ‘totaled’.

Secondly, the insurance company will consider whether the car can be repaired to a ‘safe’ standard. Of course, cost is important but they also need to know that you’ll be safe in whatever state the car is in after repairs. If, regardless of cost, there’s no opportunity to return the car to a safe standard, it will automatically be considered a total loss.

Thirdly, they must also consider state laws; while both cost and safety standards are important, they are still governed by state laws and will never make decisions that go against them.

My Car Is Totaled, What Will I Be Paid?

One of the biggest misconceptions with this scenario is that there’s a fixed fee that insurers will pay per model, year, or any other parameter. If your car has been totaled, the most important thing to remember is that there’s no concrete number that the adjuster will suggest. Just because a family member had the same car or it was made in the same year, this doesn’t mean your insurance company will pay you the same amount as them.

First and foremost, it’s important to remember the role of the insurance company; to provide you with a similar replacement should something happen to your vehicle. Now ‘something’ has happened, they need to provide an amount similar to what you’ve lost. Therefore, the adjuster will consider the ACV, mileage, condition, pre-accident damage, similar cars listed in the area, and more. Depending on your policy, there may also be an insurance deductible which reduces the amount you receive.

As mentioned, the price the company quotes isn’t pulled from a magic book with set prices for all circumstances so there could even be room for negotiation. If you think they haven’t considered an upgraded transmission, or perhaps a brand-new stereo, you’re welcome to discuss the issue with them. In normal circumstances, the insurance provider gets a salvage value so upgrades would increase the amount they receive. Alternatively, you might find there’s a real demand for your model in the area; as long as you can find evidence of similar cars for sale at a higher price, this could motivate the provider to compensate more.

If you don’t accept the amount they’ve quoted, and they’re not willing to negotiate, but you feel as though you have reason to require more money, your solution here would be to contact a professional and reliable law firm.

My Car Was A Total Loss, Is the Insurance Company Responsible for Paying the Total Car Value?

If you agree to the compensation and value they suggest, you’ll be paid this amount minus any deductibles as well as any fees. If the vehicle is yours and you have full ownership, the rest of this amount will be sent to you. If you’ve been leasing the car, or it’s on finance, things are a little trickier because the leasing company has priority.

For example, let’s say the ACV has been set at $8,000 with a $1,000 deductible; there’s also an outstanding loan amount of $1,400. Once the deductible has been removed and the leasing company has been paid up, the individual would receive $5,600 ($8,000 - $1,000 - $1,400). However, if the outstanding loan amount was $10,000, the individual would still owe money even after the insurance company has paid out. For these circumstances, there could be an opportunity to take advantage of ‘Gap Coverage’ (also known as Loan and Lease Coverage). If this wasn’t on your policy before the total loss, we recommend contacting a law firm to assess your options.

Do I Get Paid for Loss of Use?

Although all policies are different these days, most will have a feature that protects the policyholder against ‘loss of use’. After an accident and your car has been totaled, you no longer have a vehicle and this can come at a cost to both your personal and professional life. This being said, loss of use is much easier to claim in some cases than others.

For example, it’s generally easy to claim loss of use when you aren’t at fault for your own vehicle being considered a total loss. If you were hit by a car that skipped a red light, you’re the innocent party and loss of use should be considered in your case as you file against the third party. If it’s a first-party claim, loss of use may be covered in a rental but it can be more difficult in your own vehicle where the damage was caused by your own negligence or failings.

Can I Keep My Car Even If It Was Totaled?

As discussed previously, we can all build close relationships with our cars and this makes it hard when they’re damaged and potentially come to the end of the road (excuse the pun!). If you can’t let go of your vehicle, perhaps you have an emotional attachment of some kind, you do have the option of keeping it. If you have too many memories with the car, you’ll receive whatever balance is left over once the salvage value and deductibles have been taken from the ACV.

Of course, the insurance company still has a responsibility to make sure you aren’t going to take a potentially dangerous vehicle onto the road. With this in mind, your car will be given a ‘salvage title’ which tells everybody the car isn’t safe for use. If you decide to sell the car in the future, this will need to be declared so all prospective buyers are aware. In addition to this, if you decide to repair the car (more on this in the next section), many providers will not want to insure because the car has previously had the salvage title.

Before making any decisions, we recommend having a discussion with the insurance company so you understand all the permutations of keeping the car after a total loss. If the damage isn’t so severe, you might be able to convince them to avoid the salvage title once you’ve given significant proof the car is once again safe to be driven on the road. This will be much easier in minor scrapes and with accidents that have led to largely superficial damage. Above all else, the way forward is a simple conversation with the insurance company because they might just work with you.

Can I Get My Car Repaired at Any Body Shop?

If you decide to keep your vehicle and get it repaired, the next question will be your choice of repair shop. Do you have to visit the body shop the insurance company suggests? In short, the answer to this question would be ‘no’.

With the very best insurance companies, they’ll have several contracts with local repair and body shops so it is worth considering these. However, they might not offer the service you need or you might have a fantastic relationship with another body shop. Either way, by law, the decision of where to get your car repaired is entirely up to you; we should note that this applies when the vehicle is owned by yourself (the story will be different when you aren’t the owner).

These days, most insurance companies will recommend repair shops and this means they’ve negotiated lower prices for labor and materials. The repair shop will have been assessed by the company and they would have passed all sorts of safety standards and regulations; they will also have the best possible equipment, training, and warranties. For the representatives of insurance companies, they have targets and will try to get a certain percentage of customers to choose their specific shops.

When you first tell the company you have your own choice, they’ll try to dissuade you from this decision while warning that the claims process won’t be as efficient because the shop isn’t on their magic list. From here, they’ll explain that it may take up to seven days just for an adjuster to write an estimate; some will even say that the repairs won’t have a warranty because you haven’t chosen one of their shops.

If you hear any of this, don’t feel intimidated because all good reputable body repair shops should be offering a lifetime warranty anyway (regardless of whether the money is coming from the owner or an insurance company). What’s more, your own shop is likely to have dealt with insurance companies before so will know how it all works and how to keep you in a strong position. Ultimately, you need to choose a shop in which you feel confident. If you don’t know any reputable shops, feel free to choose the one recommended. Otherwise, make sure you ask some important questions about their experience, warranty, pricing, etc.

Summary

There we have it, a complete guide to what you can and can’t do after your car has been totaled. Now, you should know what you’ll be paid, where you can get the car repaired, whether loss of use is paid, and more. If ever you need help claiming or filing a case, be sure to get in contact with the professionals at The Injury Firm. Through the process, they’ll know the correct steps to take and how you can maximize the compensation you receive!