Most of us rely on our vehicles to get to work, take our children to daycare or school events, bring us to family gatherings, and more. When you are in a car accident, and your vehicle is seriously damaged, it can be stressful, even if you are thankful to be safe. Your insurance adjuster will calculate whether it is cost-effective to have your car fixed or if it should be totaled. You may decide to keep the vehicle after it has been totaled, but it is not a worthwhile option for most people due to the cost and hassle. But it is still wise to research the value of your car to ensure that your insurance is reimbursing you fairly, especially if you still owe money on it. You should also take other steps after your car has been totaled to ensure you can promptly get a new vehicle and return to your everyday travels.
How Does Your Insurance Decide When a Car Should Be Totaled?
Every state has its own threshold for the amount of damage required to total a car. In Colorado, your insurance will total your car if the cost of repairing it plus the salvage value is equal to or greater than its actual cash value (ACV). The ACV does not equal how much you originally paid for the car. It is how much your vehicle was worth right before the accident and factors in depreciation, make, model, and age. The salvage value is how much it is worth after sustaining the damages in the accident. If the insurance adjuster decides to total your car and your loss is covered, your insurance will pay you the amount of the ACV minus your deductible. If you purchase a new vehicle to replace the totaled one, your insurance will also cover the taxes and title costs.
If you owe money on the totaled vehicle, the insurance company will pay off the loan first, and you will get any remaining amount. If you owe more than the ACV, you may be responsible for paying the balance unless you have gap coverage to protect you.
What Steps Should You Take if Your Car Has Been Totaled?
You need to take many actions if your car has been totaled so you can get back on the road again. These include:
- File a claim with your insurance or the at-fault driver’s insurance.
- Have your vehicle towed to a trusted body shop to get an estimate of the repair costs for the insurance adjuster.
- Provide your insurance company with the vehicle’s title and sales receipt.
- Research your car’s ACV to ensure the amount the insurance company offers you is fair.
- If applicable, know the cost of paying off any leases or loans so you can estimate the amount you will receive or owe after the car is totaled.
- Shop for a new car, keeping in mind that you must request reimbursement for it within 30 days of your purchase.
Which Coverage Should You Use When Making a Claim for a Totaled Vehicle?
Depending on the circumstances of your accident, you may file a different type of claim for your totaled vehicle. You would file using your collision insurance if the accident was your fault. If someone else was at-fault for the accident, you would file the claim against the at-fault driver’s collision insurance. If your car was totaled due to hail damage, flooding, another weather-related event, or vandalism, then you would use your comprehensive auto insurance or possibly your property damage liability insurance. If you are uncertain whether to accept your insurance’s offer for your totaled car or if you are unsure how to file the claim, an experienced personal injury attorney can assist you and ensure that you are treated fairly.