What Does It Mean For a Vehicle To Be Totaled By An Insurance Company
You have probably heard the phrase that a vehicle was declared totaled by an insurance company. And while it is widely believed that a total loss declaration is related to the amount of damage or how severe the collision was, vehicles can be declared a total loss due to harsh accident or even something as small as a dent. It all depends on the vehicle’s value.
Determining a Total Loss and Actual Cash Value by the Insurance Company
To determine if the vehicle is a total loss is made with a calculation of its cash value when the accident occurred. Actual cash value is done by the vehicle’s age, model, make, condition, demand, and the resale value of the parts and metal (i.e., salvage value), and finally, the potential for unseen damage. If the collision was not so harsh, the vehicle will have less unseen damage, than it could have in a major crash.
Total loss is declared if the reparation costs surpass the actual cash value. State laws vary and may require total loss even for smaller damages. If the vehicle has severe damage that cannot be repaired, then a total loss will be declared.
Auto Insurance Companies Don’t Make the Same Determination
Every auto insurance company has their own policies and criteria they will use when deciding if your car should be declared a total loss.
What is similar is that if a vehicle is declared totaled by an insurance company, it will be considered the same by another.
This is not a rule without exceptions, though (your Baton Rouge auto accident attorney will tell you everything about the exceptions).
Actual Cash Value vs. Damage
Let’s say you have a car that has a current worth of $10 000. You have struck another car that was parked and caused a $500 damage to your vehicle. Of course, the damage is not even close to the current worth of your car. You will have to check for the number of damages, or it will be repaired directly for you.
What happens if your car is cheaper ($2000, for example) and it gets damaged in flood and the damages rise up to $4000. In such cases, the amount of repairs is higher than the actual value of your car. You can expect to be declared a total loss, and you will probably be offered not more than $2000, or the price the vehicle had prior the damages.
Cash Settlements From an Insurance Company and Keeping Your Totaled Car
You can take the cash settlement from your insurers (usually not higher than the cash value of your vehicle, in case your state allows that). Your damaged vehicle will be returned to you after subtracting the salvage value of it. Then, it will be labeled as a salvaged vehicle.
Another option you can see is taking a settlement value from your auto insurers and give your totaled vehicle away. You can take a statement value (it will be determined by a vehicle valuation database). It will go directly to you if you own the car. If you have a loan, the payment will be funded to the lienholder first, and if there is some extra cash, it will be refunded to you. This is quite a popular option because people get some money this way, so they can actually buy another car, and they no longer need to worry about the damages of their old vehicle.
Things to do After a Total Loss Accident
First, clean your car and remove your things from the vehicle. Don’t forget to take out the important papers.
Then report the accident and file the claim (don’t wait till the deadline). The sooner your insurers start working on it, the better.
Take the car to a repair shop (allow your insurer to suggest their preferred shop). Most insurers have shops they work with, which means the job will be done faster.
You will have to sign a title for the insurance company.
Fill the necessary paperwork; total loss accidents need a lot of paperwork, so finishing the whole thing on time will catalyze the process.
If this process seems like something too complicated and difficult for you, hire a car accident lawyer to help you.
Our Baton Rouge car accident lawyers have worked on numerous such cases. We will represent your case, pursue the compensation you deserve and help you with all the paperwork.
Call our Louisiana personal injury law firm and schedule your consultation today.