Totaled means damage that cannot be repaired. In the case of a car, when it meets a total loss car accident, it is called as totaled. The conditions that determine your car is totaled are made by the insurance company after checking out various factors and conditions.
What happens when your car is damaged beyond repair?
In case your car insurance company determines with their factors that the car is totaled, there are various ways in which they might compensate you with the value of the car. The insurance company can compensate for the damage in various ways such as replacing the totaled car with a car which is similar in price and segment, offer the owner of the car with cash compensation after comparing the value of the comparable cars in that particular area or offer the victim a cash payout which will be based on various methods of appraisal for example Kelly Blue Book.
As soon as you take or accept the payout offered by the insurance company, the company will become the sole owner of your totaled car and will take ownership of it. In most of the cases, the damaged car is then sold to the salvage yards as scrap for selling. However, the time within which you will be receiving out your compensation amount from the insurance company might take a number of weeks to several months. This depends on the protocol system of your car insurance company. Although in most of the cases, the owners of the totaled cars opt for cash compensation, there are various allegations against the insurance companies for using unfair and unethical means for estimating the value of the damaged cars. This is done primarily to profit from the damaged car and also to give out a lower amount of cash compensation. In case you believe that your car insurance company willfully undervalued your totaled car, you can easily seek for legal lawsuit action against the company. In case you want to be in touch with a professional attorney for filing your total loss lawsuit, you can contact Shamis & Gentile, P.A.
How does your insurance company decide when your car is totaled?
In case after an accident, the cost to repair the damage of your car is equivalent to or is higher than the actual value of the car, your insurance company might decide to declare your car as totaled. Most of the insurance companies opt for actual cash value or the fair value system in the market for determining the actual value of the car. Actual cash value is the amount that your car can get when opted for selling in the open market. This amount is also referred to as the replacement cost of your car. The insurance companies use various methods for determining the value of this number like recent selling price for similar vehicles in the area, mileage of the car, existing damage and extra features as well.
Just after the company determines the actual value for your totaled car, they will get in touch with you with their claims adjuster. The claims adjuster is the one who assesses the damage done to the car and also estimates the total cost for the repairs. After estimating this number, the insurance company will be comparing the market value of your car with the cost required for the repairs and will determine whether or not your car is totaled.
What happens when the damage in the car is more than the cash value of the car?
Insurance companies will declare a car to be totaled when they find out that the damage of the car is higher than the actual cash value of the car. This percentage used for determining is called the total loss threshold. The total loss threshold is determined by the state governments. In most of the total loss threshold is about 75% of the actual cash value of the car.
Total Loss Threshold
When the repairing cost associated with the damaged car is higher than the total loss threshold, it is automatically a loss for the owner. In case the repair cost is less than the total loss threshold, the insurance company might offer the owner of the car a fixed cash payout for covering up the repairing cost of the car. In case the repair cost is more than the total loss threshold, the company will offer you with a sum of money which is to cover the replacement of your car.