How to Get Compensation for a Totaled Vehicle After a Bad Accident

Key Points:

  • The cost to repair vehicle damage can be recovered from an at-fault driver or their insurance company or from your own insurance company if you have collision coverage.
  • Auto insurance companies often determine a car’s worth based on its cash value according to car sales platforms, like Kelley Blue Book, Edmunds, or Autotrader. 
  • Additional damages for personal injuries suffered in a car accident can be recovered from the bodily injury portions of an insurance policy.

What Does it Mean for a Vehicle to be Totaled?

A vehicle is considered “totaled” when the cost of repairs exceeds a certain percentage of the vehicle’s actual cash value (ACV). This percentage can vary depending on insurance companies and local regulations. If an insurance company determines that a vehicle is totaled after an accident or other event, they’ll typically pay the owner the ACV of the vehicle (minus any deductible) rather than paying for repairs. The insurance company then typically takes possession of the totaled vehicle and may sell it as salvage.

Signs Your Vehicle Might Be Totaled After an Accident

While the official determination of a vehicle being “totaled” is made by an insurance adjuster, here are some signs that a vehicle might be totaled after a car accident:

Significant Structural Damage

Damage to the vehicle’s frame or unibody can be costly to repair. If the structural integrity is compromised, it’s often safer and more cost-effective to replace the vehicle than to repair it.

Airbags Deployed

Airbag replacement can be expensive. If multiple airbags have deployed, the costs can add up quickly.

High Repair Costs Relative to Vehicle’s Value

If repair estimates approach or exceed the vehicle’s actual cash value (ACV), it’s a strong indication that the car might be totaled.

Damaged Engine or Transmission

Serious damage to major components can lead to repair costs that exceed the vehicle’s worth.

Submersion in Water

If a car is submerged, especially in saltwater, it may suffer extensive electrical and mechanical damage, making it a total loss.

Fire Damage

A vehicle that’s been significantly damaged by fire, especially in the engine or cabin area, is often considered totaled due to the extent of the damage and potential safety concerns.

Irreparable Cosmetic Damage

Sometimes, extensive damage to the car’s exterior might make it uneconomical to repair, even if the car’s vital systems are intact.

Age and Condition of the Vehicle

Older vehicles with higher mileage might be deemed totaled with less damage, simply because their pre-accident value is lower.

Overlapping Damage

If the car has been damaged in multiple places, the combination of repairs might render the vehicle a total loss.

Safety Concerns

Even if repairs might seem feasible, if there’s any doubt about the vehicle’s safety post-repair, it could be considered a total loss.

It’s important to note that just because a vehicle has significant damage doesn’t automatically mean it will be declared totaled. The decision often comes down to the ratio of repair cost to the vehicle’s actual cash value, combined with considerations about safety and future reliability.

Does a Vehicle Being Totaled Indicate the Severity of a Car Accident?

While severe accidents can result in vehicles being totaled, the extent of damage isn’t the sole determining factor. A vehicle’s age and market value, the cost of repairs, underlying safety concerns, and the nature of damage all play pivotal roles. For instance, an older car with minimal value might be deemed totaled even after a minor accident due to high repair costs or compromised safety systems. Conversely, newer cars with expensive technological components can be declared a total loss from damage that seems superficial. Ultimately, totaling a car often boils down to the economics of repair versus replacement and concerns about the vehicle’s future safety and reliability.

How to Handle Your Vehicle’s Title After It’s Totaled in an Accident

When a vehicle is totaled in a car accident, the title must be processed to reflect its changed status. Here’s a general overview of what typically happens with the title:

  1. Salvage Title Issuance: Once a vehicle is declared totaled by the insurance company, the original title often needs to be surrendered and replaced with a salvage title. A salvage title indicates that the vehicle has been damaged to the point where repairs would exceed a significant portion of its pre-accident value. The exact criteria for a salvage designation can vary by state or region.
  2. Insurance Company Acquisition: If the insurance company pays out the Actual Cash Value (ACV) for the totaled vehicle and the owner doesn’t opt to retain it, the title is usually transferred to the insurance company. The insurance company may then sell the vehicle at a salvage auction.
  3. Owner Retention: If the vehicle owner decides to keep the totaled vehicle (e.g., to make repairs or sell it for parts), they’ll typically need to get the salvage title. Once repairs are made and the vehicle is deemed roadworthy again (which often requires an inspection), the owner can apply for a rebuilt or reconstructed title, allowing the vehicle to be registered and driven on public roads.
  4. Notification to the DMV: After an accident and the vehicle is declared totaled, it’s usually necessary to notify the Department of Motor Vehicles (DMV) or the equivalent agency in your jurisdiction about the change in vehicle status. The specific process and paperwork can vary by location.
  5. Loans and Liens: If there’s an outstanding loan on the vehicle, the lienholder’s name will be on the title. Any insurance payout might first go towards settling the loan. Only once the loan is paid off can the title be transferred or changed to a salvage title.
  6. Future Sales: Vehicles with a salvage or rebuilt title typically have a lower resale value, and potential buyers must be informed of the vehicle’s history. Some states have disclosure requirements to ensure buyers are aware they’re purchasing a vehicle with such a title.

It’s crucial to follow your jurisdiction’s specific guidelines and regulations concerning totaled vehicles, as processes and requirements can differ.

How Do Auto Insurance Companies Determine a Vehicle’s Pre-Accident Value?

Auto insurance companies determine the pre-accident value of a totaled vehicle by assessing its Actual Cash Value (ACV). They often consult industry-standard valuation guides like Kelley Blue Book, NADA, and Edmunds to get a base value. Local market sales listings also offer insights into regional vehicle prices and preferences. Additionally, a vehicle’s history, obtained from services like CARFAX or AutoCheck, can influence its valuation by highlighting previous accidents or maintenance records. Insurance adjusters perform direct inspections to gauge a vehicle’s condition and may even utilize specialized software that pulls comprehensive data to estimate the ACV. Policyholders can also contribute by presenting documentation of significant recent expenditures on the vehicle that might boost its pre-accident value.

Understanding Insurance Coverage for Vehicle Damage Recovery

If you are involved in an accident and another driver was responsible, then it’s crucial to know what property damage liability coverage the other driver had at the time of the accident. The adjuster handling the claim can mail or email you the at-fault driver’s policy declarations page, which will state the amount of property and bodily injury coverage that driver has.

Property damage insurance covers the vehicle and other property damage that is caused by the at-fault driver. If the at-fault driver is not insured, has minimal insurance, or his or her insurance company it takes a long time t process the claim, you may make a property damage claim through your own insurance company – but you will usually have to pay a deductible.

Georgia’s Minimum Auto Insurance Coverage Law

Drivers in Georgia are required to carry minimum auto insurance coverages as follows:

  • A minimum of $25,000 bodily injury liability per person and $50,000 per accident.
  • A minimum of $25,000 in property damage liability and $50,000 per accident.
  • Uninsured motorist bodily injury liability minimum of $25,000 per person and $50,000 per accident.
  • Uninsured motorist property damage coverage of $25,000 with a deductible range between $250 and 1,000.

Driving without the necessary insurance coverage is against Georgia law and can result in criminal charges.

How Auto Insurance Companies Value Totaled Vehicles

Determining Actual Cash Value (ACV)

One of the primary methods auto insurance companies use to value totaled vehicles is by determining its Actual Cash Value (ACV). The ACV represents the market value of the vehicle just before the accident. To ascertain this value, insurance adjusters consider various factors, including the vehicle’s age, mileage, overall condition, and any recent upgrades or modifications. They also reference industry standard databases and tools that provide pricing details for similar vehicles in comparable conditions, factoring in geographical variations and recent market trends.

Factoring in Deductibles and Policy Limits

Once the ACV is established, other considerations come into play. The vehicle owner’s deductible is subtracted from the ACV to determine the final payout. For instance, if a vehicle has an ACV of $10,000 and the owner has a $1,000 deductible, the insurance payout would be $9,000. Additionally, if the policy has specific limits or caps on payouts for totaled vehicles, those would also affect the final amount. It’s crucial for policyholders to be aware of these limits when purchasing auto insurance to ensure they have adequate coverage for their vehicle’s value.

Salvage Value Consideration

If a vehicle owner chooses to retain a totaled car, the insurance company will account for the vehicle’s salvage value — the amount the car might fetch if sold to a salvage yard. This value is then subtracted from the determined ACV. By doing this, insurance companies avoid overcompensating the policyholder since they would receive both the insurance payout and retain the salvaged vehicle, which still holds some residual value. The process of determining salvage value involves understanding the current demand for parts of that particular vehicle make and model and estimating the potential resale value in the salvage market.

Is It Possible to Get More Than Cash Value for a Totaled Vehicle?

Usually not from the property damage portion of either the at-fault driver’s or your own insurance policy. However, in certain limited circumstances you may also be able to recover damages for loss of use of a vehicle and for the contents of your car or truck, if damaged. Additionally, if your car is totaled in an accident and you were injured, you may also be entitled to recover economic and non-economic damages in a separate bodily injury or personal injury settlement.

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What Happens If Your Vehicle Was More Valuable Than the Other Driver’s Policy Limit?

Vehicles are becoming more expensive and valuable, and policy limits aren’t increasing to match the growing vehicle costs. Additionally, and unfortunately, Georgia has many careless and thoughtless drivers who are illegally driving without insurance. For these reasons, we recommend that you obtain “add-on” underinsured motorist coverage in the amount at least as much as the value of your car.

When you hold this type of insurance, it will be there to cover you if you still have remaining costs that go above and beyond the other driver’s policy limits.

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