What’s Total Loss and How to Total Your Car for Insurance
By Ross Cellino
Insurance companies use the term “totaled” car to refer to “total loss” and means that the cost for reparation of the vehicle is higher than the actual value of the car (or that the car is not repairable). This is important after an accident, because it may require more work when seeking the compensation claim.
If you were injured in an accident that wasn’t your fault, you’ll have to file a compensation claim with the liable driver’s insurance company. To understand the legal terms better and to file the claim correctly, consult with a New York car accident attorney.
How To Know If Your Car Is “Totaled”?
When your car gets damaged in a car accident and the damage is so big that repairing will cost more than the car’s value, it means that your car is totaled. When the insurance company considers the vehicle to be a “total loss”, then it should pay you for the replacement value of your car.
A vehicle doesn’t need to seem entirely destroyed to be totaled. In some cases, the damage is not visible on the outside. To know this for sure, the insurance claims adjuster will inspect your car and evaluate the damages.
This will happen after you file your insurance claim. You will learn whether your car is a total loss after the assessment.
What Happens After The Car is Considered a Total Loss?
According to New York Compensation Codes R. & Regs., tit. 11, § 216.7(c)(8) (1982) (Regulation 64) the amount for physical damage total loss may be either of:
- the original car’s “actual cash value”
- a specified dollar amount stated in the policy.
“Actual cash value” unless otherwise defined by law or policy, means that the lesser of the amounts which the claimant can reasonably be expected to repair the vehicle to its condition before the loss replace the property with an item identical to the damaged one.
Replacement Vehicle Method
This method is used so the insurer can replace the totaled car. They should consider taxes, licensing fees, and other costs related to ownership.
The replacement must be in good condition and comparable to the totaled car (model, year, mileage, body style). The replacement must be available for inspection by you within fifty miles of your home unless you agree to a further distance. And finally, it should be purchased from a licensed dealer.
Cash Equivalent Method
In some cases instead of replacing the vehicle, the insurance company may choose to pay a cash equivalent of the car’s cost. The cost is calculated based on the vehicle before the accident.
If in thirty days you find a replacement car that is higher in cost than the cash claim you got, the insurance should make up for the difference. They will either pay you the difference or find a cheaper car.
Will My Insurance Company Offer a Settlement for a New Car?
You have the option to turn to your own insurance if your car was damaged in a collision.
However, it’s a better (and more popular) option to turn to the liable driver’s insurance company first. If they offer you a low settlement and refuse to negotiate, you can turn to your own insurers.
You have the right to choose to keep your car after it was totaled, but keeping it may affect the decision of the insurance company to pay you. In most cases, it’s better to give up on the totaled car and seek a compensation claim for it.
Insurance companies aren’t working in your best interest. Even if they decide to pay you the costs for a new car, you can’t be sure that they offer a fair evaluation. Keep in mind that they would work dedicatedly to prove that you’re accountable, which is why a car accident attorney would be of great help.
Get a Lawyer
Even if your car seems well, but it is totaled, don’t rush to keep the car, because later it may show that it’s in a poor condition. If that happens the insurance company will surely not be eager to pay you at all.
They will help you file the claim, and advise you whether to accept the settlement or negotiate for a higher settlement.
Our goal is to help you get your deserved compensation for the accident you aren’t at fault.
Contact our office and let our team evaluate your case entirely free of charge.
Content checked by the personal injury attorney Ross Cellino
Ross Cellino
As a family man and a trial attorney, I pride myself on winning cases and serving the community. With over 35 years of experience, I understand the function of a jury, how juries arrive at conclusions, and the role that the jury plays in administering justice. I know how to win cases. You can find us in Manhattan, Buffalo, Melville, Rochester, Brooklyn, The Bronx, Queens and other locations throughout New York.
