What if My Car Is Totaled in the Accident?

If your car is in total loss in a car crash, you can contact your insurance company. After this, your insurance provider will assess the actual value of your car and then compensate you by subtracting the deductible if you have the right coverage.

Furthermore, remove all personal belongings from your car and erase any personal data from your navigation and phone systems. Remove license plates. Hand over your car title and keys to the insurance company. And be prepared to sign a document acknowledging their right to take the vehicle.

However, if you can’t find your car title and keys, contact your local DMV. While your insurance company figures out your car’s value and repair costs, talk to your lender (if you have one) about the damage. Thus, once you settle your claim, the compensation goes to your lender.Dealing with a total loss can be stressful. Uptown Injury Law, PLLC, is here to guide you through the insurance claim process for your totaled vehicle. Call us at 917-540-8728 toll-free to set up a free case review and ensure you get the compensation you deserve.

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What Is Meant by a “Totaled Car” or a “Total Loss”?

Insurance companies use this term when the expected repair costs are higher than the car’s actual value after a car crash. And when your insurance adjuster can’t fix the car to meet safety standards.

Every state has different rules to determine if a car is a total loss. These rules typically include:

  • The car’s market value before the accident.
  • Comparison of the repair cost to the pre-accident value (often following a specific formula).

For instance, New York has a 75% or higher threshold for market value. However, the other states can have the same threshold, or it can be different, such as Nevada has 65%.

What Factors Are Used to Calculate the Car’s Value in New York?

In New York, if the cost to fix your car is more than 75%, insurance companies consider it a total loss. Whether you’re dealing with your own insurance or the other driver’s insurance company, insurance providers will figure out your car’s value using factors like:

  • The year of the vehicle
  • Make and model
  • Mileage
  • Options package
  • Dealer add-ons
  • Any enhancements or upgrades
  • History of past claims or repairs

The way insurance agents calculate this value can vary. Sometimes, they compare similar cars. New York law also allows insurance providers to include your car’s sales tax in the offer. Therefore, talking to your lawyer can help you get a fair settlement for the total loss vehicle.

What Is the Total Loss Formula?

The total loss formula is the calculation used to determine whether the cost of repairing a damaged vehicle exceeds its actual cash value (ACV), leading to a declaration of total loss.

The standard Total Loss Formula is as follows:

Total Loss Formula: Repair Cost>Actual Cash Value×Total Loss Threshold

Here, the “Repair Cost” is the estimated cost of repairing the damaged vehicle, the “Actual Cash Value” is the fair market value of the vehicle before the accident, and the “Total Loss Threshold” is a percentage (usually ranging from 50% to 75%) set by the insurance company.

If the repair cost exceeds the product of the actual cash value and the total loss threshold, the vehicle is declared a total loss. For example, if a car has a cash value of $10,000 and the insurance company’s total loss threshold is 70%, the vehicle would be declared a total loss if the estimated repair cost exceeds $10,000 * 0.70 = $7,000.

However, specific insurance companies may vary their total loss formulas, and regulations can vary by jurisdiction. It’s crucial to refer to your insurance policy and the terms and conditions provided by your insurance company to understand if they have the same formula or use a different one.

What Steps Should I Take if My Car Is in Total Loss in an Accident?

When dealing with a total loss accident, it’s crucial to prioritize your physical health and well-being first. Once you’ve addressed your immediate medical needs, here are the steps to follow:

Step 1: File an Insurance Claim

Contact your insurance adjuster to file an insurance claim ASAP. Total loss claims can be time-consuming, so quick reporting is essential. If another driver was involved, report the accident to your insurer and the other driver’s insurer.

Step 2: Choose an Approved Auto Repair Shop

You can tow your car to an auto shop, but selecting one approved by your insurance adjuster is advisable. The approved shop will assess the repair costs, and the adjuster will determine whether the car is a total loss.

Step 3: Gather Necessary Documents

Prepare the required paperwork, including your car’s title. If you don’t have the car title and keys, you can contact your state’s Department of Motor Vehicles (DMV). In case your car is at a total loss, prepare yourself to sign over the car title to the insurance company.

Step 4: Research Your Car’s Actual Cash Value (ACV)

Before accepting any insurance payment for your totaled car, do your own research on its ACV. Explore auto websites, check local newspapers, and visit nearby car dealerships to understand the current market value for vehicles similar to yours.

Step 5: Review Your Car Loan

Determine any balance on your car loan if you have financed your car. The insurer will settle the loan with your lender, and you will receive the remaining funds.

How Much Will My Insurance Cover for a Totaled Car?

Each type of insurance coverage, whether liability, collision, comprehensive, or underinsured motorist coverage, comes with its policy limits. These limits represent the maximum payout your insurance provider will pay for a single claim or accident.

For instance, in a collision, your car is declared a total loss with an actual cash value (ACV) of $35,000. However, the at-fault driver’s car insurance policy only covers $20,000 in property liability. In this case, their insurer will cover just $20,000 of your total loss settlement. You must rely on your collision or underinsured motorist coverage to recover the remaining $15,000 of your car’s ACV.

Additionally, you have the option to decline the insurance company’s offer for a totaled vehicle if it doesn’t cover your repair costs. You can engage in negotiations and present a counteroffer based on factors such as your vehicle’s model, make, and mileage.

You can also conduct online research and visit car lots to check the exact vehicle as yours to determine the repair costs of your vehicle. It’s also beneficial to consult with dealerships offering similar car options to yours.

Moreover, exploring alternative resources like Kelly Blue Book can provide an accurate valuation of your car. If you’ve made upgrades to your vehicle, such as installing new tires, mirrors, or seating. You can present receipts and documentation to support your case for a higher settlement amount from the insurer.

Uptown Injury New York car accident attorneys can assist you in filing your claim and make the process hassle-free. You don’t need to deal with the insurance company or go to court. Our experienced lawyers can handle this on your behalf. Feel free to contact us to discuss your case in a complimentary consultation.

Who is Responsible for Covering the Costs of a Totaled Car?

It’s crucial to have a clear grasp of who is responsible for covering the cost of a totaled car. Therefore, look into some situations to know who foots the bill for a vehicle deemed a total loss:

  • The other driver’s or car owner’s insurer pays for your totaled car if they were at fault for the accident.
  • If valid insurance was lacking during the accident, compensation may be limited, even if it wasn’t your fault.
  • If the negligent party is uninsured or underinsured, you must rely on your collision coverage or underinsured/uninsured motorist coverage (UIM).
  • Without collision insurance, your insurer won’t reimburse you for your car’s actual cash value (ACV).
  • If you are at fault, your liability coverage pays for other people’s injuries and property damage, but you’ll need collision coverage for your totaled car.

Do I Have to Pay Any Deductible for a Totaled Car?

The answer typically depends on your insurance coverage. If you have comprehensive coverage, it includes protection for accidents that result in a total loss of vehicle. In such cases, you may be responsible for paying the deductible from $100 to $2,000 in your insurance policy. You also have to pay a deductible if you’re at fault.

However, if another party is at fault and their insurance covers the damages, you may not have to pay a deductible. Thus, communicate with your insurance adjuster to understand your coverage and any deductibles associated with a totaled car.

What Type of Insurance Coverage Can I Use for a Totaled Vehicle?

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There are several types of insurance coverage for a totaled car, depending on the cause of that loss, including:

  • Collision Coverage: This coverage applies when an accident happens with another car or object and totals your car. It includes a post, guardrail, or tree.
  • Comprehensive Coverage: You can use comprehensive coverage if factors like severe weather, vandalism, or animal collision cause a total loss of your car.
  • Property Liability Coverage: If another driver is responsible, that leads to the total loss of your car. Their property liability insurance covers your damages.
  • Underinsured/Uninsured Motorist Insurance: This coverage comes into play in cases where your car is totaled in an accident by a negligent driver having no insurance.

How Does Gap Coverage Work When Your Car Is in a Total Loss?

When your car is in a total loss in an accident, the gap coverage becomes crucial to your financial well-being. Gap coverage, referred to as “guaranteed auto protection,” bridges the financial gap of 25% between the ACV of your car and the amount you owe on your auto loan.

Your insurance company pays out the ACV of your vehicle, which may be less than the balance on your car loan. This is where gap coverage proves invaluable.

For example, if you financed a brand-new car, and shortly after driving it off the lot, it gets involved in a severe accident. In such a scenario, the insurance payout might only cover the vehicle’s depreciated value, leaving you responsible for the remaining loan balance.

In other words, if you buy a car for $20,000, but after two months of driving, its value decreases to $16,000. If you’ve been making monthly payments of $400, you now owe $2,000 more than the current value of the car.

Without gap coverage, you could find yourself in a challenging financial situation, having to pay off a loan for a car that you no longer possess. However, with gap coverage, the insurance will cover the shortfall between the ACV and the remaining loan amount. Thus providing you with peace of mind and protecting you from unexpected financial burdens.

Are You Allowed to Keep a Totaled Vehicle?

You can usually keep your totaled car, but there’s a catch. The insurance company will assess the car’s “salvage” or “junk” value. They’ll subtract this salvage value from your car’s Actual Cash Value (ACV). This means your settlement cheque will be smaller, but you’ll retain ownership of your car.

However, before deciding to keep a totaled car, it’s essential to consider the financial aspects. For instance, you’ll have to arrange for repairs, inspections, and reinsurance to get the car back on the road. 

Furthermore, some individuals opt to donate their totaled vehicles to charitable organizations in exchange for a tax deduction. To explore this option, ask your preferred charity about partnering with a car donation service or auction house. Certain state recycling programs may also list organizations that accept unwanted cars as charitable donations.

What Does It Mean by Salvage Value for a Totaled Car?

Salvage value is the estimated worth of a vehicle in its damaged state. When a car sustains massive damage due to a collision, natural disaster, or other catastrophic events, insurance companies assess the salvage value of a car. Insurance agents do this to know if it is cost-effective to repair or declare the vehicle a total loss. Additionally, they sell the vehicles at auctions to recover some costs.

The salvage value is the residual value of the car’s components and materials that can be recovered or sold for reuse. 

For example, if a car gets damaged with a market value of $20,000 in an accident, the insurance company may assess its salvage value at $5,000. In such a case, if the cost of repairs exceeds the market value minus the salvage value, the insurer may decide to declare the car totaled and compensate you accordingly.

Secure Your Claim with Uptown Injury Car Accident Lawyer

When you’ve been involved in a car accident, securing your claim for maximum compensation can be challenging on your own. At Uptown Injury Law, PLLC, our team has more than 15 years of experience in handling car crash cases with a successful track record

We understand the complexities of these cases, from collecting evidence to dealing with insurance companies. We’re committed to ensuring you receive the compensation you deserve. What sets us apart? We work on a contingency fee basis, meaning you pay us nothing unless we win your case.

Let our experienced team fight for your rights and get the compensation you need to recover from your car accident injuries. Call us at 917-540-8728 to book a FREE consultation today!


How Do Insurance Companies Assess if a Car Is Totaled?

Insurance companies assess this by comparing the cost of repairs to the car’s pre-accident value. If the repair cost exceeds a certain percentage (usually around 70-75%) of the vehicle’s value, they declare it a total loss. They also consider factors like make, model, year, and condition of your car in this assessment. 
However, if you find your insurance adjuster downplaying this value. You may consider seeking help from a lawyer who can guide you through the whole process. 

What Is the Fair Market Value of My Car?

To find the fair market value of your car in New York City, consider factors like your car’s make, model, year, mileage, and condition. All of these factors influence its value in the local market. Moreover, you can determine this value by researching similar vehicles for sale in your area or doing online research.
For a more precise estimate, consult with local dealerships or get a professional dealer. Keep in mind that fair market value can change over time, so it’s crucial to stay updated on the current pricing trends in New York City.

Will the Insurance Company Provide a Replacement Car if My Car Is a “Total Loss”?

In many cases, insurance companies offer a replacement car if your vehicle is declared a “total loss.” This benefit typically depends on your policy and the circumstances of the accident. 
If you have rental car coverage or a similar provision in your policy, the insurance company may provide you with a temporary replacement vehicle while they settle the claim. It’s essential to review your policy and discuss it with your insurance adjuster to understand your coverage.

What if I Owe More on My Car Loan Than the Insurance Payout?

If the insurance payout is less than your car loan balance, you may be responsible for the remaining debt. Gap insurance can cover this shortfall if you have it. Otherwise, you’ll need to pay the difference out of pocket. Speak with your car accident lawyer to gain a clear understanding of your auto insurance policy.

Can I Dispute the Insurance Company’s Valuation of My Totaled Car?

Yes, you can dispute the insurance company’s valuation of your totaled car. To do so, gather evidence such as recent repair receipts, maintenance records, and lists of similar vehicles in your area to get a higher value. 
Present this information to your insurance adjuster and be prepared to negotiate. If the dispute remains unresolved, consider consulting with a car accident lawyer for guidance on how to proceed.

How Long Does It Take To Settle a Totaled Car Claim?

The time to settle a totaled car claim varies. Typically, it takes a few days to several weeks. However, it depends on factors like the complexity of the case and the insurance company’s efficiency. 
To speed up the process, ensure you provide all necessary documents and maintain open communication with your insurance adjuster. You can also consult with a car accident lawyer to help you maximize your total payout. 


Kyle Newman Founder and Senior Trial Lawyer at Uptown Injury Law New York's Best Personal Injury Medical Malpractice and Accident Law firm New York's Top Trial Lawyers
Kyle Newman Founder and Senior Trial Lawyer at Uptown Injury Law New York's Best Personal Injury Medical Malpractice and Accident Law firm New York's Top Trial Lawyers

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