We often build our modern lives around the automobile. Las Vegans depend on cars to get to work, go to the grocery store, and visit acquaintances.
However, the convenience of owning and driving a car comes at a cost. Tens of thousands of Americans die or suffer injuries in car accidents every year. Car accidents also cause severe economic damage, one frequent component of which is the cost of repairing or replacing a damaged car.
Those costs have escalated enormously as cars have become ever more complicated, with more powerful onboard computers, crash prevention cameras and sensors, and so forth. Gone are the days when you could just pull an old bumper or fender off a junkyard Buick and replace a damaged one yourself to save some money. Today’s cars require proprietary parts and skilled technicians to install and calibrate the sensors in what was once a simple bumper—or the safety features they contain might fail and endanger you and others.
In everyday speech, we often refer to a car that has sustained severe, unrepairable damage in an accident as totaled. However, in the insurance world, a totaled car is more than just another way to say damaged beyond repair.
In fact, when it comes to your auto insurance, not every badly damaged car is considered totaled, and not every car deemed totaled will be badly damaged.
So when exactly is a car considered totaled? Let’s take a closer look.
Definition of “Totaled” or “Total Loss”
To start, the popular conception of totaled as referring to a car so badly damaged that it can’t be repaired or driven is certainly accurate. It’s just not complete.
The formal definition of totaled—that is, the definition used by insurance companies in deciding what to pay a car owner for a damaged car—has a lot more to it.
Insurance companies define a totaled car as one for which the cost of repairs plus salvage value (what you could get for it at a junkyard, essentially) exceeds the cash value of the car in working condition. Insurance companies also sometimes call this a “total loss.”
Damage that makes a car undrivable and unrepairable will virtually always qualify as a total loss. But that doesn’t have to be the case for an insurance company to deem a car totaled.
For example, a highway pileup may tear a car’s entire front end off. The cost of replacing the front-end, engine, and other systems in that car might amount to $10,000. If the car’s value is only $8,000, then there’s no financial sense in repairing it. An insurance company would call this car totaled, even if it’s repairable.
Let’s look at another example. Suppose an older car with a market value of $2,000 sustains $3,000 in mostly cosmetic body damage. You can still drive it, and it works just fine. However, because the repair cost exceeds the car’s cash value, an insurance company could deem it totaled.
And that’s not all. In some states, the repair cost actually does not have to exceed the car’s value for an insurance company to consider the car totaled. In Nevada, for example, repair costs need only amount to 65 percent of the car’s value for insurance companies to treat the vehicle as a total loss.
In short, what we think of as a totaled car differs substantially from what an insurance company treats as a totaled car.
It’s Possible to Repair a Totaled Car…
A totaled car is not necessarily an unrepairable car. An insurance company labels a car a “total loss” because repairing the car makes no economic sense according to a mathematical formula the insurance company uses to compare repair cost and car value.
Some cars, however, are worth more to their owners than a mathematical calculation might suggest. For instance, a car may have such a low cash value (because of its age or high mileage) that repairing it still constitutes the cheapest option for its owner, if the alternative is going through the hassle of finding and buying a comparable vehicle.
Some car owners also have a sentimental attachment to an automobile and see the repairs as worth it despite the outsized cost.
But It May Have Insurance and Title Implications.
Car owners who wish to keep and repair a car that an insurance company deems totaled can ask the insurance company to pay for the repairs. The insurance company may agree, but only up to a point.
Typically, an insurance company that allows a driver to keep and repair a totaled car will pay only the repair cost, less the car’s salvage value, up to the cash value of the car in working condition. The owner pays the remainder of the repair cost.
An insurance company’s decision to deem a car totaled may make the car subject to state laws concerning a salvage title. Generally speaking, a salvage title is a specially marked title certificate indicating that the car has been deemed a total loss. States often require salvage title vehicles to pass special inspections before drivers can register them.
Insurance premiums on a salvage title vehicle may also be higher than for a comparable vehicle that has not been deemed totaled.
Totaled Cars: How Lawyers Can Help
Owners of cars damaged in accidents may find they need advice and assistance in obtaining full payment for the repair or replacement cost of their vehicle.
An experienced car accident lawyer can help, for instance, when:
- The insurance company refuses to deem your vehicle a total loss and will not pay you the full replacement or repair cost;
- The insurance company deems your vehicle a total loss but you disagree with its determination of the repair costs, salvage value, or cash value;
- You receive money from the insurance company to repair your totaled vehicle but it’s not enough to pay for the full repair, and you think the at-fault party in your car accident should pay the rest.
You do not have to accept the insurance company’s decisions about whether your car can be considered totaled.
Contact an experienced car accident lawyer today to learn more about your rights after your car sustains damage in an accident. A skilled lawyer can assist you in obtaining the compensation you deserve for your car’s repair or replacement costs, and for any other injuries and losses you may have suffered.