When Is A Car Totaled?
We all fear the dreaded reality that comes with driving—you can get into a crash. Whether it’s your fault or not, it is never fun to see the damage to your car. To make matters worse, your car can be totaled in the process! But, when is a car totaled? What does that even mean?
What Does ‘Totaled’ Mean
There is an assumption that a car being ‘totaled’ means it is damaged beyond repair. However, a car deemed totaled could look safe enough to drive. So, what does it really mean? How does the insurance company determine when a car is totaled?
Let’s break down what it means for a car to truly be totaled—and what happens next:
Definition Of A Totaled Vehicle
In general, a car is ‘totaled’ when the cost to repair the damage is close to or exceeds the car’s value. In other words, when it costs more to fix it than it’s worth—the car is totaled.
Total Loss Formula
In Pennsylvania, as well as half of the other states, a “total loss formula” comes into play. The total loss formula is guidance to determine if a vehicle is totaled.
What Is The Total Loss Formula?
A total loss formula takes into account:
- cost of repairs
- safety of the repairs
- resale value of the vehicle
- scrap value of the vehicle
In Pennsylvania, the total loss formula compares the resale value of the car before the crash to the cost of repairs plus the scrap value of the vehicle. If the cost of repairs plus the scrap value is more than the resale value, the vehicle is totaled. Additionally, if repairs to the vehicle compromise safety your insurance company might total the vehicle.
Example Of How A Vehicle Is Totaled
If your car is worth $10,000 and the repair cost is $10,000 or more, your car is totaled under the total loss formula. However, if the repairs only cost $5,000, your car might not be classified as totaled.
Check Your Insurance Coverage
Be sure to check with your insurance policy coverage to see how they classify a vehicle as ‘totaled’. Many times, insurance companies will total a vehicle at repairs that exceed 65-75% of the vehicle’s value. Each state and insurance company is different.
What Happens Next?
If you were in an accident and your car is considered totaled—either by your repair shop or insurance—these are the common next steps in the process. What happens next depends on the coverage available in your claim. Let’s assume you have coverage for the damage. You will still be responsible for the deductible.
If your insurance company deems the car totaled, they cut you a check for the value of the car. The car itself goes to a junkyard. Insurance will not pay for repairs, even if you want the car repaired.
If You Want To Keep The Totaled Vehicle
It is possible to keep the totaled vehicle. If in the event you want to keep the totaled car, you must purchase it from the insurance company. You are responsible for the cost of the repairs or can use your insurance payout. Odds are, the payout will not be enough to cover the full cost of repairs. For most people, the salvage process is not worth the effort.
Salvage Vehicle Insurance
Not all insurance companies are willing to insure a salvage vehicle. Additionally, salvage policies are different than regular car insurance. You may need to find a new insurance provider who will be willing to insure a salvaged vehicle.
If You Don’t Have Coverage
But what happens if you don’t have insurance that covers the damage to your vehicle? If you don’t have insurance coverage or the right insurance coverage, you are on your own. Collision and comprehensive coverages pay for damages to your vehicle depending on how the damage occurs.
Sue The At-Fault Driver
If another driver caused the crash, it is possible to file a claim against their insurance for the damage. But, you might get resistance from the at-fault driver’s insurance. It’s possible the at-fault driver’s insurance will deny your claim.
Kane & Silverman Injury Law Firm
At Kane & Silverman, we represent people that are injured in car crashes. If you have been injured in a car crash, talk to an experienced attorney for free. Our offices are in Philadelphia PA and Marlton NJ. Contact us for a free injury consultation.