Drivers that have been involved in a car accident and are anxiously awaiting word from the insurance company so that they can repair their much beloved automobiles may be distraught to learn that the insurance company has deemed their vehicle a total loss. Instead of working with their local auto body shop for repairs, they find themselves faced with terms such as “totaled” and “actual cash value.” It is important to understand, however, that car owners have options beyond simply walking away from their vehicles.
What Does “Total Loss” Mean?
The term total loss, or totaled, is used when an insurance company decides that a vehicle would cost more money to repair than it is worth. In the insurance company’s minds, it doesn’t make much sense to spend money repairing a vehicle that does not carry an equal amount of value. Instead, they choose to pay out to the owner the value of the vehicle as determined by its condition before the accident. This value is calculated considering fair market value while keeping depreciation, and mileage in mind. Many times, this value is not equal to the amount of money it would cost to purchase a new car.
What Happens After A Vehicle Is Declared a Total Loss?
Once a car has been looked at and deemed totaled by the insurance company, the usual protocol includes sending a check to the insured for the value of the car and then sending the car to the junkyard. While this may work for some people, not everyone is ready to so simply part with their vehicle. Some people may have a sentimental attachment or feel that the insurance’s appraisal of the car’s worth is incorrect. In these situations, it may be possible to work with the insurance company to win a totaled car reprieve.
Refuting A Claim is Possible
The burden of proof is on the one refuting the claim, however, so proof must be provided that would boost either the value of the vehicle or lower the cost of repairs. To provide proof that the vehicle is worth more than the valuation, records showing that the vehicle has included extras like air conditioning, leather seats, performance packages, or customized equipment could be submitted. It may also be possible to research auto body repair costs and submit estimates showing that it may be possible to repair the vehicle for a much lower cost than originally estimated.
What to Do with a Totaled Vehicle
Assuming you owned the vehicle, you have several options when it comes time to decide what to do with your totaled vehicle.
1. Accept the Insurance Company’s Payout
This is the route that most people take because it is the simplest – and often – the best choice for all parties. However, you should keep in mind negotiating this payout amount is possible. As noted above, if you decide to refute or negotiate a claim, you should be prepared to show proper documentation to back up your argument.
2. Keep Your Vehicle and Find an Auto Body Shop for Repairs
In many cases, however, the insurance company will not budge on their earlier assessment. Just giving up on a vehicle may not be a viable option for some people either. Instead, they may choose to keep their vehicle and take responsibility for the repairs.
This is absolutely possible in most states if the vehicle is owned by the insured. In these situations, the car remains in possession of the insured and the insurance company issues a check for the actual cash value of the car minus the deductible and the amount of money the junk yard would have paid for the vehicle. After the check has been issued, the owner is free to work with any auto body shop to negotiate repairs.
3. Keep Your Vehicle As Is
If your vehicle is safe to drive and you can put up with the cosmetic damage, then keeping your vehicle as is may be a viable option for you.
4. Keep Your Vehicle and Make Repairs Yourself
There’s no requirement for you to take your vehicle to a professional for repairs. If you feel like you have the experience to make the repairs yourself, then go for it!
5. Donate Your Vehicle
There are many donation services out there that will tow your car for free and sell it for parts. You get to choose the charity that receives the money and will get a tax deduction for the depreciated value. A win-win-win, we think!
Contact Badell’s for a Repair Estimate
Being involved in an automobile accident is traumatic enough. Those involved should not feel forced to let go of vehicles that have either emotional or financial value to its owner. Instead, it may be possible to either negotiate an amended agreement with the insurance company or have the car repaired using the money issued to provide for the value of the vehicle. Either way, those involved need to know that they have options after their car has been totaled and do not have to part with a vehicle that they are not ready to see go to the junkyard.
If you’d like to stop in to one of our local body shops in Aston or Malvern to discuss your options and get FREE estimates on what it would cost if you chose to pay out of pocket to keep your vehicle, we’d be happy to help!>