If you’re involved in a bad car accident, your vehicle may be totaled – or at least, that’s what the mechanics and insurance agents are telling you. But what exactly does it mean to have a totaled car and what can you do about it?
What Does It Mean When a Car Is “Totaled”?
Definitions of “totaled” vary slightly from area to area. For the most part, a vehicle is considered totaled if the cost to repair the damage exceeds the value of the car, or the cost of replacing it.
As a simple example, if you buy a brand new car for $20,000, and you immediately get into a wreck with damages that exceed $20,000, you might as well buy a new car, rather than trying to repair the damage.
In different states, the term is treated slightly differently. As an example, in the state of Alabama, a car can be considered “totaled” if the costs of the damage exceed 75 percent of the car’s value. If you have a vehicle worth $10,000 and the estimated costs of repairs are $7,500 or more, the car could be considered totaled.
Finding Out the Car Is Totaled
How do you find out that your car is totaled?
Everything starts with the car accident.
- File a report. After the accident, you should contact police and file a report so you have an official record of events. It’s also important to gather some of your own evidence if you can, collecting dash cam footage, taking photos, and even talking to some witnesses if they’re available.
- Get medical attention. It’s also important to get medical attention as quickly as possible, even if you don’t feel like you were hurt. Call an ambulance for anyone who needs one and attend your follow up appointments so you can get a proper medical evaluation and the treatment you need.
- Talk to a lawyer. At this point, you should talk to a car accident lawyer as soon as possible. Your lawyer will help you understand the process from here and help you determine if you have a case against the person responsible for the accident. They may also make recommendations for negotiating with insurance companies and navigating this complex legal process.
- Get repair estimates. Insurance companies will guide you to get repair estimates as soon as possible. In some cases, they may direct you to a specific mechanic. In others, you may be responsible for gathering multiple different quotes. Once the repair estimates are in, and you know the actual cash value of your vehicle, you can make a determination on whether the vehicle is totaled. Again, the legal definition of this word varies depending on where you live.
So what do you do after you find out that your vehicle is, in fact, totaled?
- Get legal advice. If you haven’t already, get some legal advice. It’s important to talk to a lawyer so you understand your rights, the damages you deserve, and the best process for maximizing your potential payout. Your lawyer can provide you with suggestions and direction throughout this entire ordeal.
- File an insurance claim. In some cases, you’ll want to file an insurance claim. If you were responsible for the accident, you’ll contact your own insurance company. Otherwise, you’ll contact the insurance company of the driver who is responsible for the accident.
- Negotiate. Insurance companies want to remain as profitable as possible, so they typically offer people as little money as possible to cover damages. If you’re not being reimbursed for everything you deserve, it may benefit you to negotiate. Your lawyer can help you with this.
- Pay off your loan. After your car is totaled, if you still owe money on the loan, you’re going to be responsible for paying off that loan. Unfortunately, this is true even if you owe more money than the car is actually worth.
If you want to avoid potential issues that could come up as a result of totaling a vehicle, do the following:
- Check your insurance policy carefully. Insurance policies are notoriously complex. Be sure to review your policy carefully.
- Be wary of vehicle depreciation. Avoid owing more than your vehicle is actually worth.
- Always get professional legal advice. Talk to a lawyer early and often.
- Drive safely. Most car accidents are preventable. Drive as safely as possible to minimize your chances of totaling a vehicle.
Car accidents are common, but accidents that total vehicles are somewhat rare. If you drive safely, improve your insurance policy, and seek professional legal advice when necessary, you can minimize your chances of totaling your vehicle and maximize your potential payout if your vehicle is ever totaled.