Introduction

Dealing with a car accident is difficult enough, but losing your vehicle can be even more challenging. You have certain legal rights when your insurance company declares your vehicle a “total loss,” meaning the cost to repair the vehicle exceeds (or nearly exceeds) the cost of replacing the vehicle outright. This blog will explore what it means for you when your car is considered a total loss, how to navigate the insurance process, and your rights as a vehicle owner. While resolving property damage claims is more straightforward than resolving personal injury claims, the process can become confusing when paired with the stresses of being involved in a car accident.

  1. Understanding Fair Market Value and Total Loss Criteria: A car is typically deemed a total loss when the cost of repairs approaches or exceeds 70-75% of its fair market value. Fair market value is the price a willing buyer would pay a willing seller for the vehicle, considering its age, condition, and mileage of the vehicle. Insurance companies use this threshold to determine whether it’s economically feasible to repair the vehicle. For example, if a vehicle is valued at $6,000.00 and the estimated costs to repair the vehicle are $4,600.00, the vehicle would most likely be deemed a “total loss.” Unfortunately, the value of the vehicle to the owner itself is not considered.
  2. Challenging the Valuation: If you disagree with the insurance company’s valuation of your vehicle, you have the right to challenge it. This can involve getting independent appraisals or showing evidence that your car has features or conditions that increase its value. For example, you may have recently spent $1,500.00 to replace the vehicle’s transmission or spent $1,000.00 to put new tires on the vehicle prior to the accident. These are objective upgrades that increased the value of the vehicle prior to the accident and should be properly considered. Understanding your vehicle’s worth will help you determine if a settlement offer is fair.
  3. Repairing the Vehicle Independently: You may choose to repair the vehicle yourself if you can do so for less than the insurance estimate. For example, where the damage is mostly cosmetic and the engine and its components still work as well as they did before the accident. In such cases, the insurance company might pay you the total loss amount of the vehicle (the “fair market value”), minus the salvage value of the vehicle. However, be mindful of the legal and safety implications of this decision, especially regarding required inspections and regulations in your area. Just because you believe your car is safe to drive, does not mean the Department of Transportation (or county sheriff’s department) will agree.
  4. Options for Who Can Perform the Repair: If you decide to repair your totaled vehicle, you have the right to choose who performs these repairs. This could be a job for a professional auto repair shop or a personal undertaking—if you have the necessary skills. However, the quality of the repair work can affect future insurance coverage and the car’s safety. Some insurance companies will not continue to insure a totaled vehicle, citing safety reasons.

What Gary Says About Settling a Total Loss Property Damage Claim:

When your car is declared a total loss, it’s important to know your rights and understand the insurance company’s process. If you’re in Columbus, Georgia, Harris County, Georgia, Ft. Moore, Georgia, Phenix City, Alabama or Lee County, Alabama, and need more information or legal advice regarding settling a “total loss” property damage claim, consider reaching out to The Law Office of Gary Bruce. With over 30 years of experience in dealing with insurance claims, Gary Bruce offers free, no-obligation consultations to help you understand your options and potential recovery. Contact the office at 706-576-4279 for expert legal assistance.

Contact The Law Office of Gary Bruce at 706-576-4279 for expert legal assistance in these challenging situations. Gary also addressed this issue on a recent episode of “Legal Break” during the WTVM morning news.  This link will take you to the video: http://www.garybrucelaw.com/video/wtvm-legal-break-what-are-my-rights-if-the-insurance-company-says-my-car-is-a-total-loss/