Maryland saw 110,340 car accidents in 2023, according to the Maryland Highway Safety Office. Of these, 81,198 included property damage. If you’ve recently been in a car accident, one of the most distressing outcomes can be hearing that your vehicle has been “totaled.” This word, often used by insurance companies, causes confusion and concern in many accident victims.
What does it mean if your car was totaled? Understanding this is crucial, as it directly impacts your financial future and your ability to get back on the road.
In this post, we’ll take a look at what it means to have a totaled car, how insurance companies typically determine total loss, and what your options are moving forward.
What Does “Totaled” Mean?
If your car is deemed totaled, it means that the cost of repairing the damages is more than a certain percentage of the car’s actual cash value (ACV). This percentage varies by state and insurance policy, but usually, if it’s estimated that repair costs would exceed 70% to 75% of the ACV, the car will likely be considered totaled.
This total includes the cost of repairs as well as additional costs like car rental, towing, or storage fees incurred during the repair process.
How Insurance Companies Determine If a Car Is Totaled
Insurance companies use a specific formula when deciding whether or not a car should be declared totaled.
First, they assess the extent of the damage to the vehicle and get estimates for repairs from certified mechanics or body shops. Once these estimates are gathered, they compare the total repair costs to the car’s ACV.
There are a number of factors that come into play when evaluating ACV and deciding whether a car should be declared a total loss.
These include:
- The age and mileage of the vehicle
- Pre-accident condition
- Resale value
- Local market prices for similar vehicles
What Happens After Your Car Is Totaled?
Once it’s determined that your car is totaled, your insurance company should offer you a settlement offer based on the ACV of the vehicle. This offer represents the amount of money the insurance company is willing to pay you for your car, minus any deductible that applies to your policy.
Insurance companies are for-profit businesses and often use unsavory methods to protect their bottom line. That’s why It’s important to review any offer carefully and ensure that it accurately reflects the fair market value of your vehicle.
You have the right to negotiate with the insurance company if you believe their initial offer is too low.
A qualified car accident lawyer can help you determine if a settlement offer is fair.
Options After Your Car Is Totaled
Once you receive a settlement offer, you have several options on how to proceed.
One is to accept the settlement offer and let the insurance company take ownership of the totaled vehicle. In this case, you’d receive the agreed-upon payment amount, and the insurance company will likely sell your car for salvage or scrap.
Another option is to retain possession of the totaled vehicle, often referred to as “buying back” your car from the insurance company. If you choose to do this, the insurance company deducts the salvage value of the vehicle from your settlement amount, and you maintain ownership of the car.
Keep in mind that owning a totaled vehicle can include some additional requirements. Things like getting a salvage title and repairing the vehicle to make it roadworthy again before driving. You’ll need to check your state’s regulations concerning salvage titles because they can affect your car’s resale value and insurance requirements.
Impact on Your Insurance Premiums
Being involved in an accident where your car is totaled can often affect your insurance premiums.
Even when an accident wasn’t your fault, insurance providers may decide that you’re now a higher risk, and increase your premiums when you renew your policy. Make sure that you discuss any potential impacts of a totaled car with your insurance provider as well as options to minimize future rate increases.
Legal Considerations and Assistance
Dealing with the aftermath of a totaled car can be complicated and time-consuming, especially with insurance claims and negotiations. If you feel that your insurance company’s settlement offer doesn’t fairly and adequately compensate you, or if you experience difficulties during the claims process, it can help to seek legal assistance.
At GDH Law, our experienced attorneys can explain your legal rights, negotiate with insurance companies on your behalf, and help you seek any additional compensation available. Whether you choose to accept an insurance settlement, keep your totaled vehicle, or get legal assistance to deal with a disagreement, understanding the process helps you navigate the situation effectively.
Remember: review all offers carefully, make sure that you understand your future insurance implications, and get help when needed to protect your right to fair compensation throughout the claims process.
