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By insurance standards, a car is deemed to be a total loss if the cost to repair the vehicle is more than its value. Generally, this is when repairs are estimated to cost 70 to 80 percent of what the car is worth. A vehicle may also be declared totaled if it is deemed irreparably unsafe, or the extent of the damage is considered a total loss under state regulations. After a serious car accident, the insurance company must determine the actual cash value of your car to be able to decide if it is a total loss. If you get in an accident that completely wrecks your car, you should take the following steps:
The insurer will look at various factors, such as the make and model of the car, major options the car featured, how old it is, how much mileage is on the car, the resale value, and the overall condition at the time of the crash. After considering all of this information, they will decide on the vehicle’s actual cash value and offer you that amount minus any deductible on your policy. This is where your research on your car’s value comes in; it will help you evaluate whether the offer from the insurance company is fair and reasonable.
If you are involved in an accident caused by the negligence of another driver and your car gets totaled, the other driver’s insurance has to pay you the value of your car through their property damage liability coverage. However, if you have the bad luck to be hit by an uninsured/underinsured driver, then your own insurance kicks in to cover your losses. It is a good idea to periodically review your insurance policy and really understand what you are paying for and your liabilities should you be involved in a serious accident.
The two kinds of auto insurance are comprehensive and collision coverage. Comprehensive insurance covers all types of unexpected events other than collisions, such as fires, hitting a deer, or someone stealing your vehicle. Collision insurance is optional except for cars that are leased and can be quite expensive in some states. This supplemental insurance covers damage to your vehicle regardless of who caused the accident.
If your car is totaled after an accident caused by another driver, their insurance should pay damages up to the limit of the policy, and then your comprehensive and/or collision coverage kicks in, minus the deductible. If your car was being financed, then it is possible that after the insurance payment you may still owe money to your lender and that comes out of your pocket. There is insurance to cover this gap known as loan or lease gap coverage.
There are different reasons why you might want to hold on to your car after it has been declared a total loss, whether it is for the salvageable parts or for sentimental reasons. A number of factors will determine whether keeping it is possible. If you own the car outright, then you have control over the decision, however, if it was leased or you are still paying on a loan, then the lienholder gets to decide because they own the title.
Some states do not allow drivers to keep a totaled car. Other considerations are whether you will be able to get insurance for your salvaged vehicle or if it is even repairable and can pass an inspection.
Any car accident can be a traumatic experience, but one in which your car was totaled can be particularly overwhelming. Let our experienced Wilmington car accident lawyers at Rhoades & Morrow help you sort out the negotiations. Call us at 302-427-9500 or contact us online today to schedule a free consultation. We have convenient office locations in Wilmington, Bear, and Milford, Delaware, and we represent clients throughout Middletown, Dover, Milford, Lewes, Rehoboth, Elsmere, and Seaford.