After a collision, you may hope that your insurance company will fix your car so you can keep driving it. Unfortunately, this isn’t always the case. Sometimes a vehicle is declared a total loss or “totaled.”
In definition, “totaled” means that the cost of repairing your car exceeds its value. Several jurisdictions, including Indiana, have rules requiring insurance to declare a car totaled when the damage to a vehicle reaches a certain percentage of its worth.
Having your vehicle declared a total loss could be frustrating, and the compensation procedure can be complicated. You don’t have to enter it blindly, however.
Read on to learn what to expect when your car is totaled in a collision in Indiana. We’ll provide you with crucial pointers to seek the best value for your claim and how an Evansville car accident injury attorney can help.
What Is Total Loss?
Generally speaking, a car is considered a total loss when the cost of repairs after an accident surpasses the vehicle’s actual cash value (ACV).
The first thing to remember is that a total loss might happen in one of two circumstances: either a car is stolen or is severely damaged in an accident and declared road unworthy.
How Does the Insurance Company Value the Totaled Car?
Insurance providers use the amount for which an automobile could otherwise be sold to assess the actual cash value of a vehicle.
They determine the amount for which a vehicle should be sold by considering such variables as:
- Miles driven
- The condition of the vehicle
- Model and make of the vehicle
Drivers may double-check the insurance company’s ACV using the Kelley Blue Book system, which uses a similar valuation procedure.
Sometimes insurers declare a vehicle totaled even when the repair costs are less than the vehicle’s actual cash value.
While some jurisdictions permit insurance providers to use their judgment in determining whether an automobile is totaled, other states impose restrictions on this practice.
For instance, Indiana has a 70% total loss threshold before issuing a salvage title. That means for a car to be deemed totaled, the cost of repairs must be at least 70% of the car’s actual cash value.
What Options Do I Have After a Car Accident?
Indiana is a no-fault insurance state. That means drivers with adequate coverage can lodge claims with their insurance providers, the liability insurance companies of the at-fault drivers.
Furthermore, they can bring lawsuits against the at-fault drivers if a fair settlement cannot be reached.
To recover the expenses of the totaled car, the driver of a vehicle involved in an accident another motorist caused may file a property damage liability claim.
Steps to Take Following an Accident
Accidents of any kind can be terrifying. After a car accident, follow the measures below to guarantee everyone’s safety:
- Keep calm and check whether you are injured
- Examine yourself and other car occupants for injuries
- Contact the police
- Record the accident by capturing photographic proof if you can
- Gather contact details from witnesses, such as their phone numbers
- Seek medical help (even if you feel fine)
- Get in touch with an attorney
Filing a Total Loss Claim
Your vehicle won’t be fixed and returned to you once your insurance provider declares it to be totaled. Instead, your insurer will pay you the car’s ACV, less applicable deductibles.
Your insurer will then take possession of the totaled vehicle. Some consider this practice a “forced sale” because your insurance provider purchases your totaled automobile rather than restoring it.
You will need the following paperwork to begin the process:
- Odometer statement
- Vehicle bill of sale
- Certificate of title
- Power of attorney
Your insurance provider will use the bill of sale and the odometer statement to calculate the amount of your claim’s reimbursement. You will also need the certificate of title to hand your insurance company ownership of the vehicle.
A power of attorney is optional, but it enables your insurer to execute the title transfer themselves. In case of delays, you won’t have to worry about being the mediator between the DMV and your insurer.
How to Prove Total Loss
Proving a total loss is relatively easy, at least in most cases. You need to get repair quotes and evaluate them against the car’s NADA or Kelly Blue Book value.
But suppose you suffer personal injuries in an Indiana car accident? In that case, you should speak with an Evansville car accident injury attorney before agreeing to any conditions with your insurance provider.
Any individual injured due to another driver’s negligence is entitled to compensation for their medical bills, lost earnings, and other associated losses and damages.
Putting a Price Tag on Your Totaled Vehicle
So, what’s the value of your car after being totaled? It depends.
Generally, your insurance provider will calculate the ACV by considering the state of your vehicle before the collision and the market value of comparable used cars in your region.
Note: ACV is not the same as book value, which is unlikely to reflect current market pricing.
It would be beneficial to ask your insurer about the steps they take to calculate ACV. Make sure the vehicles being compared are the same model, have comparable features, and have similar mileage. This will enable you to get an accurate car appraisal.
If you recently had significant work done to your car, inform your insurance adjuster and be ready to provide the invoices. Major work involves replacing the gearbox or receiving a fresh coat of paint.
You might not think you’re getting a fair estimate, even if your adjuster could agree that the work was valuable. You only need to explain to your adjuster why you believe it should be higher.
Check whether your policy contains an appraisal provision if you and the insurer have a significant difference of opinion and you can’t convince them to see things your way.
You and your insurance provider will engage an appraiser when you use an appraisal clause. They will each assess the actual cash value and make an effort to agree. If they can’t, they will pick a different appraiser to serve as the umpire.
What Happens If There Is a Difference Between My Car Loan Balance and Car Value?
You will obtain your settlement payout by check or direct deposit into your local bank after the value of your car has been determined.
If you still owe money on the vehicle, you and your lender can jointly get a check, though you might need to grant your insurance permission to pay your lender first. You will often be required to pay your lender any difference out of pocket if the insurance payout is less than what you owe.
But if your loan has a feature known as guaranteed asset protection or GAP coverage, it might save you from having to pay the discrepancy between your existing debt and your insurance payout, then that might not be the case.
GAP coverage is an optional feature offered at an additional fee when the loan is established. GAP insurance covers the difference between what the insured collects in a settlement for a totaled car and what they still owe on the vehicle.
Without GAP insurance, the owner is responsible for paying the difference to the auto financier. You may still be liable for covering your deductible, depending on the specifics of the GAP plan.
Your coverage could also provide auto replacement assistance, which would let you trade in your old automobile for something newer or at least comparable.
Remember that the accident won’t affect your credit score, but outstanding debts may. Therefore, you must confirm that your vehicle loan is paid in full.
Handing Over Your Totaled Vehicle
It is customary for the insurance company to confiscate your car following a total loss. You must physically give the title to the insurance provider after signing it over to them to transfer ownership.
If you can’t find yours, apply for a replacement title at your state’s motor vehicle department. However, if you still have a loan on your vehicle, your lender will take possession of the title certificate. You must permit them to release it to your insurance company.
Additionally, you must grant the shop holding your car permission to give it to the insurance company. Be careful to take away all of your personal belongings before you proceed. You can also be required to take the license plates off by state legislation.
Can I Keep My Totaled Car?
This depends on the details of the collision, but not all states will allow car owners to keep their totaled vehicles. However, when allowed, some owners choose to keep the car rather than turn it over to their insurer.
This typically occurs when the vehicle has sentimental value, was wrecked for cosmetic reasons, or the owner has previous expertise working on autos or selling components.
In these situations, the estimated salvage lowers the amount of your compensation. Remember that your vehicle will have a branded or salvaged title if you keep it.
The value probably decreases since it was involved in a significant accident or suffered considerable damage. That implies that even if you fix it, you may not be able to insure it, and the salvage title might make it impossible to sell.
You may no longer get physical damage coverage if you decide not to fix the vehicle even though it is still drivable (for instance, if it has hail damage).
What To Do with Your Car Insurance After a Total Loss
After completing the settlement and transfer of ownership, you must remove the car from your insurance policy- if the insurance provider doesn’t do so automatically.
If this was the only car covered by the policy, you must still retain the policy to keep you protected while you drive other vehicles until you buy your next one. If you decide not to buy a replacement car, you might want to get a “named non-owners policy.”
Your insurance rate may increase if your automobile is totaled, depending on the specifics of your accident and claim. But you may be eligible for accident forgiveness if it has been a while—typically many years—since your last at-fault accident.
Contact an Evansville Car Accident Injury Attorney Today
Individuals injured or their car totaled in a car accident should consult a car accident injury attorney if they consider legal action.
At Legal Giant, we partner with the best car accident lawyers who can review your case and advice you on the way forward.
Our Evansville car accident injury attorneys have years of combined experience to help you throughout the legal process.
Contact us at (855) 740-5024 for a no-cost case evaluation.
