While injuries are naturally everyone’s first concern following a crash, property damages can weigh heavily on your mind, as well. Your car plays a key role in your everyday life. You use it to go to work, run errands, and manage your family life. You need to have your vehicle to ensure you can get where you need to go when you need to get there.
It’s only normal to have many questions and concerns about your car after a collision.
Parting ways with your automobile after an accident can be a difficult experience. For starters, did you get all of your stuff out of it before it was towed away? There’s also the mystery of whether it will be “totaled” or not. How is that decision made?
There’s a Formula for That
The factors determining total loss can vary from state to state, but the gist is that the insurance company decides a car is a total loss when it would cost them too much in relation to the car’s total value to make the repairs, or when the damage to the car, regardless of repair cost, renders it unsafe.
For example, under La. R.S. § 32:702, an insurer will likely total your car if the expenses needed to repair it are 75 percent or more of the current market value of the vehicle just before the crash. The law dictates this value is set by the National Automobile Dealers Association (NADA) Handbook.
Once they have the estimates for repair and understand the damage the vehicle suffered, the insurer will do the math. They plug the numbers into the formula and determine if they will total the vehicle.
If so, the insurance company then sends you a check for your car’s actual cash value (as they determine it; more on this later), your car gets a salvage title (which means it’s no longer allowed on the roads) and it’s sold to a salvage company.
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Sounds Pretty Final, But don’t Give Up on Your Ride Yet
Sometimes it’s worth it to keep your car, even if it’s been deemed a total loss. For instance, say you are rear-ended in your lightly used older car that’s in excellent condition, paid for, and has extremely low mileage. It’s reliable, insurance is low, and you don’t have a car note. The value of this car is in how much money it saves you every month and is not fully reflected in its “value on paper” or actual cash value.
The damage is fixable and has not made the car unsafe, but because the repair costs are more than the insurance company will pay in relation to the car’s value, they dump it on the “total loss” pile.
In such a case, you might be able to buy your car back from the insurance company – meaning you keep the damaged car, and your insurance payout will be the difference between the actual cash value of the car and its value as salvage.
If all goes well, you might be able to get the repairs done for the amount of your payout and end up not only breaking even (give or take a deductible) but also still in the happy position of not having a car note.
It’s worth noting, however, insurance companies typically aren’t thrilled to write a policy for a car that’s been salvaged in the past – so check on that before you make a decision.
Getting the Most Out of Your Car’s “Actual Cash Value”
Whether you’re buying back your total-loss car or taking the full insurance payout and moving on to a new car, the payout you get is calculated based on your car’s actual cash value (ACV).
No matter what you paid for the car or what you might still owe on it, the insurance company gets to decide what it’s actually worth based on some accepted factors – but there’s often some wiggle room where your persistence can make a difference.
Factors that are considered are the year (the value of a car typically depreciates each year), the make and model of the car, its mileage and its condition.
Some insurance companies subscribe to services such as the CCC Corporation or the National Automobile Dealers Association, which provide the service of determining a vehicle’s value. In some states, such as Louisiana, the law also details how the insurer determines the value.
There is also another method that some insurers use, and one that you may be able to utilize to show that your vehicle is worth more than the numbers in a book: comparing prices on local lots.
To do this, you will need to find several comparable vehicles for sale on local lots. Three should be plenty. You will calculate the average price of these vehicles and use it to show the value of your car on the market in your area today.
Don’t Take the Insurance Company’s Word for It!
Yes, it’s true; insurance companies sometimes generate incorrect information that might lower the ACV they determine for your car. And yes, it’s okay for you to question them.
In fact, you should push for a better settlement than their original offer. All insurance settlements are negotiable, and the insurer may not offer a full settlement the first time. Unless you are working with an attorney, you will need to advocate for yourself here.
For example, if the insurance company doesn’t have your car’s mileage information handy, they might estimate it based on a standard formula.
If your mileage is actually lower than their estimate and you can prove it (say, from maintenance receipts), they probably would have to increase your car’s ACV. Or maybe you just dropped $600 on four brand-new tires right before the wreck. Show them the receipt!
If you suffered injuries and have other damages as well, you may want to consider hiring an attorney to handle your insurance claims and navigate this process for you.
They will ensure the insurer has the accurate value of your vehicle and is compensating you for any additional related expenses, such as the sales tax and license fees you will have to pay when you purchase a new car.
Get Help from Morris Bart, LLC If You Were Hurt in Your Collision
The attorneys of Morris Bart have decades of experience dealing with the complexities of insurance claims and car accidents. If you think your vehicle is worth more than what your insurance is willing to pay out, give our offices a call. We’re available 24/7, and we’d like to help you get the money you deserve.
We have 15 offices and serve all areas of Louisiana, Mississippi, Alabama, and Arkansas. We offer free case assessments and can help you understand the total loss laws near you. We also pursue damages based on injuries and other losses.
Call today to get started with your free case review.
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