If you have been in a severe enough motor vehicle accident in Arizona, your car may legally be deemed “totaled.” This means that the cost to repair the vehicle exceeds its actual cash value (ACV), making it a total loss.
When your car has been declared a total loss, you can seek a settlement with your or the other driver’s auto insurance company, depending on the circumstances. For example, if your are responsible for causing the accident, the other driver may be entitled to the check. If you are not, you may receive compensation.
If you live in Maricopa County and disagree with your insurer about the settlement for your totaled vehicle’s actual cash value, Stone Rose Law can help. Our car accident attorneys are experts in Arizona’s total loss laws, the insurance policy claims process, and negotiating with car insurers for the highest claim total totaled car insurance payouts.
Call our Phoenix law office at (480) 498-8998 to schedule a free initial consultation to discuss the settlement for your totaled vehicle. We can also help with any car insurance policy claim dispute you have. Our offices are available 24 hours a day, seven days a week, by phone or online.
Under Arizona law (ARS 28-2091(c)(3)), a totaled vehicle is also known as a “salvage vehicle.” A salvage vehicle includes one that has been “…stolen, wrecked, destroyed, damaged by flood or water, or otherwise damaged to the extent that the owner, leasing company, financial institution, or insurance company considers it uneconomical to repair the vehicle.”
To understand how an insurance company calculates your vehicle as a salvage vehicle, here are some key terms and points to know:
When calculating the salvage value of your car, your insurer considers multiple factors, including:
Remember, when insurance companies consider a vehicle’s condition, they evaluate its safety and roadworthiness. The older the car, the more likely it will be totaled in an accident.
You should also remember that smaller cars tend to be totaled more often than larger cars, and cars are totaled more often than trucks.
After a car accident, your damaged vehicle will likely be taken to an auto repair shop your insurance company chooses. Once there, qualified mechanics will inspect the vehicle and estimate the cost of repairing the damage.
The car insurance company may also send a claims adjuster to view the vehicle in person and assess the damage in a written repair estimate.
Once the car has been inspected, the insurance company calculates a value that will be used to determine if the vehicle is a total loss. In Arizona, a vehicle is considered a total loss if its actual cash value is equal to or less than the cost of repairs plus the salvage value.
For example, imagine your car’s actual cash value is $15,000, its salvage value is $8,000, and it would cost $8,000 to repair.
$8,000 Cost of repairs + $8,000 Salvage Value = $16,000 Total Car Value
Since the combined total car value is $1,000 more than the actual cash value, it would be considered a total loss and not worth the price of repairing.
The Arizona insurance system operates on a fault basis, meaning that the driver responsible for causing the crash must pay for the damage. Because of this, all drivers in Arizona are legally required to carry at least $15,000 in property damage liability insurance.
If your insurance company decides your car is totaled, you must determine who pays for an insurance settlement. If you did not cause the accident, the at-fault driver’s insurance company should write you a check for the pre-crash market value of your vehicle.
Otherwise, you can seek a settlement through your own insurer.To obtain an insurance settlement for your totaled vehicle, you or your Phoenix car accident attorney must prove that the other driver was more at fault for the crash than you were.
Start by filing an insurance claim with your insurance company. Once this happens, your insurer will send an appraiser to establish your car’s actual cash value.
After making its appraisal, your insurer will make you a settlement offer for the actual cash value of your vehicle. If you disagree with the insurance company’s valuation, you can contest that value and make a counteroffer to the insurance company.
When you are negotiating with the insurer, here are some strategies you and your attorney can use to improve your leverage:
In many cases, having an attorney experienced in negotiating with insurers can help you reach a more favorable final settlement.
After you agree on the car’s settlement value and receive a total loss payout, you will transfer the car title to your insurance company.
If your car is totaled, it will be taken away for salvage after removing your personal effects. This means the recyclable parts will be collected, and the non-recyclable parts will be disposed of. At this point, the totaled vehicle is no longer yours.
Once you receive an insurance payment for your total loss claim, it is up to you whether or not to use it to replace the car. Speak to a car and motorcycle accident attorney in Phoenix today to determine your legal options following a collision that leaves you with a totaled vehicle.
Although you can take the settlement sum from your insurance and use it to purchase a car to replace the totaled one, you are not required to. The insurance settlement money is yours to use as you see fit.
Sometimes, like when you want to repair the car at your own expense, you can keep a totaled vehicle after settlement. If you do, the insurance company will subtract the car’s salvage value from your settlement amount.
Note: keeping your totaled car will mean that its new salvaged title will always need to show that the car has been rebuilt or salvaged. This may affect whether you can drive the vehicle on Arizona roads and highways and may also increase your insurance premium on that vehicle.
If you are held responsible for the accident that totaled your car (a.k.a. you are the “at-fault driver”), you will need the correct type of coverage on your own insurance policy to pay the totaled car’s value. Some policies that cover these circumstances include collision coverage or comprehensive coverage.
Collision insurance pays for the pre-crash value of a totaled vehicle minus the deductible, regardless of who is at fault. Comprehensive insurance pays if the damage is caused by something other than an accident, such as a natural disaster or vandalism.
Insurance companies often sell collision and comprehensive insurance together. If you are financing your car, your lender will likely require you to have both.
If your insurer decides your car is a total loss, you can file a claim using your collision and comprehensive policy with the insurance company. You will receive a settlement amount that you can use to purchase a replacement car.
New car replacement coverage will pay for a new car similar in make and model to your totaled vehicle. It is insurance that you carry on top of collision and comprehensive coverage. Also, this coverage usually applies only to vehicles within the insurance company’s vehicle age and mileage restrictions.
Uninsured or underinsured motorist insurance could also pay for a totaled vehicle if the crash was caused by an uninsured driver or in a hit-and-run. However, it is still advisable to carry collision insurance in addition to uninsured or underinsured motorist coverage, especially if the value of your car is more than the coverage limit.
If you are financing or leasing your vehicle, you will still be responsible for paying off any owings on it from the payout you receive.
For example, if you owe $10,000 on your car loan, but your vehicle’s actual value has depreciated to $7,000 when it’s totaled, your insurer will reimburse you for the $7,000 actual cash value. Your lender would be entitled to this sum, and you would still be responsible for paying the lender the shortfall of $3,000.
One way to avoid being held responsible for any shortfall in your insurance payout is to buy additional coverage known as guaranteed asset protection (GAP) coverage. This policy will pay the difference between the actual cash value of your car and the balance you owe. Most of the time, if you owe money financing your car, your lender will require you to carry GAP coverage.
Your insurance company will typically pay your claim settlement check within 30 days.
Negotiating an insurance settlement for a totaled car can be complicated. Disagreements can arise about the car’s value before the accident; other times, an insurer’s estimation that your car is totaled may not be the same as yours.
At Stone Rose Law, our Phoenix auto accident attorneys serve car accident clients throughout Arizona. We do everything to ensure you obtain the compensation you deserve, including the settlement value for your car if it is totaled.
If your insurance company has denied your policy claim after a car accident, call us. We can even help if you are unsure of what to do after the accident and have a question about your legal rights in a personal injury case. Contact us online or call (480) 498-8998 to schedule your free consultation with a qualified car accident lawyer in Phoenix, Chandler, Scottsdale, or throughout Maricopa County to discuss your car accident insurance settlement.
