What Does it Mean if Your Car Is “Totaled” in a Crash?

If you have been in a motor vehicle accident in Arizona and the damage is severe enough, then under state law, the car will be deemed as “totaled.” This means it is a total loss, or the repair cost exceeds the actual cash value of the vehicle.

If your car gets declared a total loss in an automobile accident, then depending on the circumstances of the accident, in particular, who is at fault, you can seek an insurance settlement with your auto insurance company or the other driver’s insurer.

Negotiating an insurance settlement for a totaled car is not always simple. For example, sometimes 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.

If you live in Maricopa County and disagree with your insurer about the insurance settlement for your totaled vehicle’s actual cash value, or if you need help during any part of the insurance policy claims process, then Stone Rose Law can help you. Our car accident attorneys are experts in Arizona’s total loss laws and in negotiating with car insurers to make sure they do not take your best interests for granted in the final settlement.

Call our Phoenix law office at (480) 498-8998 to schedule a free initial consultation to discuss your auto insurance company settlement for your totaled vehicle, or for any car insurance policy claim dispute you have. Our offices are available 24 hours a day, seven days a week by telephone, or you can contact us here to communicate with us online.

What Is a Totaled Vehicle?

The exact definition of a totaled vehicle varies from state to state. Different states use different damage percentages to determine if a vehicle is a total loss. In Arizona, a vehicle is considered totaled if its actual cash value is equal to or less than the cost of repairs plus the salvage value.

Actual cash value means how much the vehicle was worth before the accident, not how much it is worth after. The salvage value is the value of the vehicle in its current (post-accident) state.

When they calculate the actual cash value of your car, insurance companies use multiple factors. These include:

• The age of the vehicle. The older the car, the more likely it will be a total loss in an accident.
• The vehicle’s condition, including its safety and roadworthiness.
• The size of the vehicle. Smaller cars tend to be totaled more often than larger ones, and cars are totaled more often than trucks.
• How many miles are on the vehicle.
• The resale fair market value of other, similar cars in your area.
• The estimated cost of repairs and labor.

For example, if the actual cash value of your car is $15,000, its salvage value is $8,000, and it would cost $8,000 to repair, the equation would look like this: $15,000 actual value minus $16,000 in combined repair cost and salvage value equals -$1,000. Because the final sum is negative, under Arizona law your car is totaled.

How Do Insurance Companies Determine if a Car Is Totaled?

After a car accident occurs in Arizona, your damaged vehicle will be taken to an auto repair shop. Often, the car will be taken to a mechanic who has been approved by your car insurance company.

Once there, qualified mechanics will inspect the vehicle and estimate how much it would cost to repair the damage. 

The car insurance company may also send a claims adjuster to view the vehicle in person and assess the damage. The repair estimate must be given in writing. 

If the estimated cost of repairs plus the salvage value of the vehicle exceeds the actual cash value of the car, the auto insurance company will deem it a total loss.

What Happens When a Car Is Totaled?

If you are told by an insurance company that your car is totaled, then you will need to determine who is responsible for paying for a replacement. If you did not cause the accident that totaled your car, then 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.

In Arizona, the insurance system operates on a fault or tort basis, meaning the driver responsible for causing the crash must pay for the damage. All drivers in Arizona legally must carry at least $15,000 in property damage liability insurance for this purpose. To obtain an insurance settlement based on this coverage for your totaled vehicle, you or your Phoenix car accident attorney must prove that the other driver is more at fault for the crash than you are.

A number of things will happen after you are in an accident in which your car is totaled. Here are a few of the items to consider:

File a Claim With Your Insurance Carrier

Start by filing an insurance claim with your insurance company. Once this happens, your insurer will send an appraiser to establish what your car’s actual cash value was.

Negotiate a Settlement Offer

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, then 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:

• You can ask that the insurer re-inspect your vehicle to reassess its damage.
• You can request a third-party appraisal of the car.
• You can appeal the insurance company’s decision through the insurer’s own appeal mechanism.
• If you believe your insurer is acting unfairly in negotiations, then you can contact the Arizona Department of Insurance and Financial Institutions and file a complaint.

In many cases, having an attorney experienced in negotiating with insurers can help you reach a more favorable final settlement.

Transfer Ownership of Title to the Vehicle

After you have reached an agreement on the settlement value of the car, you will transfer the car title to your insurance company. 

If your car is declared totaled by your insurance company it will be taken away for salvaging—after your personal effects are removed. 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.

In some cases, you can elect to keep a totaled vehicle after settlement. This might be, for example, if you want to pay out of your own pocket to repair the car yourself. If you choose to keep the car, then the insurance company will subtract the car’s salvage value from your overall settlement amount.

Note that keeping your totaled car will mean that its new salvage 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.

Replace the Vehicle

Once you receive an insurance payment for your totaled vehicle, 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. 

You can take the settlement sum from your insurance and use it to purchase a car to replace the totaled one, but you are not required to. The insurance settlement money is yours to use as you see fit.

First-Party Insurance Coverage for a Totaled Car

If you are found to be responsible for the accident that totaled your car (the “at-fault driver”), you may still qualify for coverage. However, you will need the correct type of coverage on your own insurance policy to pay the totaled car’s value, such as 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.

Uninsured/underinsured motorist insurance could also pay for a totaled vehicle if the crash was caused by an uninsured driver, or if it was a hit-and-run.

If a car accident totals a vehicle that you were leasing, you may need an additional type of insurance to pay the difference between the pre-crash value and how much you still owe on the lease. This is referred to as gap insurance.

Call Stone Rose Law Today

At Stone Rose Law, our Phoenix auto accident attorneys serve car accident clients throughout Arizona. We do everything in our power to ensure you obtain the compensation you deserve, including settlement value for your car if it is totaled.

Reach out to us online or call (480) 498-8998 to schedule your free consultation to discuss your car accident insurance settlement with a qualified car accident lawyer in Phoenix, Chandler, Scottsdale, or throughout Maricopa County to be sure you receive the best possible legal representation from an experienced Arizona personal injury law firm.

If your insurance company has denied your policy claim after you are in a car accident, call us. Or, even if you are unsure of what to do after getting into a car accident and have a question about your legal rights in a personal injury case, call us.

Do you prefer to communicate with us online? You can reach us here to schedule a free initial consultation, or to ask a question to one of our dedicated Phoenix car accident lawyers.

Remember, when you need to make an insurance claim after a car accident, your insurance company is no longer your friend. Its interest is in keeping your insurance settlement value as low as possible. Make sure that you have a Stone Rose Law Arizona car insurance and car accident attorney on your side to make sure your interests get the zealous legal representation they deserve.