If motor vehicle damage from a car accident is severe enough, the car will be deemed “totaled.” This means it is a total loss, or the cost of repairing it exceeds the total value of the vehicle. If your car gets totaled in an automobile accident, your auto insurance company will pay the actual cash value of the vehicle – if you have the right type of insurance.
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 worth of the vehicle in its current (post-accident) state.
For example, if the actual cash value of a vehicle is $10,000, its salvage value is $6,000 and it would cost $5,000 to repair, the equation would look like this: $10,000-$5,000-$6,000 = -$1,000. Since the equation came up with a negative amount, the car would be considered totaled under Arizona’s insurance laws.
When a car accident occurs in Arizona, a damaged or disabled vehicle will be taken to an auto repair shop. Often, the car is taken to a mechanic that has been approved by the owner’s 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 insurance company will deem it a total loss.
If you are told by an insurance company that your vehicle is totaled, you will need to determine who is responsible for paying for a replacement. If you did not cause the accident that totaled your car, the at-fault driver’s insurance company will write you a check for the pre-crash value of your vehicle.
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 this coverage for your totaled vehicle, you or your Scottsdale car accident attorney must prove that the other driver is more at fault for the crash than you are.
If you are found to be responsible for the accident that totaled your car, you may still qualify for coverage. However, you will need the correct type of coverage on your own insurance policy to pay, such as collision 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. Once you receive a check 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 Scottsdale today to determine your legal options following a collision that leaves you with a totaled vehicle.