When Is a Car Considered Totaled?

Posted On February 15, 2022 Car Accidents

A car accident in Arizona can significantly damage your motor vehicle. In some cases, the car may be deemed a “total loss” by an insurance company. This means that the cost to repair the vehicle is more than the value of the vehicle itself. If you end up with a totaled car after a car accident, find out how this will affect your car insurance claim.

How Do Insurers Determine That a Car Is Totaled?

A motor vehicle that is a total loss after a car accident is not worth the money that it would take to restore it to roadworthiness. Its total pre-crash value is less than the price of the repairs needed. During an auto insurance claim, an insurance company will investigate to determine the degree of damage done to a vehicle to find out if it is a total loss.

The insurer will most likely send an insurance claims adjuster to assess the vehicle in person, as well as review estimates given by an auto repair shop. It will also consult with auto experts to determine the actual cash value (ACV) of your vehicle. Then, the insurance company will compare its value with the repair estimate. If the price of repairs exceeds the ACV, the insurer will call it a total loss.

In Arizona, the state has a threshold for totaling a vehicle at 70 percent of its ACV. For example, if a vehicle was worth $10,000 before a car accident, state law says that it is a total loss if the cost of repairs equals $7,000 or more (70 percent of $10,000). In some cases, however, an insurance company may have a lower threshold for declaring a vehicle totaled. 

A carrier may say that a vehicle is a total loss even if the repair costs are less than the ACV – sometimes, significantly less. These discrepancies can occur because it is often difficult to determine the full extent of the damage and the cost of repairs before repairs begin. 

How Much Can You Recover for a Totaled Car?

If an insurance company determines that your car is totaled after a car accident, you could be eligible to recover the total pre-crash value of your car in insurance benefits. You may need to prove the value of your car if an insurer underestimates this amount, however, such as by using Kelley Blue Book or an estimate from an auto dealer.

Next, you must find out what auto insurance is available to cover a total loss. Arizona is a fault state, meaning the driver or party that caused the crash will be responsible for paying for the related costs. If you did not cause the car accident, the other driver’s insurance company should pay to replace your totaled vehicle. 

All drivers in Arizona must carry a minimum of $15,000 in property damage liability insurance to pay for at-fault accidents. If this is not enough to cover the pre-crash value of your totaled car, your own car insurance policy may provide supplemental coverage. If you are at fault for the accident, you may need a special type of first-party insurance to pay to replace your car, such as collision, comprehensive or property damage liability insurance.

What to Do After an Accident Totals Your Car

If your vehicle gets totaled in a car accident in Arizona, contact your insurance company to see if the cost of a rental car is covered. Your insurer may require you to go to a specific rental car company for coverage. You will need to file a first-party or third-party insurance claim to seek financial reimbursement for a totaled vehicle. 

After your case is resolved, you can use the money that you get from a settlement check to purchase a replacement vehicle. If you need assistance with a case involving a totaled vehicle, contact a car accident attorney in Glendale. You may need an attorney to help you negotiate with an insurance company for fair financial compensation.