When Is a Car Considered Totaled?

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.

Steps in the Insurance Claim Process

These are the basic steps in the insurance claim process from start to finish:

• Report the Accident: Make sure to provide all the necessary details, including the date, time, location, and a description of the accident. It’s crucial to report the accident as soon as possible to avoid any unnecessary delays.
• Gather Documentation: To support your insurance claim, you’ll need to gather various documents related to the accident. This includes the police report, photographs of the accident scene and damages to your vehicle, medical records if you sustained any injuries, and any other relevant documents. 
• File Your Claim: Follow the instructions provided by your insurance company and submit your claim form along with all the supporting documents. 
• Negotiate with the Insurance Company: Be prepared to negotiate and advocate for fair compensation. An experienced attorney can help you navigate this negotiation process and ensure you receive the full amount you deserve.
• Settlement or Litigation: Depending on the outcome of the negotiation process, you may reach a settlement agreement with the insurance company. This means you will accept a specific amount of compensation in exchange for closing the claim. However, if the insurance company refuses to offer a fair settlement, you may need to pursue litigation. 

How Insurance Companies Try to Take Advantage of Accident Victims Without Lawyers

To add insult to injury, unfortunately, insurance companies often try to take advantage of accident victims who don’t have legal representation. Without a lawyer by your side, you may find yourself at a disadvantage when dealing with insurance claims and settlements. 

One common tactic used by insurance companies is to pressure accident victims into accepting a quick settlement. They know that in the immediate aftermath of an accident, victims are vulnerable and may be desperate for financial assistance. Insurance adjusters will reach out to you shortly after the accident, acting friendly and concerned. However, their primary goal is to settle your claim for the lowest amount possible, often before you have a chance to fully understand the extent of your injuries and the long-term consequences they may have on your life.

Without an Arizona car accident attorney in your corner, it’s easy to fall into the insurance company’s trap. They may offer you a settlement that seems fair at first glance, but in reality, it may not cover all of your medical expenses, lost wages, and other damages. An attorney experienced in personal injury law can evaluate the true value of your claim and negotiate with the insurance company to ensure you receive fair compensation for your losses.

Additionally, insurance companies may use delay tactics to wear down accident victims and force them into accepting inadequate settlements. They may drag their feet on processing your claim, request endless amounts of paperwork, or simply ignore your calls and emails. These tactics are designed to frustrate you and make you feel hopeless, pushing you towards accepting a lowball settlement out of sheer exhaustion.

By hiring an attorney, you send a clear message to the insurance company that you will not be taken advantage of.

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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. 

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Vehicle Total Loss FAQs

As Phoenix car accident attorneys, here are some frequently asked questions we hear regarding the insurance total loss process:

• How is the actual cash value determined? 
  • The ACV is calculated by taking into account various factors such as the vehicle’s age, mileage, condition, and comparable sales in the market. Insurance adjusters typically consult industry databases and consider expert opinions to determine an accurate ACV for your vehicle.
• Can I dispute the insurance company’s valuation of my car? 
  • Yes, you have the right to dispute the auto insurance company’s valuation if you believe it is inaccurate or unfair. It’s recommended to gather evidence such as independent appraisals, maintenance records, and comparable vehicle listings to support your claim. An attorney can assist you in negotiating a fair settlement with the insurance company.
• What happens to my car if it’s declared a total loss? 
  • If your car is considered totaled, the insurance company usually takes possession of the vehicle and may sell it to a salvage yard or at an auction. However, in some cases, the insurance company may allow you to keep the car by deducting its salvage value from the total settlement amount.
• Is there a threshold for determining a total loss? 
  • The threshold for declaring a total loss varies by state and insurance company policies. In some states, a total loss is determined when the cost of repairs reaches a certain percentage (e.g., 75%) of the vehicle’s ACV. It’s essential to familiarize yourself with your state’s laws and consult with a lawyer who understands local regulations.
• Can I still drive my car if it’s considered totaled? 
  • In most cases, if your car is declared a total loss, it’s best to avoid driving it as it is most likely not safe or roadworthy. Additionally, continuing to drive a totaled car could impact your ability to claim compensation from the insurance company.
• Can I keep my totaled vehicle and repair it myself? 
  • In some situations, you may have the option to retain your totaled vehicle and repair it yourself. However, you should be aware that salvaged vehicles typically have a lower value and may be subject to additional inspections and certifications to be deemed roadworthy again.
• Should I accept the insurance company’s settlement offer? 
  • Insurance companies may offer low settlement amounts in the hopes that claimants will accept without questioning. It’s crucial to carefully review the offer and consider consulting with an attorney who can provide guidance on whether the proposed settlement is fair or if you should negotiate for a higher amount.
• Can I file a lawsuit if I’m dissatisfied with the insurance company’s handling of my total loss claim? 
  • If you believe that your insurance company has acted in bad faith or has not adequately addressed your total loss claim, you may have grounds for a lawsuit. Consulting an experienced Arizona personal injury attorney can help you understand your legal options.

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