Everything You Will Need to Know if You Ever Hear the Dreaded Words “Your Car is Totaled”
Updated: Aug 23, 2021
Crashed your car? Bummer. Even worse is getting a call from your auto insurance company saying it's a total loss. It stinks - whether it’s because you really love your car or because you can’t afford (or don’t want) to buy another car. If you’re still paying on your car and don’t have gap insurance, the financial set-back is even worse.
WHAT DOES TOTAL LOSS MEAN?
What does “total loss” mean? In South Carolina, vehicles are totaled when the damage exceeds 75% of the vehicle's fair market value (FMV). See, South Carolina Department of Motor Vehicles, Total Loss Claims. Sounds simple, right? It’s not. To start, there’s no magic formula to calculate FMV. The older your car is, the more you are at risk for your car being totaled in an accident. It is also common for car models that don’t tend to hold their value very well.
WHAT ARE MY OPTIONS?
You might think that your only option is to accept the insurance company’s decision to total your car. We’ve got good news. Just because the insurance company wants to total your car doesn’t mean you have to accept their decision.
Convince the insurance carrier your car isn’t a total loss. If you think your vehicle is valuable enough to justify a repair, you can contest your insurance company's decision to declare it a total loss, but be prepared to spend a good amount of time doing hour homework. If you are successful at getting enough evidence and disputing the decision, you may be able to convince the insurance company to repair your car instead of totaling it.
Relinquish your totaled vehicle to the insurance carrier, and make sure they pay you a fair price. Even if your vehicle is a total loss, the insurance carrier is supposed to pay the FMV of the vehicle, minus your deductible. You will want to do your homework to make sure they aren’t undervaluing your car.
Keep your totaled vehicle. If you decide to accept the insurance carrier’s decision to total your car but you still want to keep it, the insurer will pay you the FMV of your vehicle, minus your deductible, and the amount your car could have been sold for at a salvage yard. It then will be up to you to arrange to make repairs on your own.
Get an expert on your side. Our firm works with one of the most experienced property damage experts in South Carolina. The opinion of a highly qualified and experienced expert can be a game changer in calculating value and negotiating a property damage claim. This also insulates our clients from the insurer, so they don’t have to worry about saying something that might hurt their personal injury case. We can handle everything for you, even communications with the body shop, so you can focus on getting well.
Arbitration. If all else fails, in South Carolina you are legally entitled to have your property damage dispute with the insurance carrier arbitrated by a panel of three attorneys. See, South Carolina Department of Insurance, Arbitration Guide. This is a much less formal, simpler, and quicker process than litigation. Still, like litigation, preparation is key.
SHOULD I KEEP MY TOTALED VEHICLE?
Only you can decide whether repairing your totaled car is worthwhile. It’s a good idea to figure out the pros and cons of either letting your insurer keep your totaled vehicle and pay you the FMV minus your deductibles, or keeping your totaled vehicle to repair it on your own and accept a lesser payout from the insurer. In the end, it comes down to your individual circumstances.
No matter what, safety should be your primary concern when deciding whether to keep a totaled vehicle. If the damage is mostly cosmetic, you may be able to put it back into service for a modest cost. But, cars are complicated. Damages are not always visible. Once the body shop starts dismantling a vehicle, they often find additional damage. There can be cracks in the frame or damage to airbags. Make sure your vehicle is inspected by a repair shop you trust.
After the repairs are completed, the title will need to be changed from “salvaged” to “rebuilt” by the South Carolina Department of Motor Vehicles (SC DMV). See, South Carolina Department of Motor Vehicles, Salvaged Vehicle Regulations. Still, it might be difficult, but probably not impossible, to get insurance for a vehicle that was previously declared a total loss. It will likely not be possible to get collusion or comprehensive coverage.
It might be hard to sell your car in the future. The federal government has established a database called the National Motor Vehicles Title Information System. All total losses are recorded by the insurance companies in this database. The purpose is to provide consumers with a database to see if a car has been previously salvaged.
HOW IS FAIR MARKET VALUE CALCULTED?
Your insurance company will determine your vehicle’s FMV based on software that isn’t available to consumers or even to attorneys. However, you do have the right to receive a breakdown of the basis for their FMV calculation. Review it thoroughly to determine if they have included all options and upgrades on your vehicle. After you verify that they are using complete and accurate information about your vehicle, you should research the FMV for yourself.
There are several websites that are considered standard in the industry when it comes to calculating a vehicle’s value. The most commonly used websites are Kelly Blue Book, National Automobile Dealers Association Used Car Guide (NADA), and Edmunds. You will need to have your vehicle’s year, make, model, trim, mileage, and any optional equipment. Each of these websites will give a range that your vehicle is worth. It’s a good idea to calculate the average value from all three of these sites.
Another way to calculate the FMV of your vehicle Is to research comparable vehicles for sell and their proximity to your house. Again, the internet is a great source of information. You can search websites like Cars.com, AutoTrader.com, TrueCar.com, and Carvana and sort the results by the proximity to your zip code. You should save all of the details from your search, including VIN numbers for each comparable vehicle that you find. You might find it is helpful to organize this information using a spreadsheet. Feel free to use this one that we used for a recent client at our firm.
You may also be able to present extenuating evidence that the value of your car is higher than estimated for some reason. It might be in exceptional condition or have extremely low mileage for the year it was made. If you can demonstrate good maintenance and mechanical improvements, you may be able to win your totaled car a reprieve.
After doing your homework, you might be able to persuade the insurance company that their valuation is too low. You can try to talk to the adjuster or it might be worth asking for their supervisor. It’s important to make sure the valuation of your vehicle is fair, whether or not the insurance carrier agrees to fix your vehicle, because the valuation is also what your payout will be based on. It’s a good idea to also present your case in writing. Feel free to refer to this letter that we recently sent on behalf of a client at our firm.
HOW IS SALVAGED VALUE CALCULATED?
If your vehicle is totaled, you have the option of accepting less money from the insurance company and keeping your car. The salvaged value, and your deductible, are subtracted from the FMV to determine how much you are paid if you keep your vehicle. In order to know if you are getting a fair offer, you need to understand how the salvage value of your vehicle is calculated. The salvage value of your vehicle is the value that would be received if the insurance company sold it to a salvage yard for its parts and frame. Every insurance company will use its own formula for calculating the salvage value of a vehicle. It is generally based on the costs of disposing of the vehicle and past auction values for salvaged vehicles. A general rule of thumb is ten to twenty percent of the FMV.
WE WANT TO HELP!
One of the most frustrating things to deal with when you are in an accident can be damage to your vehicle. Shamefully, many law firms will not help their personal injury clients with their property damage claim. Frankly, we do understand. It’s a big headache and not very profitable. The problem is this leaves clients on their own, because they most likely won’t be able to find another lawyer to handle only the property damage part of their claim. The other problem is insurance companies know that most lawyers won’t involve themselves in property damage claims. Because of this fact, insurers have learned they can get away with low ball offers.
We detest seeing someone get taken advantage of, especially by a large corporate insurance company. So, unlike these other law firms, we will happily handle property damage claims for our personal injury clients. We work closely with one of the most experienced and respected property damage experts in South Carolina. We take a stand when it comes to your property damage after a car wreck, because we believe it’s the right thing to do and it’s how we would want to be treated.
If you have questions about your property damage claim or want to speak to Attorney Adkins because you were injured in an accident, please do not hesitate to call or text us at: (843) 330-7687. Learn more at: www.palmettostateinjurylawyers.com