You\u2019ve likely heard the word \u201ctotaled\u201d used when referring to car accidents. While you may think it merely refers to the fact that a vehicle was \u201ctotally\u201d destroyed in an accident, a \u201ctotaled car\u201d actually refers to the value of the vehicle and the cost of repairs.<\/p>\n\n\n\n
Specifically, if a car is \u201ctotaled,\u201d it means the cost of repairing it is more than its actual (total) value. As such, it would be more expensive to rehabilitate the damaged vehicle than it would be to purchase a replacement.<\/p>\n\n\n\n
An auto insurance company would deem a car totaled if the estimated repair costs exceed the vehicle\u2019s market value (also referred to as book value). This requires calculations on the insurer\u2019s part, and each state has different regulations that insurers must abide by when making estimations.<\/p>\n\n\n\n
In the state of New Jersey, an insurer would consider a vehicle totaled if the vehicle\u2019s\u00a0actual cash value (ACV)\u00a0is less than the repair bill. New Jersey guidelines state: \u201cActual cash value (ACV) is the amount your vehicle would have sold for on the date of the accident.\u201d<\/p>\n\n\n\n
It may be economically impractical to repair a vehicle when it\u2019s considered \u201ctotaled.\u201d It\u2019s important to note, too, that insurers may consider a vehicle totaled if the costs of repairing it amount to only 80% of its actual cash value (ACV) (rather than 100% or greater) because there may be hidden or unforeseen repairs and additional costs. This stipulation is referred to as the \u201ctotal loss threshold.\u201d<\/p>\n\n\n\n
In the end, actual cash value (ACV) depends on the specific make and model of a car, how many miles it has on it, its overall condition, and its potential salvage value, among other factors.<\/p>\n\n\n\n
If you\u2019ve\u00a0shopped for auto insurance\u00a0before, you\u2019re aware there are several different types of policy. When it comes to covering the costs of a totaled car, four\u00a0types of auto insurance\u00a0may cover a driver:\u00a0collision,\u00a0comprehensive, property damage liability, and\u00a0uninsured motorist.<\/p>\n\n\n\n
Collision and comprehensive insurance policies cover a range of potential issues with a vehicle, including car accidents, collisions with animals, and falling trees. Accordingly, a totaled car would likely be covered under one of these policies, although it\u2019s never guaranteed.<\/p>\n\n\n\n
If you are in an accident and the other driver is at fault, that driver\u2019s property damage liability coverage should also cover the costs of your totaled car (assuming they\u2019re insured). And uninsured, or underinsured, motorist liability should cover you if the other driver is not insured \u2013 assuming your insurance policy includes this coverage.<\/p>\n\n\n\n
There will be some back-and-forth communication after an accident as your insurance company and the other involved parties sort out the details. However, if your car is declared a total loss, your insurer will likely offer a settlement (a cash payout) based on your vehicle\u2019s value, minus any applicable deductibles.<\/p>\n\n\n\n
Here is some insight into the expected process: You\u00a0file an insurance claim, an adjuster inspects the vehicle and determines whether it\u2019s a total loss, and, if yes, your insurer will contact you with a settlement offer. If you accept, the insurer will send you a check for the amount you agreed on.<\/p>\n\n\n\n
You can also try to fight for a higher settlement price by getting your own appraisal and submitting a counteroffer. You can even hire an attorney if you feel it\u2019s warranted.<\/p>\n\n\n\n
If an insurer determines that your car is totaled, you still have options:<\/p>\n\n\n\n
For most people, the simplest course of action may be to accept the settlement check, but there are additional options.<\/p>\n\n\n\n
An insurer will typically send you a check for the agreed-upon settlement price. You should note that\u00a0insurance deductibles\u00a0may be applicable. This could knock down the payout, and if you don\u2019t own your car fully, for example if you lease it or still owe money on an auto loan, there may be deductions from the total payout amount.<\/p>\n\n\n\n
You can negotiate a total loss, but it would require you to hire an appraiser and do your research into the fair market value (or actual cash value) of your vehicle. This may require a lot of legwork and could even require legal assistance from a lawyer.<\/p>\n\n\n\n
You can keep a totaled vehicle; some vehicles that are \u201ctotaled\u201d may still be drivable. It\u2019s your car, after all, and you can decide what to do with it. However, if the vehicle is not drivable, you will need to find ways to transport and store it, which may not be easy or cheap.<\/p>\n\n\n\n
In the simplest terms, the total value of a totaled vehicle is calculated by subtracting the estimated repairs to the vehicle from its actual cash value, or market value. If the estimated repairs are greater than the market value (or, in New Jersey, they amount to 80% of its market value), the vehicle is considered a total loss.<\/p>\n\n\n\n
Deployed airbags do not necessarily mean that a car is totaled because airbags can be replaced. Again, determining whether a car is \u201ctotaled\u201d comes down to whether the overall repairs needed to restore it to pre-accident condition are greater than the vehicle\u2019s pre-accident market value.<\/p>\n","protected":false},"excerpt":{"rendered":"
You\u2019ve likely heard the word \u201ctotaled\u201d used when referring to car accidents. While you may think it merely refers to the fact that a vehicle was \u201ctotally\u201d destroyed in an accident, a \u201ctotaled car\u201d actually refers to the value of the vehicle and the cost of repairs. Specifically, if a car is \u201ctotaled,\u201d it means […]<\/p>\n","protected":false},"author":1,"featured_media":1175,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"_links":{"self":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/1174"}],"collection":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1174"}],"version-history":[{"count":1,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/1174\/revisions"}],"predecessor-version":[{"id":1176,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/1174\/revisions\/1176"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/media\/1175"}],"wp:attachment":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1174"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}