How to Tell When a Car is Totaled
Most Americans are familiar with the term “totaled” when it comes to vehicle damage, but how do you determine when a car is totaled? Whenever the costs of repairing damage to a vehicle exceed the vehicle’s actual value, the car is considered totaled. California uses a total loss formula to calculate vehicle damages. To find the total loss amount, you add the costs of repairs to the vehicle’s scrap value. If the sum is equal to or more than the vehicle’s pre-accident value, the driver’s auto insurance company may choose to total the car.
California state law allows you to keep a totaled vehicle if you choose to repair instead of replace it. Some states do not allow this, but if you choose to do so in California, it’s important that you keep a few things in mind. First, your car will have a salvage title attached to it. If you repair the vehicle to drivable condition, it will likely be much more difficult to insure with an attached salvage title.
You will also have to exchange your vehicle’s title for a salvage certificate at the DMV. If you restore your vehicle to drivable condition and have it professionally inspected, you can then exchange the salvage certificate for a revived salvage title. Then you can re-register a vehicle with a revived salvage title after meeting the inspection and repair requirements. However, insurance costs will likely be much higher for vehicles restored in this manner.
Insurance Complications
When you pay for your insurance policy, the premiums guarantee that the insurer will cover losses detailed by your insurance policy. However, insurance companies are in business to make money so they will typically look for any legal way to reduce claim amounts and pay out less money on policy holders’ claims.
After your car is totaled, the insurance company won’t consider your sentimental attachment to the vehicle or your ability to afford a new one. It will choose whichever legal option is cheapest for them. Under California state law, insurance companies are only liable for the actual cash value of a vehicle. When policy holders file claims for coverage, the insurance company sends a claims adjuster to investigate claims and assess their validity.
Insurance companies use various methods to calculate appropriate amounts to pay out on claims. While they indeed look for any reasons to reduce claim amounts, they still have a legal obligation to act in good faith, or process claims honestly and accurately. Additionally, insurance agents must be honest and clear when communicating with claimants. If insurance claims adjusters lie about claims, misrepresent data, or otherwise dishonestly reduce the amount of a claim, this is acting in bad faith.
Fighting Bad Faith Insurance
Confronting an insurer may seem like a daunting proposition, but with the right legal representation, you can protect your rights and collect an acceptable coverage amount. In most cases, simply issuing a letter to your insurance company explaining that you believe they have handled your claim in bad faith is enough to get a higher quote. In most cases, however, you’ll still need legal counsel.
If you feel that an insurance company is not handling your case honestly or has offered an unacceptably low quote for your vehicle, it’s important to speak to a car accident attorney as soon as possible. Having a professional who understands how insurance companies operate is a tremendous asset, especially when insurance companies rely on policy holders’ unwillingness to fight low coverage determinations. Scott Liljegren is a former insurance defense attorney, now offering his clients a unique advantage as he fights against his former employer. Don’t let insurance companies take advantage of you. Retain a San Diego injury lawyer with the experience and tenacity to stand up to big insurance companies on your behalf.