Whether a vehicle involved in a collision is considered to be “totaled” continues to be an issue many of my clients experience a great deal of confusion and frustration over. We hear horror stories about older, functioning automobiles being “totaled” simply because some seemingly minor or hidden damage occurs.
Usually, vehicles are considered to be “totaled” when the cost to repair the vehicle is higher than the actual cash value (ACV) of the vehicle. What this means is that it is not always practical to repair a vehicle, even if the cost of repair is less than its ACV. An examples would be: A vehicle worth $7,000.00 but is requiring $5,250.00 in repairs, this vehicle might be considered “totaled” by an insurer even though the cost of repair is less than its value before the accident. Insurance companies will typically consider such a vehicle to be a total loss, even though the repairs are only 75% of Actual Cash Value. Generally, the cutoff is somewhere in the 65% to 75% range.
One good thing about the vehicle being totaled, is that if there is substantial damage, there is a great likelihood that even if they had fully repaired the vehicle, it may not ever be the same. By the insurance company "totaling" it, the owner has the opportunity to get a new vehicle that will not have any ongoing mechanical problems. One of the biggest issues a person faces with the total loss situation is finding a comparable vehicle as a replacement with the payout given. Make sure you do your homework as to the value of your vehicle before accepting the amount offered.
We are often asked if clients can keep their totaled vehicle. Most of the time, the insurance company will allow our clients to keep their totaled vehicle, but will subtract the salvage value (normally 10% of the fair market value) from the amount offered. In that situation, the client surrender their title to get the total loss value check from the insurance company, and must then go through the process of obtaining a salvage title from the State of Georgia. In order to receive a salvage title, the vehicle must be inspected to determine if it is safe to drive on the roads of our state.
If you have any further questions, do not hesitate to call us at (404) 426-1529 regarding your total loss vehicle.