You often hear the term “total loss” thrown around after a serious car crash. Indeed, looking at your car, it may certainly seem like it’s a total loss. But is it?
That depends on state law. States have their own total loss laws that determine how insurance companies are required to deal with seriously damaged vehicles.
How is total loss determined in Washington?
Here in Washington, a vehicle is determined to be a total loss if its actual cash value (ACV) does not exceed the cost to repair it plus the salvage value. Let’s define a couple of those terms.
The ACV is how much the car was worth, considering depreciation and other factors, just prior to the crash. The salvage value is what it’s worth in its current state after the crash. Salvage value is basically what the scrap metal and parts are worth on the market.
Say your car’s ACV is determined to have been $12,000. The cost to repair it is estimated at $5,000. The salvage value is $8,000. Since the total repair cost and salvage value is $13,000, which is more than what the car was worth before the crash, it’s considered totaled.
So what does that mean for you? It means the insurance company is required to pay you the ACV along with taxes and title fees for a replacement vehicle. Of course, it’s rarely that simple.
Determining whether a car is totaled can be complicated
You and the insurance company may disagree about any or all of these three amounts and, therefore, whether your car was totaled. If your crash was caused by another driver and you’re relying on their insurance company for compensation for your vehicle as well as for your medical expenses, things can be even more complicated. It’s wise to have experienced legal guidance to help ensure that you’re getting the settlement to which you’re entitled.