Car accidents are scary. They often result in injury, but people they can often result in property loss as well. Serious accidents can lead to a car being considered “totaled.” When a car is totaled, it is usually too damaged to use. However, anyone left with a totaled car after an accident may have legal options they can explore.
What Does “Totaled” Mean?
When someone describes a car as totaled, it means their insurance company has considered the vehicle a total loss. This means that they believe the cost to repair the car after sustaining damage in an accident exceeds its value. The insurance company may pay the owner of the vehicle the cash value of the vehicle instead of paying them to get the vehicle repaired.
In Georgia, a car is considered totaled when the cash value is equal or less than the cost of repairs plus the salvage value. The salvage value is the cash value of the vehicle in its damaged state. For example, let’s say someone’s car was worth $16,000 before being damaged in an accident. If a mechanic values the repair cost at $7,000 and the salvage value is $10,000, there would be -$1,000 of value left in the vehicle. The actual cash value prior to the accident was less than the salvage value and repair costs combined.
What Options Are There for a Totaled Vehicle?
If an insurance company tells someone their vehicle is totaled, they have many options they can pursue. An insurance company may want that person to let them handle it, but they should review all of their options before doing so. Some options for a totaled car include:
- Leaving it alone: A car that has been labeled as totaled may still be safe to drive. A person in this situation may choose to leave the vehicle as-is rather than having it repaired. This is an option people without collision insurance may want to consider.
- Using it for parts: A totaled vehicle may have parts that are salvageable and undamaged. Someone who owns a similar car may choose to use these parts to upgrade or repair the other car. They may also consider selling the parts to someone who owns the same car and is in need.
- Donating the vehicle: Someone with a totaled vehicle may consider donating the vehicle to charity because they can claim it as a tax deduction. Many charities accept totaled cars as donations because they can repair them to give to people in need or use them for daily operations.
- Selling the vehicle to a junkyard: Selling a totaled vehicle to a junkyard is a good option for people who do not want to bother with selling or reusing individual parts. Junkyards will often pay for the vehicle and pick the vehicle up as well.
- Repairing the vehicle out of pocket: A driver can consider paying to repair their vehicle if it is considered totaled by an insurance company and they won’t pay. However, this option should be considered with caution.
Can I Appeal My Insurance Company’s Total Loss Decision?
If someone receives a decision from their insurance company that their vehicle has been considered totaled, they don’t necessarily have to accept it. There are ways in which they can fight the claim offer from their insurance company. Some of those ways include:
- Appealing the decision: Anyone unhappy with a decision from their insurance company should investigate whether they have an appeals process. Most insurers are open to an appeal to avoid a court case.
- Contact their adjuster: An adjuster is someone who acts as an advocate for the insurance company when a policyholder disputes a claim. Someone dissatisfied with their car being considered totaled may be able to speak directly with the adjuster. If so, they should make sure they bring as much information as possible. This includes a police report, photographs, and eyewitness accounts. This information can be greatly beneficial to limiting whether the adjuster believes the policyholder is at fault.
- Get an independent adjuster: An independent adjuster can be expensive. However, they will provide a client with a completely neutral assessment of their vehicle that they can show their insurance company if they appeal.
- Make a complaint: Anyone who goes through these steps with their insurance company but still feels like they have been wronged can file a complaint. This complaint can be filed with the Georgia Department of Insurance. If the department agrees that the insurance company’s assessment of the vehicle is wrong, they may act as an advocate on the policyholder’s behalf.
- Arbitration: Arbitration is a last resort option for most policyholders. It’s a legal proceeding in which both the policyholder and insurance company present information to a neutral third party. This third party will have the final say as to what award the policyholder receives. Decisions made through arbitration are usually legal binding and cannot be appealed.
How Does Arbitration Work?
Arbitration hearings can be quick and effective if each party comes prepared. An experienced attorney can help a car accident victim gather evidence and present their case to the arbitrator. A policyholder may be expected to do the following at an arbitration hearing:
- Making an opening statement
- Calling witnesses
- Cross-examining witnesses
- Providing the arbitrator with evidence that supports the request for a different settlement
- Make a closing statement