What to Do If Your Car is Totaled After an Accident?
Getting in an accident can be a very scary situation. Sometimes the damage to your vehicle is obvious and extensive. Other times, it may be shocking to hear that the insurance company considers your car totaled.
If you find yourself in an accident, it’s important to know how to tell if your car is totaled and what to do next. Our auto accident attorneys explain what to do.
How Much Damage Totals A Car In Colorado?
Is my car totaled? Colorado law § 42-6-102(17)(c)1 states that when the cost of repairing a vehicle to a roadworthy condition is more than the vehicle’s actual cash value (ACV), the car is then considered a salvage vehicle and the total loss threshold is 100%.
In addition, Colorado law § 10-4-6392 states that an insurer must pay title fees and any other transfer or registration fee associated with the motor vehicle.
However, the insurance company may declare it totaled using a lower threshold. Most insurance companies use a 70-75% threshold to determine whether to total the car based on the damage. Usually, the older the car, the more likely it will be a total loss.
What Happens When Your Car Is Totaled?
If your car is totaled, that means the insurance company decides that the vehicle isn’t worth the cost of repairs. The damage either can’t be repaired or is so significant that the insurance company doesn’t think the car is worth the time and money to do the necessary work.
Rather than arrange for repairs, the insurance company pays you for the vehicle’s value before the accident minus any deductible, and the insurance claim ends. It is up to you to make the arrangements for a replacement vehicle.
How Much Will Insurance Pay for My Totaled Car?
The cash value of your car is not the purchase price of the car. It is not the amount left on your vehicle loan, either. Instead, the current market value of the vehicle is used to determine payment.
Unfortunately, that can leave you surprised if it is less than you’re expecting. The auto insurance company will pay what it determines the car was worth (minus any deductible that applies) and cuts you an insurance check.
If My Car Is Declared a Total Loss, Can I Still Keep It?
You have the option to keep a car even if it is declared a total loss. However, once a vehicle has received a salvage title, it cannot be legally driven and must be repaired before use. Someone may want to keep a car to fix it themselves or salvage it for parts.
If you choose to keep your totaled vehicle, the insurance company deducts an amount from your payment to account for the salvage value.
If My Car Is Declared a Total Loss, Can I Still Drive It?
If your car is declared a total loss, you must return it to a roadworthy condition before you drive it. Colorado law § 42-6-102(15)3 says that a vehicle must have the power and fitness to operate on the roads with all major parts and systems permanently attached and functioning, including the:
All parts and other equipment are required by law to be present and in working order before driving on the road.
What Do Insurance Companies Do With Totaled Cars?
Most insurance companies sell totaled cars to salvage dealers. The title must be transferred to a salvage title using the Colorado Application for Salvage Title. The salvage dealer may strip any usable parts from the vehicle and then have it crushed. They may choose to repair a car but must first return it to a roadworthy condition before use.
How Do You Report a Totaled Car to the DMV?
To report a totaled car to the DMV, complete the Salvage Title or Nonrepairable Title application. The owner may apply for salvage title before transferring the title. Subsequent transfers also require a salvage certificate in the owner’s name within 60 days. See Colorado Department of Revenue, Division of Motor Vehicles, Salvage Vehicles for more details.
Do You Pay a Deductible if a Car Is Totaled?
Both collision and comprehensive auto insurance carry a deductible. The amount varies, but it’s usually between $500 to $1000. You pay a deductible when your car is totaled and you were found to be at fault. In this case, the claim would go through your own insurance company and they would subtract the deductible amount from the value of your car to resolve payment.
If the other party is determined to be at fault, their insurance should not take out a deductible before paying you. In some cases, you may have to wait for deductible reimbursement while payment from the other driver’s insurance policy is pending.
RELATED: How to Pick the Best Car Insurance
What Happens if You Total a Leased Car?
If you total a leased vehicle, the insurance company pays you for the current market value of your vehicle. However, that doesn’t relieve you of the lease agreement terms. In most cases, the value of the car will be less than the money you owe on a lease and you are responsible to cover the difference.
If gap coverage was a part of your lease agreement, then that difference is covered and you won’t have to pay out of pocket. Gap insurance is optional coverage for leased cars in the case of an accident to protect the driver from exorbitant costs. For example, if you have a lease for $30,000 and the insurance values the car at 25,000, gap insurance will cover the $5,000 discrepancy.
Attorneys for Car Accidents Involving Totaled Vehicles
If you’ve been in an accident involving a totaled vehicle or personal injuries, our auto accident attorneys can help you determine your rights and pursue your best options. Our car accident lawyers offer free confidential consultations.
Justice is our passion, and you deserve fair treatment. Contact us today to see how we can help you after a car accident.
1C.R.S. 42-6-102(17)(c). Retrieved 19 January 2022
2C.R.S. 10-4-639. Retrieved 19 January 2022
3C.R.S. 42-6-102(15). Retrieved 19 January 2022
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