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When Is a Vehicle Considered Totaled?

A wrecked car lays in wait after a vicious car accident. Rescue workers linger in the background.Close Up of a Broken Car WindshieldYou may have heard friends lamenting that their car was totaled. This can be a perplexing term, especially since occasions in which a car is referred to as “totaled” can range from major damage to dents or other damage that may not look that serious to the naked eye.

Insurance companies determine whether a vehicle is a total loss

So, let’s back up a minute. The term “totaled” actually derives from insurance companies. They review the amount it would cost to repair a vehicle after an accident. They will also likely consider whether repairs will allow the vehicle to pass inspection when any repairs are completed. They also consider age and other factors.

Accidents that may look relatively minor from the outside may jeopardize a vehicle’s ability to respond efficiently and consistently. Why? More and more, cars run with highly sophisticated computer equipment and within computer networks. Repairs to these are not just cosmetic. They may be very expensive to repair and may not ensure that the vehicle can pass state inspection and safety laws. If it can’t, of course, it will not be legal to drive the vehicle.

The insurance companies make an estimate of the car’s actual cash value (ACV). Essentially, that’s the amount you would receive for the vehicle were you to try and sell it to someone yourself. These values can be found on reputable sites such as Kelly Blue Book.

Then, they divide that figure by the estimated repair cost. If the cost to repair is more than the ACV, or above a threshold they have determined, the insurance will officially declare your car a total loss. You must relinquish your title and ownership.

Some states require insurers to declare a car a total loss if the damage is severe or meets certain regulations.

Common use of the term “totaled”

Some people may use the term “totaled” to refer to damage that doesn’t meet the insurance companies definition of total loss, but that will cost the vehicle owner so much to repair that, once age and safety factors are added in, it may be more cost-effective for the owner to get rid of the vehicle and purchase a newer one.

Take a situation where an individual has a $2,000 deductible on an older car, for example. It will cost the owner $2,000 before the insurance will reimburse for repairs. If the car is more than 10 years old, it may be worth less than $2,000. It is not worth it to the owner to have it repaired. The owner may use the term “totaled” even if the insurance company doesn’t officially call it a total loss.

Can your vehicle be safely repaired?

If you have been in an automobile accident that caused severe damage to your vehicle, safety is key. If the vehicle cannot be repaired safely, it is a danger to you and other drivers whether it is officially totaled or not.

The efficiency and balance of cars may be damaged by collisions. Remember that repairs are not only about restoring the look of the car. More seriously, they are about whether its safe and effective functioning can be restored.

Need an experienced car accident lawyer on Long Island?

Edelman, Krasin & Jaye have years of experiences litigating vehicle collisions and insurance payments in New York State. We can assist you in any accident. Our initial consultation is free; we will discuss your case and possible next steps. Call 1-800-469-7429 for a free consultation with an experienced New York City and Long Island car accident lawyer today.

More on what to do with your totaled car:

  1. Bonner, Marianne. “When Is Your Vehicle a Total Loss?” The Balance. November 2, 2015. https://www.thebalance.com/when-is-your-vehicle-a-total-loss-462451
  2. Kelley Blue Book. “What Is a Totaled Car?” https://www.kbb.com/what-is/totaled-car/