You may be familiar with the word ‘totaled’ from researching insurance policies or following a car accident. Understanding what totaled means, and how it’s decided, is important to know as you navigate an insurance claim.
What Is a Totaled Vehicle?
A totaled vehicle refers to a damaged car that costs more to repair than its total value. This threshold may vary between states, but many states have a 75% threshold. This means that if the cost to repair your vehicle following an accident is within 75% of its value, it’s considered totaled. In some states, the insurance company may decide on a case-by-case basis if a car should be totaled or not.
Keep in mind that this refers to vehicles that have full coverage, or comprehensive and collision coverage. A car with a minimum insurance policy typically won’t cover damages through a traditional insurance claim. A full-coverage policy costs more per month, especially on higher-value vehicles.
What Happens After a Car is Totaled?
If you’re in an accident, and your insurance company deems your vehicle as totaled, this means they may replace it. When you submit an insurance claim, the insurance adjuster will consider the damages and the cost to repair them, and the total value of your vehicle. They will compare the repair costs with the value, and if it’s beyond the threshold, they’ll consider the vehicle totaled.
Then, they’ll issue a payment equal to the value of your vehicle. If you have a loan, they may submit payment directly to the lender. If your car is paid off, they will likely send you a check.
From here, it’s up to you what you do with the vehicle. If it’s unrepairable or unsafe to drive, you may allow the insurance company to get rid of it. Some insurance companies may allow you to buy it back from them for a discounted price, but this also means it comes with a totaled title, which means it’s not worth as much and may be impossible to insure.
What Happens If I Owe More on the Vehicle Than it’s Worth?
If your car loan is higher than the total value of your car, it’s possible that you’ll be responsible for out-of-pocket costs. For this reason, if you own a car with a loan that’s higher than its value, you may consider purchasing a separate, GAP insurance policy. A GAP insurance policy covers the difference between the value of the car and your loan amount.
Who is Responsible for the Deductible?
When you file a claim, you are responsible for paying a deductible. This amount varies, depending on your policy and the amount you previously agreed to. If you’re deemed to be at fault, you’ll have to pay your deductible. If no one is at fault, such as a tree falling on your car, your comprehensive coverage may cover the deductible.
If another driver is responsible for the accident, your insurance company may bill the other driver’s insurance and deduct any payout from your deductible, reducing what you owe.
Contact a Linwood Personal Injury Lawyer to Discuss Your Car Accident Case in New Jersey
Did you or a loved one sustain serious injuries due to a car accident in New Jersey? Don’t let the medical bills pile up while you wait for the negligent party or their insurance company to do the right thing. Right now, you need an aggressive personal injury attorney on your side, fighting to get you the compensation you need, want, and deserve. The skilled attorneys at The Law Offices of Richard A. Stoloff represent clients injured because of a car accident in Somers Point, Pleasantville, Atlantic City, Hamilton, and throughout New Jersey. Call (609) 601-2233 or fill out our online contact form to schedule a free consultation about your case. We have an office conveniently located at 605 New Road, 1st Floor, Linwood, NJ 08221, as well as an office in Philadelphia, PA.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.