When is my car considered a total loss?
Review Your Insurance Policy – it set forth your rights of reimbursement
Your insurance policy will determine your rights to recovery. If the accident was your fault, you will need to go through your own insurance company. Make sure you give them timely notice of this claim, or you risk denial of coverage. If the accident is the fault of the other driver and that driver has insurance, you should attempt to collect the money for your vehicle’s repair from the other driver’s insurance company.
When is my vehicle considered totaled for Insurance Purposes?
Typically, a car is considered a total loss when the repair value exceeds the fair market value of the vehicle (before the accident). Insurance companies have some discretion in making this decision, and many companies will decide to total your car if the repair value exceeds 75% of the car’s fair market value. In Virginia when your car is declared a total loss, the insurance company is required to replace the vehicle (if you have that type of coverage) or must pay the fair market value of the vehicle, less any deductible.
You can negotiate the value of your vehicle with the insurance company by pointing out any after-market additions and arguing that the excellent condition of the vehicle (low mileage, new tires, etc.) warrants an increase in the offer. In addition, you should insist that the insurance company include reimbursement for applicable taxes, titling, and license transfer fees.
In determining the fair market value of the vehicle check out the website to figure out, based on the purchase year and mileage, what the retail value of your vehicle is. If your vehicle is possibly totaled, look at Edmunds to determine value. It’s important to realize that the insurance company must pay the fair market retail value of the car, not its wholesale or trade-in value. However, an insurance company may arrive at a lower value than you expect, which is why it’s important to negotiate. Generally, you should not take the insurance company’s first offer and respond with a counteroffer that is based on factual information, including alternative valuations and the condition of the car.
What is diminished value?
Virginia law recognizes the diminished value of a vehicle as a recoverable element of damages.
“Diminished value compensation” means the amount of compensation that an insurance company pays to a third party vehicle owner, in addition to the cost of repairs, for the reduced value of a vehicle due to damage.”
In addition, the term “diminished value compensation” is used in the definition of the term “salvage vehicle.” Virginia law mandates that any amount paid to the owner of a vehicle for diminished value is not included in the cost of repair of a damaged vehicle, when the cost of repair is calculated as part of the process of determining if a vehicle is, in fact, a salvage vehicle. Specifically, Va. Code Section 46.2-1600 states:
“Salvage vehicle” means (i) any late model vehicle which has been (a) acquired by an insurance company as a part of the claims process other than a stolen vehicle or (b) damaged as a result of a collision, fire, flood, accident, trespass, or any other occurrence to such an extent that its estimated cost of repair, excluding charges for towing, storage, and temporary replacement/rental vehicle or payment for diminished value compensation, would exceed its actual cash value less its current salvage value; (ii) any recovered stolen vehicle acquired by an insurance company as a part of the claims process, whose estimated cost of repair exceeds 75 percent of its actual cash value; or (iii) any other vehicle which is determined to be a salvage vehicle by its owner or an insurance company by applying for a salvage certificate for the vehicle, provided that such vehicle is not a nonrepairable vehicle.”
This law means that diminished value is recognized in Virginia law and that an owner is entitled to recover the diminished value of their vehicle after it has been wrecked. Do not allow insurance companies to convince you that you are not entitled to recover your car’s diminished value after an accident. Contact the personal injury firm of Jeffrey J. Downey for assistance.
What is Gap coverage?
Gap insurance, (also known as Guaranteed Asset Protection), bridges potential liability if you owe more on your auto loan or lease than the car is worth.
If you have this special type of coverage, it will kick in to pay the difference between your vehicle’s actual cash value and the amount you owe on your car loan or lease. However, some other costs, such as penalties on late loan payments may not be covered. So keep making your car payments until your insurance claim is resolved.
What other benefits are available when my car is damaged?
In addition to reimbursement for your damaged car, you may be entitled to a rental vehicle and the reimbursement of any items in or on your car that were also damaged in the accident. Review your insurance policy carefully and contact your insurance agent with any questions about coverage.
Protect Your Rights with a Free Legal Consultation – Call Now
Virginia personal injury attorney Jeffrey Downey has over 30 years of experience handling automobile cases. He started his career as an insurance defense lawyer, and now uses that experience to help his clients battle insurance companies. Take a look at what our clients are saying about the quality of our representation.
The firm handles cases in Virginia, Maryland, and Washington DC
McLean, Virginia Office Location:
8300 Greensboro Drive, Suite 500
McLean, VA 22102
On the web at Jeffdowney.com