A car accident can result in some serious damage to your vehicle, with the most critical damage being declared a total loss. The good news is that you may be able to recover damages to cover you for vehicle damage with the help of a car accident lawyer. However, things can become complicated if the damage to your vehicle is extensive.
When you suffer vehicular damage in a crash, your insurance company will inspect the vehicle. This is done to determine the extent of damage and the nature of losses. Following this inspection, the insurance company makes one of the two determinations:
- The vehicle can be repaired and the cost of repairs is not prohibitive. In such a case, the company will reimburse you for the expected costs of repairs.
- The cost of repairs is prohibitively steep which means that repairs are not a viable option. In this case, the insurance company deems your vehicle a total loss.
What is Total Loss?
Total loss is when your vehicle has severe and extensive damage, so much so that having it repaired costs more than half the actual value of the vehicle itself. When an insurance company declares an accident vehicle total loss, you are no longer paid for repairs. Instead, the company pays you for the total loss of the car. In other words, you receive the Actual Cash Value (ACV) of the vehicle.
What is Actual Cash Value (ACV)?
The ACV is the actual value of your vehicle just before the accident took place. An insurance company may use a number of factors, as well as a number of standard methods, to make this calculation. The factors typically considered by the company in determining ACV include:
- The age and make of the vehicle
- Mileage of the vehicle
- Condition of the vehicle before the accident
- Any add-ons and extra features on the vehicle
- The value of other comparable vehicles of same make, age and condition
- Any recent repairs, maintenance, or other services performed on the vehicle
These factors are used to reach an accurate estimation of the actual value of your vehicle just before it was totaled in the crash. However, an insurance company may not always make you a fair cash offer for a total loss vehicle. This is when you should negotiate with the company with the help of a good car accident attorney.
How is Total Loss Determined?
Total Loss is determined by first calculating the estimated costs of repairs. If these costs exceed a certain threshold, then the vehicle is deemed total loss. The threshold percentage varies from one insurance company to another and from one state to another.
On average, the Total Loss Threshold, also known as TLT, is between 50% and 70%. This means that if the repair costs are 50% or more of the Actual Cash Value of your vehicle, the vehicle is deemed as Total Loss.
In contrast to the average TLT stated above, Florida has an exceptionally high TLT. The Total Loss Threshold in Florida is 80% as per the state laws. This means that when the repair costs of your accident vehicle are 80% or more of its ACV, the vehicle is deemed Total Loss.
For instance, if the ACV of your vehicle was $15,000 just before the accident and the insurer estimated that repairs would cost $10,000, your vehicle is not a Total Loss. This is because repairs are nearly 67% of the ACV. On the other hand, if the repairs cost $12,000 or more, then the Total Loss Threshold is met. In such a case, the vehicle can be declared a Total Loss by the insurer.
What Happens When a Vehicle is Declared Total Loss?
In most cases, the vehicle is taken to a salvage yard and stored there. You have the opportunity to retrieve your belongings and license plate of the vehicle. You then sign over the title of the car and hand over its keys in exchange for a check of the agreed amount. At this point, you may also be required to sign a property damage release.
Hiring a Car Accident Lawyer in Fort Lauderdale, FL
If you have suffered a car crash in Fort Lauderdale involving Total Loss, we can help you. We understand that having your vehicle replaced at the whim of an insurance company may not be something you want. The insurer may also try to underpay you for a vehicle’s repair or replacement. Here at Englander Peebles, we prevent this by providing you sound legal help and advice through the process. Get in touch with us today to discuss your crash details with our lawyers.