“Totaled” means a total loss. A car is considered totaled when damages from an accident are irreparable or would cost more to fix than what the vehicle is worth.
Who decides if a car is totaled?
An insurer will assess the car’s pre-accident value against the likely cost of repairs. Washington is a fault state, meaning that whoever caused an accident is responsible for covering the damages that occur. If you are at fault in an accident, your insurance company will handle appraisal and compensation according to the coverage in your policy. (Note: Your insurer will only cover your damage if you have collision coverage.) If the other driver was at fault in the accident, you will be dealing with his or her insurer.
The insurer will send an appraiser to determine both the vehicle’s pre-accident fair market value and the likely cost of repairs. Per WAC § 284-30-391, once the appraiser has determined a value for the vehicle, the insurer will either replace your vehicle or offer you a cash settlement based on the value of a comparable vehicle in the same area.
How does the insurer determine that value?
State law [WAC § 390-05-235] defines “fair market value” as the amount a well-informed buyer under no obligation to purchase a vehicle would reasonably pay a well-informed owner who is not required to sell. The insurer bases this largely on sales data for comparable cars in your area, meaning those that are of similar make, model year, body type, condition, and mileage.
Washington State law requires insurers to calculate fair market value using at least one of the following methods:
- Examining prices on comparable vehicles in the surrounding area. The insurer may use a third-party service to acquire this data.
- Obtaining quotes on comparable vehicles from two or more licensed dealers within 150 miles of where your car is stored
- Checking prices on comparable vehicles advertised in local media
- Consulting computerized data on comparable nearby vehicles
Car owners can then request a “total loss valuation report” from the insurer, which will contain the data used in calculating the fair market value. Washington State law requires insurers to use a “total loss formula,” where the cost of repairs plus its probable value as scrap must equal the vehicle’s value pre-accident value for it to be a total loss.
How do I get my settlement?
If you agree with the assessed value of the car, the insurer will offer to replace your car with something similar in value that is available nearby or pay you a cash settlement, according to rules outlined in WAC 284-30-391. The settlement offer will include the following:
- The vehicle’s fair market value immediately prior to the accident
- Sales tax on the car’s fair market value
- Any other fees you would have paid if you purchased the vehicle immediately prior to the accident
What if I do not agree with the insurer about the value of my vehicle?
If it is your own insurer, you can hire an outside appraiser if your collision policy allows it. If the other driver was at fault, and you believe his or her insurer is incorrectly valuing your car, you can file a claim with your own insurance company, which will pay your settlement. Then, if it so chooses, your insurer will seek compensation from the at-fault driver's insurance company.
Can I keep my car even if it is totaled?
Yes. If you keep your totaled car, the insurer will then subtract the salvage value from the settlement. You or your insurer must then notify and report the totaled vehicle to the Washington State Department of Licensing. (Failure to do so within 15 days is a misdemeanor.)
Where can I get more help with this?
Dealing with the insurance company can be a hassle. For help navigating the claims process or understanding your insurance settlement offer, contact a car accident attorney at Max Meyers Law, PLLC in Kirkland today: 425-399-7000. The initial consultation is free and we do not charge a fee until you win a settlement.