Accidents can cause varying levels of damage to the vehicles involved. When an insurance adjuster evaluates your car after a crash, they may decide that it is a total loss. A total loss is when the insurance company determines that it is not cost-effective to repair the vehicle. Washington state has a total loss law that requires insurance companies to use a specific formula to decide whether or not a car is totaled, and car owners have a right to see those calculations as part of their settlement.
What is the Formula for Calculating Whether a Vehicle is a Total Loss?
To determine whether a car should be totaled or not, the insurance adjuster must first calculate the actual cash value (ACV) of the vehicle. The ACV is not what the car was worth new or what it would cost to replace it. Instead, it is the car’s fair market value immediately before the accident. There are several approved ways insurers can get this valuation. The car owner can request a copy of the total loss valuation report if they have questions or concerns about how it was calculated.
Once the ACV is determined, the adjuster must establish the total repair costs and the vehicle’s salvage value. If the total of the salvage value plus the repair costs is less than the ACV, the car is considered totaled. For example, if your car’s ACV is $17,000, but the estimated cost to repair it is $8,000, and the salvage value is $10,000, then the insurance company would total your vehicle.
What Happens After Your Car is Totaled?
Once your car is totaled, the insurance company is required by law to either pay you the ACV of the vehicle, minus any applicable deductible, or replace it with a local car of a similar value. Insurance must also cover the sales tax, title, and licensing fees as part of your settlement. If you disagree with the valuation of your vehicle, you may request a third-party appraisal if your policy allows it.
If you choose to keep your vehicle after it is totaled, you will receive the ACV of your car minus the salvage value and any applicable deductibles. Remember that you must report a salvaged vehicle to the Washington State Department of Licensing within 15 days or risk being charged with a misdemeanor.
How Can a Lawyer Help You With the Claims Process?
Navigating the claims process after an accident can be complex and stressful, especially if you are still recovering from injuries. You may be concerned that your insurance company is not treating you fairly, or you might simply have questions about the process. Whatever your concerns, an experienced car accident attorney can help guide you and ensure that your rights are protected. Contact our office today to learn more: 206-678-1427.