What Happens When My Insurance Declares My Car as a Total Loss?
After you have been involved in a vehicle accident, you want to get your car back up and running on the road. But sometimes, an insurance company can declare your vehicle a “total loss.” What is a total loss, and what does that mean for you? Let’s look at the claims process in Kentucky and see what happens after a vehicle is considered totaled.
Starting the Claim Process
After an accident, you will probably contact your insurance company to file a claim. Today, you can handle these issues through a mobile app, the company’s website, or over the phone. All you have to do is provide a few details, such as what happened, when it occurred, and the other parties involved.
Once that is completed, you move to the next stage: an inspection by a claims adjuster. During this stage, they will examine your car and assess the extent of the damage. Generally, you will receive an initial estimate.
Most of the time, the vehicle has to be inspected by an authorized repair shop to conduct a full inspection of the vehicle. After the claims adjuster has received all the information, you will get an answer.
You will either get an estimate to complete the repair or receive news that the car is now totaled. If it’s the latter, what does that mean for you?
What Is a “Total Loss?”
During the inspection process, there could be underlying issues with the vehicle. For example, you might just see a slight dent in the bumper, but in reality, there is major damage to the safety systems and even the vehicle’s frame. Making repairs would not be feasible from the standpoint of the auto carrier.
When insurance companies decide that repairing a vehicle will exceed its actual cash value (ACV), they can declare it a “total loss.” The ACV is calculated based on the car’s age, make, model, condition, and mileage. The Commonwealth of Kentucky has a specific percentage known as the Total Loss Threshold (TLT).
According to KRS 186A.520 (1), insurers are required to declare a vehicle as a total loss if the estimated cost to repair the vehicle exceeds 75% of its actual cash value (ACV).
Unfortunately, the ACV does not always equate to the vehicle’s replacement cost or the amount you paid for it. You can lose money if the insurance company totals your vehicle in these instances.
What Happens Next in the Process?
After the insurance company has declared your vehicle a loss, they offer you a settlement for the car. In most cases, this is the actual cash value. Adjusters will typically make an offer based on previously mentioned factors and local market prices.
Keep in mind that you may not get the total amount of the settlement. Any deductibles and fees will be taken out of the amount. Almost all insurance policies have some deductible, usually between $500 to $1,000.
Once the insurer has settled with you, they will take possession of the vehicle. You will usually have a chance to retrieve any personal belongings from the car if it is at a local repair shop. However, some settlements may reimburse you for those damaged or lost items. After this point, the insurance company will take your vehicle and sell it for salvage.
Unfortunately, you may still be responsible for payments if you have money owed on the loan. Often, the settlement the auto carrier offers does not cover the full loan balance. However, if you have gap insurance, this can cover any difference between the remaining loan and the settlement amount.
Can I Keep My Totaled Car?
In some states, you can keep the total car, but you might encounter a few difficulties. In Kentucky, you can negotiate for a partial total loss settlement, meaning you will receive a payout minus your vehicle’s salvage value.
You can get a salvage title if you want to rebuild the vehicle. With that, you will need to have it inspected to make sure it is safe for the road. If the car passes the inspection, you can get a reconstructed title. Keep in mind that many insurance companies are reluctant to insure these vehicles, meaning you may not be able to find a policy to protect your car on the road.
Finally, after looking at the vehicle you decide to sell it, you will need to contact the county clerk’s office. You will have to provide the office with your title and license plates. If you fail to do this step, you might have to continue to pay property tax on the vehicle.
Dealing with auto carriers can be stressful, especially if they make a decision that doesn’t seem fair to you. Not all insurers have your best interests at heart. Sometimes, they may fail to pay injury claims, even if you were eligible. You may need to speak to an insurance bad faith attorney in Lexington, KY in these cases. At the Golden Law Office, our experienced attorneys have helped accident victims and their families get the justice and compensation they deserve, including when dealing with insurers who employ bad faith practices.
Golden Law is a local, Kentucky Law Firm, attorneys/lawyers in Fayette County, Kentucky, working in the fields of personal injury, auto accidents, car and truck wrecks; medical malpractice: doctors, hospitals & nursing homes; senior living abuse: neglect, physical abuse, emotional abuse, dehydration, bedsores, catastrophic injuries, and broken bones. If you are considering a lawsuit, call us at 859.469.5000 for a free consultation. We are located at 771 Corporate Dr. Suite 800/ Lexington, Kentucky 40503. We handle cases all over the Commonwealth of Kentucky. We have represented and trained people in major insurance companies & major trucking companies. We have first hand experience and know the ‘inside of the insurance business’ … that’s a distinction that no other law firm can make. We’re Your Advocate. Dale Golden, Laraclay Parker.
