Vehicle Total Loss: Liberty Mutual's Determination

Liberty Mutual defines a total loss of a vehicle as when the cost of repairing the damage would exceed a certain threshold in comparison to the vehicle's actual cash value. The total loss claims process involves four steps: first, an insurance adjuster reviews the damage to the vehicle; second, policyholders can rent a car at a discounted rate; third, a vehicle may be declared a total loss after estimates are back from a repair shop; and finally, the paperwork for the claim is filed and completed. The time it takes to settle a Liberty Mutual insurance claim varies, but the insurer aims to review claims and get back to policyholders within one to two business days.

The process of determining total loss

Step 1: Review Damage

An insurance adjuster will review and assess the damage to the vehicle. This may involve inspecting the vehicle in person or having it towed to a preferred repair shop or one of Liberty Mutual's Guaranteed Repair Network facilities.

Step 2: Rent a Vehicle

During this time, the policyholder can take advantage of renting a car at a discounted rate while waiting for the estimates and repairs.

Step 3: Estimate Repairs

The repair shop will provide estimates of the cost of repairs, which will be used to determine if the vehicle is a total loss.

Step 4: Declare Total Loss

If the repair estimates exceed a certain threshold, typically ranging from 50% to 100% of the vehicle's value, the vehicle may be declared a total loss.

Step 5: File Paperwork

The final step involves completing the necessary paperwork for the total loss claim. This may include submitting various documents, such as the registration certificate, surveyor report, insurance policy, claim form, repair cost estimate, and driver's license.

It is important to note that the total loss process can vary in length depending on the severity of the damage and other factors. Liberty Mutual claims representatives aim to review claims and get back to policyholders within one to two business days.

To speed up the process, it is recommended to file a timely report, have the vehicle towed to a preferred shop, locate the vehicle's title, check the loan status, research the vehicle's value, and mail any necessary paperwork as soon as possible.

Factors that determine total loss

Several factors determine whether a vehicle is a total loss, including:

• The market value of the vehicle before the accident.
• The salvage value of the damaged vehicle.
• The cost of repairs compared to the value of the vehicle before the accident.
• The state in which the accident occurred, as each state has its own rules about what constitutes a total loss. For example, North Carolina uses a threshold of 75% or more to determine fair market value before damage, while Nevada uses a threshold of 65%.
• The type of insurance coverage, which depends on the kind of loss. For example, collision coverage applies when the total loss is due to an accident with another vehicle or object, while comprehensive coverage applies when the loss is due to severe weather, vandalism, or hitting an animal.

In general, a vehicle is declared a "total loss" when the cost of repairing the damage would exceed a certain threshold in comparison to the vehicle's actual cash value. This threshold varies by state and can range from exceeding the actual cash value to reaching a percentage of the vehicle's value, typically between 50% and 100%. Some states also use a total loss formula that takes into account both the repair costs and the salvage value of the vehicle.

Total loss and constructive total loss

A total loss is when a vehicle is damaged to the extent that it is deemed uneconomical to repair it. This can be due to the cost of repairs being greater than the value of the vehicle, or if the vehicle cannot be repaired to meet safety standards.

A constructive total loss (CTL) is when the cost of retrieving and repairing a vehicle exceeds its current value.

There are several factors that determine whether a vehicle is a total loss, including:

• The market value of the vehicle before the accident
• The salvage value of the damaged vehicle
• The cost of repairs compared to the value of the vehicle before the accident
• State-specific laws and total loss formulas

Some states use a threshold, where the damage must exceed a certain percentage of the vehicle's value (ranging from 50% to 100%) for it to be considered a total loss. Other states use a formula that takes into account the repair costs, salvage value, and actual cash value of the vehicle.

The Liberty Mutual Total Loss Process

The Liberty Mutual total loss claims process involves four steps:

• An insurance adjuster reviews the damage to the vehicle.
• Policyholders can rent a car at a discounted rate.
• A vehicle may be declared a total loss after estimates are received from a repair shop.
• The paperwork for the claim is filed and completed.

What to do if Your Car is Totaled

If your car is deemed a total loss, there are several steps you should take:

• Contact your insurance company.
• Remove all personal belongings from the car.
• Clear any personal information from navigation and phone systems.
• Remove your license plates.
• Provide the insurance company with the car title and keys.
• Inform your lender about the damage.
• If you choose to keep your totaled car, you will need to repair it, ensure it passes inspection, and insure it. You will also need to provide the necessary documentation to the Department of Motor Vehicles.

Total loss insurance settlement

A total loss insurance settlement is a payout from an insurance company when a vehicle is declared a "total loss". This means that the cost of repairing the damage would exceed a certain threshold in comparison to the vehicle's actual cash value. This threshold varies depending on the state, with some requiring damage to exceed the actual cash value, and others requiring it to reach a certain percentage of the vehicle's value (ranging from 50% to 100%). Some states also use a total loss formula, which includes the repair costs and the salvage value of the vehicle.

The total loss claims process typically involves the following steps:

• The damage to the vehicle is reviewed by an insurance adjuster.
• The policyholder rents a car at a discounted rate.
• The vehicle is declared a total loss after receiving estimates from a repair shop.
• The paperwork for the claim is filed and completed.

It's important to note that the insurance claims process may vary in length depending on the type of claim and the severity of the damage. Liberty Mutual, for example, states that a claims representative will review claims and get back to policyholders within one to two business days.

To speed up the claims process and maximize the settlement, it is recommended to:

• File a timely report: Submit your claim with your insurance company as soon as possible to facilitate a quick resolution.
• Have your vehicle towed to a preferred shop: Your insurance company likely works closely with certain shops in your area for total loss claims. Taking your vehicle to one of these shops can expedite the process.
• Locate your vehicle's title: Having the title on hand is important, as it may need to be signed over to your insurer during the total loss process. If you've lost the title, file for a new one with your local DMV as soon as possible.
• Check your loan status: If you still have a remaining balance on your auto loan, you may need to pay off the remaining value. Keep in mind that your total loss settlement may not cover the full amount since payments are based on the actual cash value, not the loan payoff amount.
• Research your vehicle's value: Use resources such as local listings or Kelley Blue Book to estimate the worth of your vehicle. This can help you determine if the proposed total loss settlement from your insurer is fair.
• Mail your paperwork as soon as possible: Sending in your paperwork promptly can help resolve the total loss process quickly.

Even when following these steps, consumers may find that their settlement doesn't fully compensate them for the cost of replacing their vehicle. In some cases, this has led to legal action against insurance companies.

Liberty Mutual Total Loss Process

The Liberty Mutual total loss process includes documentation of damage, estimates of repairs, and eventually, a total loss insurance settlement. If a vehicle is deemed a total loss, a Total Loss Adjuster will contact the policyholder to explain how the value of the vehicle is determined. Once the value is established, the adjuster will provide a detailed explanation of the evaluation.

Factors in Determining a Total Loss

There are several factors that determine if a vehicle is a total loss:

• The market value of the vehicle before the accident.
• The salvage value of the damaged vehicle.
• State laws and regulations: Some states have specific laws dictating how total losses must be calculated.

Steps to Take if You Think Your Car is Totaled

If you believe your car is a total loss, here are the steps you should take:

• Contact your insurance company.
• Remove all personal belongings from the car and trunk, and clear any personal information from navigation and phone systems.
• Remove your license plates.
• Provide the car title and keys to the insurance company. If you can't find the title, contact your local DMV.
• Once the insurance company picks up your car, you may need to sign a document acknowledging their right to take possession of the vehicle.
• Contact your lender, if applicable, and inform them about the damage. Once your claim is settled, the payment will be sent to your lender.

Types of Insurance Coverage for Total Loss

The type of insurance coverage used in the event of a total loss depends on the circumstances:

• Collision Coverage: Applicable when the total loss is due to an accident with another vehicle or object such as a post, guardrail, or tree.
• Comprehensive Coverage: Covers total losses resulting from severe weather, vandalism, or hitting an animal.
• Property Damage Liability: Used when the total loss is due to an accident where another driver is at fault, and their insurance covers the damages.
• Uninsured/Underinsured Motorist: Covers a total loss caused by an accident where the at-fault driver has no insurance.

Keeping Your Totaled Car

Depending on your state's laws, you may have the option to keep your totaled vehicle. However, if you choose to drive the car, it must be repaired, pass inspection, and be insured. You will also need to provide the Department of Motor Vehicles with the title and proof of inspection.

Alternatively, if you don't intend to drive the car, you can sell it to a salvage yard, sell the individual parts, or donate it to a local charity.

Total loss and keeping the vehicle

If you want to keep your vehicle after it has been declared a total loss, you may be able to do so, depending on your state's laws. However, you will need to repair the vehicle, pass inspection, and insure it before you can drive it again. You will also need to provide the Department of Motor Vehicles with the title and proof of inspection.

If you want to keep the car but don't intend to drive it, you could sell it to a salvage yard, sell the individual parts, or donate it to a local charity.

If you decide to keep your vehicle, your insurer will pay you the car's cash value, minus any deductible that is due and the amount your car could have been sold for at a salvage yard. It will then be up to you to arrange and pay for any repairs.

If your vehicle is leased, you will receive the leased vehicle's value and will be required to make any remaining payments to pay off the lease.

Frequently asked questions