Total Loss Vehicle: Insurance Release Timing

When a car is deemed a total loss by an insurance company, it means that the cost of repairing the car exceeds the car's value, or the car is unsafe to drive even after repairs. In most cases, the owner will transfer the title of the vehicle to the insurance company, and the insurance company will pay the owner the fair market value of the car. However, the owner has the right to retain the vehicle, but it is important to note that the car usually cannot be repaired and used on the road again. The process of dealing with a total loss vehicle involves filing an insurance claim, towing the vehicle to an approved body shop, gathering relevant documents, researching the car's value, and starting to shop for a new car.

When to keep a total loss vehicle

Keeping a total loss vehicle is an option, but it is not always a good idea. If you decide to keep your car, the insurance company will pay you the market value minus the amount they would have received from selling it to a salvage yard and any deductible due. You will then need to arrange and pay for any repairs yourself.

There are several reasons why keeping a totalled car is not always the best option. Firstly, it can be difficult and expensive to insure a vehicle with a salvage title. Secondly, it may cost more to repair than the original estimate, and once repairs are underway, further damage may be discovered. Thirdly, a salvage or rebuilt title will make it harder to dispose of the vehicle in future. Finally, keeping a totalled car can be time-consuming and require a lot of effort, including a state inspection and securing a special car title.

However, there are some upsides to keeping a totalled car. If it is an older car with low market value, it may only have cosmetic damage that is cheap to fix. You can also use it for parts for other restoration or repair projects.

When to sell a total loss vehicle to a junkyard

A total loss vehicle is one where the cost of repairs exceeds the vehicle's value. This can be the result of an accident, flooding, or other severe weather. If your car is a total loss, your insurance company will usually pay you the pre-accident value of the vehicle, minus your deductible, and then sell the car at auction.

If you don't have insurance, or your insurance won't cover the total loss, you may want to sell your vehicle to a junkyard. Here are some steps to follow when selling a total loss vehicle to a junkyard:

Make Sure You Have the Right Documentation

You will need the title of the vehicle to sell it to a junkyard. If you've misplaced the title, you can obtain a replacement by contacting your state's DMV or BMV. If your car carries a lien, it cannot be sold to a junkyard.

Research Junkyards and Get Multiple Offers

Look for junkyards online or in local directories, and pay attention to reviews. Contact several junkyards and provide them with the details of your vehicle, including the make, model, year, and type of damage. Based on this information, they will make you an offer if they are interested.

Prepare the Vehicle for Pickup

Remove all personal belongings from the car. If the vehicle is still driveable, you may be expected to deliver it to the junkyard. If not, the junkyard should come to pick it up at no cost to you.

Complete the Sale and Necessary Paperwork

Once you've accepted an offer, the junkyard will schedule a time for pickup and inspection of the vehicle. After inspection, you will receive payment, and you will need to sign over the title to the junkyard.

Follow Up with Your State DMV or BMV

In some states, you may be required to report the sale of your vehicle. Be sure to research your state's guidelines and complete any necessary paperwork to protect yourself from liability.

Consider Other Options

Selling to a junkyard may not be the most profitable option. You may want to consider selling to private buyers or online buyers, which can result in a higher payout but may involve more work.

When to transfer ownership of a total loss vehicle

If your car is a total loss, you have the right to keep it in most cases. However, it's important to note that a total-loss car usually cannot be repaired and used on the road again. If you decide to keep it, the insurance company will deduct the salvage value of the vehicle from the settlement amount.

If you don't keep your vehicle, you will need to transfer ownership of your car to your insurance carrier so that they can dispose of the salvage. In return, you will receive a settlement, the amount of which will depend on the actual cash value (ACV) of your car.

The ACV is calculated based on the car's market value at the time of the accident, taking into account factors such as depreciation, mileage, condition, and any upgrades. Once you agree on the fair market value for your totalled vehicle, it's time to transfer ownership to the insurance company.

To do this, you will need the physical copy of your title. If you own your car outright, the car title should be in your possession. If you are still financing your vehicle, the loan company should have your car title. Once the title is located, you and the insurance company representative will need to fill in and sign the relevant sections.

It's important to remember that once the title is transferred, you no longer own the car. Therefore, if you believe the insurance company's offer is too low, you should not accept it. The fair market value of your car should take into account the model year, make, mileage, and condition of your vehicle. If you are offered an insurance settlement that does not reflect the fair market value, you should continue to negotiate your insurance settlement while the title to the car is still in your name.

When to dispute an insurer's valuation of a total loss vehicle

If you disagree with your insurer's valuation of your vehicle, you can dispute it. Here are some steps you can take:

Gather Evidence:

Firstly, you need to prove that your car was valuable and well-maintained. This includes collecting receipts and other proof of upgrades, add-ons, and customizations. You should also have any relevant documents from the car's previous owner.

Research:

Find evidence that your insurer undervalued your vehicle. Start by checking the Kelley Blue Book to calculate your car's value based on its condition and your location. You can also look for similar vehicles for sale online or in your local area to get an idea of their market value. Additionally, consider getting a repair quote from a mechanic. Remember that the value of your car is based on its resale value, not what you paid for it.

Submit Your Evidence:

Present your research and supporting documentation to your insurance company. Compare the values of several different comparable vehicles in your area and do your own calculations to determine what you believe is your car's true value.

Request an Appraisal:

Check your insurance policy to see if it guarantees you the right to an independent appraisal. If so, your insurance company will hire an appraiser to inspect your vehicle. If you don't get your own appraiser, the insurance company's valuation will stand. If both appraisers are unable to agree on the value, a third-party "evaluation umpire" will be brought in to make a final determination.

Negotiate:

Remember that your insurance company has the power to declare your vehicle a total loss, but you can exercise some power by refusing to settle right away. Insurance adjusters are often under pressure to settle cases quickly and may have some discretion to increase the settlement amount. Present compelling evidence and be prepared to wait to show that you're not in a hurry to settle.

File a Complaint:

If you believe your insurer has acted in bad faith by making an unreasonably low offer, you can file a complaint with your state's Department of Insurance. They will investigate your claim and may mediate the issue.

It's important to note that the process of disputing an insurer's valuation can be time-consuming and costly. Consider the costs and benefits before proceeding, and don't hesitate to consult a lawyer if you have questions about your rights and options.

When to start looking for a replacement vehicle

When your vehicle is declared a total loss, the insurance company will reimburse you for the actual cash value (ACV) of the car. This is the fair market value of the vehicle at the time of the accident, minus any deductible and fees. The ACV is calculated by assessing the vehicle's market value and the extent of the damage.

Once you have received the settlement from the insurance company, you can start looking for a replacement vehicle. It is important to note that the settlement amount may not be enough to cover the total cost of a new vehicle, so you may need to use it as a down payment. Here are a few steps to consider when starting your search for a replacement vehicle:

• Determine your budget: Calculate how much money you have available to spend on a new vehicle, including the settlement amount and any other savings or financing options.
• Research different vehicle options: Look for vehicles that fit within your budget and consider factors such as make, model, age, mileage, and features. You can use online tools and websites, such as Kelley Blue Book, Edmunds.com, or local dealerships to compare prices and find the best option for you.
• Compare insurance costs: When considering different vehicles, don't forget to factor in the cost of insurance. The type of vehicle, its age, and additional features can impact the cost of insurance. Contact your insurance provider to get quotes for the vehicles you are interested in.
• Test drive and inspect the vehicle: Before making a purchase, it is important to test drive and thoroughly inspect the vehicle. This will help you identify any potential issues and ensure that the vehicle is in good condition.
• Negotiate the price: Once you have found a vehicle that meets your needs and budget, you may be able to negotiate the price with the seller. It is common for car prices to be negotiable, so don't be afraid to ask for a better deal.
• Complete the necessary paperwork: When you have decided on a vehicle, you will need to complete the purchase paperwork, including the bill of sale, registration, and insurance documentation. Make sure you have all the required documents and information ready to finalize the transaction.

Remember to take your time and do your research when looking for a replacement vehicle. Compare different options and consider your budget, needs, and preferences to make an informed decision.

Frequently asked questions