What Happens If My Car is ‘Totaled’ in a Car Accident?

You’ve been in a serious car wreck. Your car is severely damaged, maybe totaled. Will your insurance company total it? Maybe you don’t mind if they do- your car was an old hand me down you used for commuting to and from work. Or wait- maybe you do mind. This was the car of your dreams you saved up so long for. After searching for months, you finally found it in the perfect color. This is your dream car and you want it back! Unfortunately, that’s not necessarily your decision to make. After a car accident, your insurance company will decide whether your vehicle is a “total loss” or worth repairing.

How “Total Loss” Is Determined in Rhode Island

Laws vary from state to state as to when a vehicle is considered a “total loss” after an accident. They also may vary between insurance companies. Rhode Island typically considers a vehicle a “total loss” when the cost to repair the vehicle is more than 75% of the actual cash value (ACV) of the vehicle.

Total Loss Ratio (TLR) = Cost of Repairs/Actual Cash Value

For example: The fair market value of your vehicle prior to the accident is $5,000. The cost of repairs is $3,900. Total Loss Ratio $3,900/$5,000 = 78%. So, it is highly likely your car will be a total loss based on Rhode Island standards. In some cases, even if the vehicle is not considered a total loss based on the TLR, the car may still not be repaired and instead totaled. This may be the case in older model vehicles that are not worth repairing or may be based on other factors used by the insurance company.

Insurance Company Will Take the Least Expensive Way Out

Your insurance company doesn’t care about sentimental feelings when it comes to your vehicle. It doesn’t matter to them that this was the first car you bought with your own money or that the car was passed on to you from a beloved parent. The insurance company will appraise the vehicle and decide if it is cheaper to repair it or pay out a claim to the insured for the value of the vehicle prior to the accident.more

What Happens After My Car is Considered Totaled?

Once its determined by the insurance company that your car is a total loss, the insurance company generally takes ownership of the damaged vehicle, called “salvage”. They may obtain a “salvage certificate” after paying you (the insured) the pre-car accident value of the vehicle. The insurance company will then forward license plates and certificate of ownership to the Department of Motor Vehicles who will issue the Salvage Certificate. Sometimes the insurance company will decide to repair the vehicle, re-register it, and classify it as a “salvaged vehicle”.

Most likely you will need to shop for a new car and this will take some time. Or even if your car is being repaired by a body shop, which will also take time, you will need transportation while its getting fixed. Check with your insurance company, you may be eligible for a rental car, sometimes up to 30 days depending on your insurance policy. It is also your legal right to decide which body shop repairs your car. You are not required to use a body shop only because it is recommended by your insurance company.

Right of Recourse in Rhode Island

If, after the insurance company offers a claim amount to you- the insured, you find you can’t purchase a comparable vehicle for fair market value, Rhode Island offers a Right of Recourse. In summary, Right of Recourse states if the insurer is notified of this fact within 35 days, the insurer shall reopen your claim file and follow specific procedures outlined in the Right of Recourse.

What if I Want to Keep My Vehicle After the Car Accident?

If the insurance company decided the car is not worth repairing and is considered a total loss, some will allow the owner to take back the “totaled” vehicle if they wish. The insurance company will deduct the value of the salvage and any deductibles from the claim payment. Keep in mind, the owner will need to take care of repairing the damage and the vehicle may still be classified as a “salvaged vehicle”, making it more difficult to insure and sell down the road.

“Total Loss” claims can be frustrating and a lot of work. If you have been in a car accident in Rhode Island and you feel your insurance company is not compensating you adequately for the fair market value of your vehicle, call for a free legal consultation. You need a Car Accident Lawyer in Rhode Island to determine if the insurance companies are treating you fairly. At Tapalian Law, we deal with car accident cases daily and will make sure you are compensated fairly for your losses. Call Attorney David Tapalian at 401-552-5000 or visit us online.