Were you involved in a wreck? Hopefully, you and your loved ones are okay. Your car might be another issue. Improvements in safety design have led to a lowering of the fatality rate, but in the process, many cars are destroyed by collisions. Now your insurer is claiming your vehicle is a total loss. But what is considered a totaled car?
A Greenwood car accident lawyer with McCravy, Newlon, Sturkie & Clardy explains more in this post.
When is a Car Considered Totaled?
South Carolina defines “vehicle declared to be a total loss” in Section 56-19-480(G) of the Annotated Code. It means the cost to fix a car, including parts and labor, is equal to or exceeds 75% of the car’s fair market value. In one sense, this is straightforward.
Let’s say your car has a fair market value (FMV) of $20,000. If it would cost more than $15,000 to repair, then the car is conserved a total loss.
South Carolina also says an insurer can declare a vehicle a total loss if it was worth less than $2,000.
So, a very old car with many miles might be automatically deemed a total loss even if it sustained little damage.
When Is a Car Totaled?
The numbers involved might make this calculation appear straightforward. But there are some wrinkles involved:
- How to determine FMV? That isn’t always so clear. It certainly isn’t the price you paid, since the car undoubtedly has depreciated since you took over ownership.
- How to calculate the cost of repairs? Again, this number might not be so black and white, especially as the price of car repairs continues to fluctuate depending on the date and part of the state.
Insurance companies are obligated to treat you fairly, but they might fail to explain their calculations in ways that make sense.
How Insurers Calculate Fair Market Value
Your insurance company will use software to calculate the FMV of your vehicle. You might think they just look at the Kelley Blue Book, but they don’t. They also don’t make their software publicly available.
However, you are entitled to an explanation of how they based the Fair Market Value for your vehicle. Read this explanation carefully. It could be that your insurer simply doesn’t want to pay to fix the vehicle, so they are keeping the FMV for your vehicle unfairly low.
There are ways you can check this. Look at comparable vehicles for sale in and around Greenwood.
They should be the same make, model, year, and trim. Also, make sure they have similar miles. If the insurance company’s estimate seems wildly out of sync with what you find in the current market, then you can explore further. Call the insurance company and ask for an explanation.
Challenging a Total Loss Determination
Now that we have discussed what is considered a totaled car, let’s discuss your options if you want to keep the vehicle or challenge the determination:
- Get expert help. You need assistance calculating the FMV of the vehicle, as well as the cost of repairs and the salvage value. Instead of jumping through these hoops yourself, you can work with a property damage expert who can look at the car and study the market. Reach out to a law firm. We work with experts all the time who can provide this critical information.
- Determine the cost of repairs. This is perhaps the most important consideration when deciding whether to keep a totaled vehicle. The costs might be much higher than you imagine, forcing you to accept the insurance company’s payout.
- Think twice. Not every vehicle should be rebuilt. You might be happier having the insurer pay you a fair price for the car. Remember, you can get the FMV minus your deductible. That could be thousands of dollars that you can contribute to a new set of wheels. If you decide to keep the car, you get FMV minus deductible and the salvage value, which is what it would sell for at a salvage yard. So you are getting less if you keep it.
- Prepare for arbitration. In South Carolina, you can have an arbitration panel decide your insurance dispute. This is a cost-effective way of resolving a legal dispute outside ordinary litigation. Nonetheless, arbitration still requires preparation so that you can make a forceful argument on your behalf. and what evidence is helpful.
Do You Want to Keep Your Vehicle?
Some people don’t want to give up on their vehicle, perhaps because it has sentimental value. Or maybe they think the car is dependable and would hate to get into a used vehicle which is unfamiliar.
Whatever your reasons, you decide you want to keep the car and get it repaired. You have that option. However, it’s best to consider the choice to keep and repair a vehicle from all angles. Some negatives include:
- The car might be less safe to drive, even after repairs. There is no reason to jeopardize your safety.
- Repairs could be much more expensive than you anticipated. You might not discover this fact until after you insist on keeping the damaged car.
- The car will probably have little resale value. The government keeps a database of salvaged vehicles, so a purchaser will find this out. You probably should not rebuild a salvaged vehicle if you hope to turn around and sell it.
- Insuring a rebuilt car is difficult and often quite expensive. You might not even be able to insure it at all.
These are important considerations which require careful thought. Remember that when you repair a vehicle, you need to change the car’s title from “salvage” to “rebuilt.”
Contact a Greenwood Car Accident Lawyer Following a Crash
McCravy, Newlon, Sturkie & Clardy has handled hundreds of car accident cases in South Carolina.
We are ready to assist injured victims in any way that we can, including by negotiating on their behalf for compensation. Call us today to schedule a meeting, without cost or obligation to you.