Car accidents can leave people not only shaken but facing a host of unexpected financial and logistical questions. Among these is the issue of what to do when a car is technically "totaled" but still drivable. This situation occurs more often than people realize, and it’s essential to understand what “totaled” means, how insurance companies assess vehicle damage, and what options you have if your car is totaled yet still functional. As car accident attorneys, we’re here to help you navigate this process, protect your rights, and ensure you receive the compensation you deserve.
What You Should Know if Your Car is Totaled
What Does “Totaled” Mean?
In the simplest terms, a car is considered "totaled" when the cost of repairs exceeds a certain percentage of the vehicle's value. This percentage threshold varies by state and insurance company but is generally around 70-80% of the car’s pre-accident value. Once a car reaches this threshold, insurance companies may deem it a “total loss,” meaning they’d rather pay you the vehicle's actual cash value (ACV) than cover the extensive repair costs.
For example, if your car is worth $10,000 before an accident and repairs would cost $9,000, the insurance company would likely declare it totaled since repairs amount to 90% of its value. However, the “totaled” designation doesn’t necessarily mean the car is beyond repair or undrivable—it simply indicates that the cost to fix it exceeds what the insurer considers practical.
Can You Drive a Totaled Car?
Yes. A “totaled” car can still be driven in many cases. This typically depends on the extent of the damage and state laws about the condition of vehicles that are allowed on the road. For example, cosmetic damage—like a dented door or scratched paint—might lead to a designation of “totaled” even if the car remains mechanically sound. However, if a vehicle deemed to be totaled has structural damage that could compromise safety, driving it could be illegal, unsafe, or both.
If you’re uncertain about the safety or legality of driving your totaled vehicle, consider taking it to a qualified mechanic who can evaluate whether it meets your state’s roadworthiness requirements. It’s also crucial to check local regulations, as some states have strict rules regarding totaled vehicles, especially those with structural or frame damage.
Can I Keep My Totaled Car in California?
There are some rules in California regarding vehicles that are deemed a "total loss" or "totaled" by an insurance company:
Salvage Title: If a vehicle is declared a total loss by an insurance company, the vehicle title will be branded as a "salvage title." This means the vehicle cannot be legally driven on public roads until it has been properly repaired and inspected.
Inspection Requirements: Before a salvage vehicle can be registered with a rebuilt/reconstructed title, it must pass a thorough inspection by the California Highway Patrol or a state-authorized inspection facility. This ensures the vehicle has been properly repaired and is safe to operate.
Rebuilt/Reconstructed Title: Once a salvage vehicle has been repaired and inspected, the California Department of Motor Vehicles (DMV) will issue a "rebuilt" or "reconstructed" title for the vehicle. Once you obtain this, you can legally drive the vehicle.
Disclosure: If a vehicle has been declared a total loss and repaired, the owner must disclose this information to any potential buyers. Failure to do so can result in legal penalties.
So, while it is true that you can keep your totaled car in California, owners need to know that it is illegal to operate a vehicle in California with a salvage title. The vehicle must go through the proper inspection and titling process before it can be driven legally on public roads again. Driving a "totaled" vehicle without the required rebuilt/reconstructed title could result in fines, impoundment of the vehicle, or other penalties.
Why Do Insurance Companies Total Drivable Cars?
Insurance companies determine whether a car is totaled based on the estimated repair costs versus the vehicle’s value. If the repair costs are high relative to the car’s value, they’ll likely declare it totaled even if the car can still be driven. Some common reasons for this include:
- High Parts and Labor Costs: Certain parts, especially for newer or imported cars, can be costly to repair or replace. Even if damage seems minor, high costs can push the repair estimate above the threshold.
- Hidden Damage: In some cases, initial damage assessments miss internal or structural issues that require more extensive and costly repairs, especially for modern vehicles with intricate electrical and mechanical systems.
- Diminished Value: When a vehicle is in an accident, its resale value often decreases significantly, even if repaired to pre-accident condition. Insurers factor this loss in value into their calculations, sometimes leading to a totaled designation even for drivable cars.
Options for a Totaled Car That’s Still Drivable
If your car has been declared a total loss but remains drivable, you typically have a few options:
Accept the Total Loss Settlement
If you accept the total loss settlement, the insurance company will pay you the car’s actual cash value (ACV) minus any deductible. However, this also means you surrender ownership of the car to the insurer, and they will likely take possession of it, sell it to a salvage yard, or auction it off.
The ACV represents the market value of your vehicle immediately before the accident, and it’s calculated based on factors such as the car’s make, model, age, mileage, and condition. Many people find this payout less than expected, so it’s wise to research your vehicle’s ACV to ensure the insurer’s offer is fair.
Negotiate with Your Insurance Company
You can negotiate with your insurance company if the settlement offer seems too low. Provide evidence of your car’s actual cash value by collecting documentation like recent receipts for repairs, aftermarket modifications, or comparable listings of similar vehicles in your area. Insurance companies may be willing to adjust their offer if you can prove the car is worth more than their initial estimate.
Sometimes, you may also negotiate to keep the car, especially if it’s still drivable. To do so, you’d typically receive a reduced payout, allowing you to retain the vehicle while covering necessary repairs out of pocket.
Keep the Car with a Salvage Title
Another option is to accept a salvage title. In this scenario, you keep the car and still receive a payout, but the vehicle’s title changes to reflect that it’s a “salvage” or “rebuilt” vehicle. While this may seem like a win-win, there are some critical considerations:
- Insurance Coverage: Once a car has a salvage title, insuring it can become challenging. Some insurers won’t cover salvage vehicles, while others may offer only limited coverage. Check with your insurer beforehand to understand your coverage options.
- Resale Value: A salvage title can significantly reduce your car’s resale value, as potential buyers may be wary of previous damage, even if repairs were done properly.
Repair the Car Independently
If you believe the car’s damage isn’t extensive, you can decline the total loss settlement and cover the repairs yourself. This option is most practical if you feel the insurer undervalued the car or if the repairs are within your budget. However, if you opt for this route, make sure the repairs restore the car’s safety and meet state inspection standards to avoid legal or insurance issues.
Common Issues When Dealing with Insurance Companies
Insurance claims for totaled vehicles can be complicated, and insurance companies often offer the lowest possible payout. Here are some common issues that may arise:
- Low Settlement Offers: Insurers sometimes undervalue vehicles, offering settlements below their actual value. Research your car's fair market value to negotiate a fair offer.
- Deductibles: Insurers may apply deductibles even in total loss situations, which can reduce the payout amount. Make sure you understand how your deductible impacts the final settlement.
- Disagreements on Repairs: Some insurers may pressure you to accept a total loss claim rather than repairing the vehicle, as they may prefer the cost savings of a total loss.
- Time Delays: Total loss claims can sometimes be processed more slowly than other types, leaving you without transportation longer than expected.
When to Consult a Car Accident Attorney
If you or a member of your family sustained injuries in an accident or feel the insurance company is not treating you fairly, it may be time to consult an attorney. An experienced car accident attorney can help you:
- Negotiate a Fair Settlement: Attorneys understand the insurance industry and can help you pursue a fair settlement considering the full extent of your loss.
- Handle Complex Claims: Total loss claims can be more complicated than they appear. An attorney can navigate these complexities on your behalf, providing guidance and helping you understand your rights.
- Seek Additional Damages: If you’ve been injured in the accident, you may be entitled to compensation for medical expenses, lost wages, pain and suffering, and more. An attorney can ensure your claim includes these damages and that your settlement reflects them.
Let Wisner Baum Be There After Your Car Accident
Dealing with a totaled vehicle can be frustrating, especially when you are attached to the vehicle and/or it’s still drivable. However, understanding your rights and options can help you make the best decision moving forward. If you feel your insurance company is not valuing your car appropriately or if you’ve suffered personal injuries, having an experienced attorney by your side can make all the difference.
At Wisner Baum, our car accident attorneys are dedicated to helping accident victims secure fair settlements for their vehicles and recover damages for injuries. If you’re struggling to resolve a totaled vehicle claim or need guidance after an accident, contact us today. Let us help you protect your rights and get the outcome you deserve. Contact Wisner Baum or call (855) 948-5098 to schedule a free consultation and take the next step toward fair compensation.
