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How Do Car Insurance Companies Calculate Total Loss Value?

Published on Sep 1, 2023 at 12:53 pm in Car Accidents.

How Do Car Insurance Companies Calculate Total Loss Value
We rely on our personal motor vehicles for everything from getting to work and dropping kids off at school to running errands and traveling for vacations. When an accident leaves you without a working car, you need a replacement, and you need it fast. So, how do car insurance companies calculate total loss value, and how can you make sure they’re paying you what you’re owed?

If you don’t know what to expect, you’re at a greater risk of being taken advantage of. That’s why our team of Charleston car accident attorneys ensures that every client we work with understands their rights and what they are entitled to.

We’ll Answer Questions Like…

  • How do I know if my vehicle is totaled after an accident?
  • How does the insurer determine the fair market value of my vehicle?
  • What can I do to receive full compensation for the loss of my vehicle after a crash?

What Is a Totaled Vehicle?

In general, a vehicle is considered totaled when the cost of repairs exceeds its total fair market value. You can’t go off of looks alone when determining whether a car, truck, or van is totaled. That’s because even minor collisions can cause severe internal damage to the important mechanics and functionality of a vehicle.

From the outside, a vehicle might appear dented and scraped but in overall good condition. While on the inside, the engine, fuel tank, or transmission might have suffered catastrophic damage.

Always have a reputable mechanic or auto shop perform a thorough evaluation of your vehicle after an accident.

How Insurance Companies Determine Fair Market Value

The fair market value of your vehicle is not the same amount that you paid for it. Whether you purchased a new or used car, it began depreciating in value the moment you began driving it.

The pre-accident fair market value of your vehicle is the amount of money you could have bought or sold it for in a willing transaction. In other words, it’s how much you could have reasonably expected to receive if you’d sold your vehicle before getting into an accident.

Insurance companies use a number of different factors to determine the fair market value of a vehicle, including:

  • The make, model, and year
  • Time and season of the year
  • Geographic location
  • Demand for the same or similar vehicles
  • Mileage
  • Paint job (including color)
  • Past accidents
  • Past repairs
  • Aftermarket modifications
  • Availability of the same or similar vehicles
  • Overall pre-accident condition

You and your attorney should carefully review all documentation of the insurer’s valuation of your vehicle. Look for discrepancies or inaccuracies that might negatively impact the overall fair market value of your vehicle. If you see anything that’s incorrect, like the wrong number of miles on the vehicle or the incorrect production year, bring it to the insurer’s attention right away.

What if the Insurer Offers Me Less Than My Vehicle Is Worth?

Never accept a settlement that does not fully address the totality of your losses. And after a car accident, your losses total more than your medical bills and lost wages—they also include your property damage. This is the category under which damage to your vehicle falls.

Accepting a settlement that is too low in an effort to wrap things up quickly is never a good idea. If you agree to an amount that does not fully cover your vehicle’s total loss value, you are losing out on money to which you are rightfully entitled.

Without this compensation, you won’t be able to replace your totaled vehicle with another vehicle of similar value, worth, and safety. And without a reliable vehicle, everyday tasks like getting to and from work will suddenly be much more difficult, if not impossible.

If an insurer offers you less than your vehicle is worth, speak with a lawyer right away. An experienced legal representative will be able to help you understand and exert your legal rights in this situation.

What if My Own Insurance Company Is the Problem?

West Virginia is an “at-fault” state when it comes to car accidents. This means that the at-fault party’s insurance company is responsible for paying for damages to crash victims.

However, you might have had to file a claim with your own insurance company if the at-fault driver:

  • Was underinsured (did not have sufficient insurance coverage)
  • Was uninsured (did not have any auto insurance coverage)
  • Fled the scene of the accident

Don’t count on your own insurer treating you more fairly than another driver’s insurer.

That’s because auto insurers are big, profit-minded businesses with a singular focus—the bottom line. Paying out claims (even to their own policyholders) puts their profits in jeopardy. So don’t let your attention to detail slip when filing a claim with your own insurer.

Don’t ignore any concerning feelings you have. If you think your insurance carrier is treating you unfairly, you could be missing out on vital compensation.

4 Ways To Improve Your Chances of Securing Full Compensation for a Totaled Vehicle

So, your car was totaled, and now you need to be sure that the insurance company is paying you a fair settlement. Here are DiPiero Simmons McGinley & Bastress, PLLC’s top four tips for getting full compensation for a totaled vehicle:

  1. Reference the value of your make, model, and year vehicle in your area on Kelley Blue Book, Edmunds, NADA Guides, and other reputable market guides.
  2. Provide the insurer with a copy of your vehicle’s recent annual service report or any recent maintenance.
  3. Provide the insurer with photos and videos accurately depicting the pre-accident condition of your vehicle.
  4. Speak with a lawyer about your rights after an accident.

DiPiero Simmons McGinley & Bastress, PLLC—Fighting for West Virginia Accident Victims

It doesn’t matter how safely you drive because anyone can become the victim of a car accident. If an accident has caused damage to your vehicle, you deserve to recover full and fair compensation for that loss.

DiPiero Simmons McGinley & Bastress, PLLC is proud to represent members of our community. We provide completely free case evaluations to car accident victims in Charleston, Kanawha County, and beyond. These informational meetings are free of any obligations, so please contact us so that we can match you with an injury attorney for your first consultation.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice. Viewing does not constitute an attorney-client relationship. Prior case results do not guarantee a similar outcome.
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