Many drivers misunderstand what it means when a vehicle has been totaled (despite millions of cars being labeled as such each year). Most people think that such a car is deemed completely undrivable. In reality, this is not the case. Even though a total is ultimately taken off the road and retired, this may be done even if the vehicle can be fixed.
Below, we'll take a closer look at totaled cars, beginning with a clear definition of the term. I'll explain what happens in the event you want to keep and fix the vehicle rather than retiring it. I'll also describe the process through which your car goes from your hands to a junkyard.
Understanding What "Totaled" Means
Sometimes, it's obvious that a car has been totaled and must be retired. It's completely undrivable. For example, a fire may have gutted the frame or the front-end may have been completely crushed. Other times, a car that appears to have sustained only minor damage can also be labeled a total. The reason is simple: it's a matter of repair costs and value.
To clarify, suppose your automobile has a market value of $2,000 and you're involved in an accident that causes $2,500 in damage. Your insurance company will consider the vehicle totaled because the cost of repairs is in excess of its value. It's less expensive for your insurer to simply cut a check for the value of your car.
Auto insurance companies use different yardsticks to determine a totaling. Some will do so if the cost of repairs exceeds 60% of the vehicle's value. Others will use 80% or more.
Keeping A Totaled Vehicle
What if you prefer to keep your car rather than retire it at your insurer's behest? Few people do so, but you have the option. It's important to inform your insurance company of your intent as soon after the collision as possible. They'll cut a check for an amount equal to your damaged automobile's value less your deductible and the amount they would have generated from retiring it.
Following An Accident
Immediately after a collision, take notes regarding the circumstances that led to the event. If possible, take picture of the scene and your vehicle. Your auto insurer will include these notes in your file and compare them to the accident report to identify who is at fault - you or other motorists. If you are at fault, you'll receive compensation for your totaled vehicle from your insurer. If the other driver is at fault, you'll receive a check from his or her insurer.
Suppose the other motorist is at fault, but his or her insurer is taking an excessive amount of time to compensate you for any losses you suffered. In such cases, you can ask your insurer to provide compensation. They, in turn, will use a procedure called subrogation to seek reimbursement from the other motorist's insurance company.
It's helpful to have a few repair estimates in hand as soon as possible. That way, you can justify a claim - if appropriate - for more money.
Where Your Totaled Vehicle Ends Up
After you have received a check from your insurance company or the other driver's insurer, you will need to relinquish ownership of your car. It will be auctioned off to a salvage yard where others can pick through it for replacement parts.
Some of the components from your totaled vehicle are stripped, inspected, cleaned, and put back into circulation. These are often sold as remanufactured parts. For this reason, if you're going to buy remanufactured parts, make sure they are brought up to OEM standards and come with a warranty. Otherwise, you may be purchasing unreliable parts that have been stripped from someone else's totaled vehicle.
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