Unfortunately, your vehicle can be deemed a total loss after another driver crashes into it. The insurance company decides whether your vehicle is a total loss in one of two ways: (1) when your vehicle is worth less than the cost to repair the vehicle plus the salvage value; or (2) when the cost of repairs is worth more than one third of the value of your vehicle.
What is the “Value” of your car? Insurance companies calculate your vehicle’s value using systems similar to The Official Kelley Blue Book. While their systems consider similar things to Kelley Blue Book, the end result is almost always less than the value provided by Kelley Blue Book.
What happens when your car is “totaled out”? Generally, once your vehicle is deemed a total loss, you hand over the vehicle and title to the insurance company. The insurance company sends your vehicle to a junkyard and sends you a check for your vehicle’s value.
Taxes and Your Car’s Value. The cost of the tax payable on a new car, up to the value of your totaled vehicle, should be included as part of the payment, as long as you purchase a new vehicle within thirty days of the total loss being paid. The insurance company at that time will normally provide a supplemental check for the amount of the taxes up to the value of the totaled vehicle.
What if I owe on a loan? If you are still paying on the totaled vehicle, instead of sending you the check, the insurance company pays off the outstanding loan. If there is any money left after paying the loan, your loan company will send you a check for the remaining amount. If the value of the totaled vehicle is less than the loan payoff, you are stuck paying the rest of the loan.
PURCHASE GAP INSURANCE! If you have Gap insurance, it pays the difference between your totaled vehicle’s value and the amount still owed on the vehicle. Even if you have gap insurance, remember to keep paying on the loan until the gap insurance kicks in. If you do not pay on it, you may be in breach of your loan agreement because you are technically missing payments; depending on your gap coverage, it may just cover a specific amount and not the entire difference.
Salvaging a Total Loss. If your vehicle has sentimental value or if you just do not want to get rid of it, you can try for a salvage title. To get a salvage title, the Ohio State Highway Patrol needs to inspect your vehicle to determine if it can be repaired enough to be safe on the road. If OSHP finds the vehicle raparable, you have a certain amount of time to complete the necessary repairs. Once the repairs are completed, your local Bureau of Motor Vehicle office will conduct another safety check. If the repairs are satisfactory at that time, you can pay for the new salvage title. With the new salvage title, you can register for plates and send the title to the insurance company who will then cut you a check for the value of the vehicle at the time of the accident. Depending on the insurance company, they may not provide collision and comprehensive coverage with a salvage title.
If you are in a crash that caused significant damage to you
or your vehicle, your safest bet is to call an accident attorney and let them help you deal with your