How Do Insurance Companies Decide If a Car is Totaled?

Colburn Law

Posted in Car Accidents on July 17, 2021

Car accidents can cause a lot of damage to your vehicle. In these situations, you want to have your car repaired as quickly as possible so you can get back on the road. However, some vehicle damage can be so extensive that the insurance company will consider it totaled, and you will need to request a replacement instead. Dealing with insurance companies after an accident can be difficult, especially if you sustained extensive losses—and if you are dealing with a totaled vehicle, it is important to understand your rights and responsibilities.

Fault Insurance Laws in Washington

Like most states, Washington follows a fault-based system when it comes to car accidents. Drivers who commit negligent actions, such as speeding or running a red light, are financially liable for their victims’ losses if they cause a collision. You can hold the at-fault driver accountable through an insurance claim or a personal injury lawsuit. These processes enable you to recover compensatory damages for medical expenses, lost wages, and vehicle repairs or replacements.

Washington’s Total Loss Formula

When assessing the extent of a vehicle’s damage, Washington insurance companies use a specific formula to determine if a car is totaled, or damaged beyond salvation. If the total loss formula determines that a car is totaled, the company will a replacement instead of sending the vehicle for repairs. 

The insurance company will look at three key factors when assessing vehicle damage.

• The cost to repair the vehicle: First, the insurance company will look at how much the parts and labor would cost to repair the damaged car. These estimates can vary between repair shops, so it is important to bring your vehicle in for an independent evaluation.
• The salvage value: After determining the repair costs, the company will look at the vehicle’s salvage value, or the value of parts that could be reused or resold. When a vehicle is totaled, it will usually be sent to a salvage shop where useful parts are removed, and the rest of the car is scrapped.
• The vehicle’s pre-accident value: Finally, the insurance company will assess the actual cash value of your vehicle before the accident occurred. This value is equal to the amount of money you would have received if you sold the car prior to the crash. 

Once the insurance company identifies these three key values, it will plug them into the total loss formula. If the cost of repairs and the salvage value combined are higher than the actual cash value of your vehicle, the company will consider the car to be totaled. In this situation, you could either replace your car with another vehicle that is similar in value, or you can receive a cash settlement based on the value of comparable motor vehicles.  

Contact Colburn Law Today

Dealing with insurance companies can be difficult after any accident. If your car sustained serious damage in a collision, however, the insurance process can become even more complex. In these situations, it is important to speak to an attorney as soon as possible. 

Your lawyer can help you determine whether your vehicle is actually damaged beyond repair and whether the insurance company is offering you a fair settlement for your losses. He or she will also handle all aspects of your case on your behalf so you can focus on recovery. As soon as possible after the collision, contact a Seattle car accident attorney to discuss your optimal path to maximum compensation.