TO YOUR AUTO INSURANCE COMPANY, TOTALED MEANS
Any car accident may ruin your day, but it’s particularly aggravating when your auto insurance company gives you the runaround about what it will pay for repairs or a new car in the days and weeks that follow.
Insurance companies in Colorado may attempt to pay you less than you should by using the Lone Star State’s total loss legislation for damaged cars. You can stop them from getting away with it with the aid of an experienced car accident lawyer.
If someone says their car is totaled, you’re generally picturing a car that’s entirely wrecked and undrivable—things like crumpled front ends, caved-in roofs, and twisted frames. To most people, a wrecked car is headed for the junkyard.
HOWEVER, INSURANCE COMPANIES DO NOT PERCEIVE IT THAT WAY.
Totaled (or complete loss) doesn’t always signify “damaged beyond repair” to insurance carriers. Instead, it indicates “not worth fixing, based on our evaluation of the car’s value before the accident.”
To put it another way, insurance companies use the term “totaled” to justify paying you less for the damage to your car than you deserve.
THE TOTAL LOSS STATUTE IN COLORADO
Most states, including Colorado, have rules requiring damaged cars to obtain special titles. These legislation aimsto safeguard used car buyers by notifying them on the car title if the car has previously been damaged in collisions, floods, or other injuryful situations.
The Colorado Transportation Code distinguishes two types of car damage that need a unique title:
A salvage car is one for which the cost of fixing damage exceeds the car’s real cash worth (also known as market value) immediately before the damage. A salvage title is required by law for a car with this amount of damage.
A nonrepairable car has sustained such extensive damage that its only worth is as scrap or spare components. For a car with this amount of damage, the law mandates a nonrepairable car title.
THE TOTAL LOSS STATUTE AND HOW INSURANCE COMPANIES USE IT TO PAY YOU LESS THAN YOU DESERVE
Colorado car insurance companies use the statutory definition of salvage motor car to determine whether a car is a complete loss. Suppose the cost of fixing an car damaged in an accident exceeds 100 percent of its market value immediately before the accident.
In that case, the insurance company may declare it a complete loss and refuse to repair it under the driver’s insurance policy. Instead, the driver surrenders the damaged car to the insurance company, which gives the driver a settlement that, in theory, matches the totaled car’s pre-crash market value, allowing the driver to purchase a similar car.
HOWEVER, THE THEORY DOES NOT NECESSARILY EQUATE TO PRACTICE.
The difficulty with utilizing repair costs and pre-crash market values as benchmarks for determining how much money to give a car owner are that those figures aren’t fixed.
They differ, they’re subjective, and if you’re not vigilant, an insurance company might attempt to manipulate them to its benefit, resulting in financial loss to you.
Here are two instances of what might happen when insurance companies err on the side of caution regarding car valuations, repair costs, and total loss assessments.
HOCUS POCUS: THE OLD VALUATION
Assume you own a ten-year-old car. It has around 100,000 miles on it, but it is dependable and in good working order. In a private party sale or as a trade-in, you think you may obtain $6,000 for it. Y
ou’ve seen comparable cars for sale in your neighborhood for that amount online, and you’ve maintained yours in great shape—you garaged it, changed the oil every 3,000 miles, cleaned it on weekends, and so on.
You are involved in an accident where your car gets some front-end damage, and you choose an auto-body shop based on the insurance company’s advice. The business provides you with a repair estimate of 4,000 dollars. You could think that’s a bit pricey, but it’s still worth it.
The car had very little cosmetic damage. It continues to function normally. You contact the insurance and request that the repairs be approved.
“DECLINED,” THEY REPLIED.
When you phone the insurance company to find out what’s going on, the adjuster informs you that using the insurance company’s unique, actuarial car valuation model, the pre- crash market value of your car is just $3,000. He’s declaring your car a complete loss since the cost of repairs exceeds the amount determined by the calculation.
That implies your insurance company will not cover the cost of your car’s repairs. Instead, if you turn in your car to the insurance company, you’ll get a check for $2,000, which is the $3,000 pre-crash market value they assessed for your car minus your $1,000 deductible. (Forget about the fact that $2,000 won’t even buy you a similar car!)
The adjuster also offers you the option of retaining your damaged car, but you’ll have to apply for a salvage title, and your insurance premiums will go up. If you choose this option, the insurer will send you a $1,000 check. This is the difference between the insurance company’s valuation of the car’s pre-crash market value of $3,000 minus your $1,000 deductible and the $1,000 the insurance company’s algorithm calculates as the car’s current salvage title value.
Neither choice seems to be very tempting. However, you decide that having $2,000 in your pocket, which you can use to bargain-hunt for a new car, is preferable to $1,000 and a car that requires $4,000 in repairs. Even though it seems like a rip-off, you accept the
After paying you $2,000, the insurance company takes custody of your car and sells it for $3,000 at a salvage auction, profiting handsomely on the sale. To add insult to injury, your car is posted for sale online six months later, completely repaired, by the dealer who purchased it at auction for $6,500.
LEAVING YOUR EXPENSIVE CAR IN DANGER
Instead, imagine you recently spent $80,000 on a new luxury car. You get into a terrible accident only days after driving the car off the lot. You’d be dead if it weren’t for the car’s superior engineering and top-of-the-line safety features. Instead, you walked away from the collision with just minor injuries.
On the other hand, your car does not seem to be likely to see another day on the road. It’s a total disaster, damaged and beyond repair, at least to your eyes.
Isn’t that why you get insurance? Your insurance provider will quickly declare your car a complete loss with that kind of damage. You also know precisely what the car’s pre-crash market worth was since you just acquired it. You file a claim and anticipate your
insurance company to deliver you a check for $80,000 (minus your deductible, of course) as soon as possible.
Prepare to be patient for a long time. The insurance company, you see, isn’t ready to give up on your damaged luxury car just yet. The adjuster may know of a local car body shop that can do miracles. The repairs will cost about $18,000, and the job will take roughly two months to complete, but you will have your car back.
According to the insurance company, your car isn’t a complete loss, and you won’t receive anything close to $80,000 in compensation. Instead, the insurance will pay you
$18,000 for the repairs.
What exactly is it? You’re upset because the luxury car you purchased only a few days ago has turned into a Frankenstein’s monster of repair work that won’t drive correctly and that you’ll never be able to sell or trade for anything near to its original value? The insurance company says it’s not their responsibility, but thanks for your business!
DEFEND YOURSELF AGAINST TOTAL LOSS TRICKERY!
Do the preceding examples exasperate you? Don’t fall victim to them!
You don’t have to put up with the games that insurance companies attempt to play with car damage and repair estimates. You may fight back and compel the insurance company to pay you what you’re owed with the aid of an expert Colorado car accident lawyer.
Let’s look at some options for enforcing your rights.
TAKE CONTROL OF YOUR VALUATION
Let’s be clear: you are under no obligation to accept the insurance company’s estimate of your damaged car’s value or the cost of repairs.
You may and should offer your evidence and analysis of what your car was worth before the accident and what it could cost to fix the damage to the insurance company.
Simply refusing to accept the insurance company’s word—and the word of an insurance company-recommended auto body shop—can increase the pre-crash value of your car and/or a reduction in the estimated repair expenses.
An expert attorney can assist you in gathering and presenting evidence to the insurance company in such a manner that the insurance company is forced to confront reality and treat you fairly.
NEGOTIATION SHOULD BE LEFT TO THE PROFESSIONALS.
Evidence alone may not always be enough to persuade an insurance provider to understand your point of view on how much your car was worth and how much money you should get for damage to it. Instead, you may have to bargain with the insurance company and explain why the law and the facts are on your side, not theirs.
Some individuals attempt to negotiate independently, but this is nearly always a terrible idea. Insurance adjusters make a livelihood negotiating, and they know how to take even the most talented competitor to the task.
Leave the insurance company negotiations to an attorney who speaks their language and understands their pressure points. It’s not always simple to get money from an insurance company, but understanding the legal concepts and the big picture concerns that an insurance company will examine when choosing whether or not to pay you what you deserve might help.
IF NECESSARY, TAKE THEM TO COURT.
On the other hand, negotiation does not necessarily bring you where you want to go. Instead, you may need to take legal action to compel the insurance provider to put up or shut up. A qualified car accident lawyer can represent you in court and prove that the insurance company has not treated you properly. In certain situations, such proof might result in you receiving not only the money owed to you by the insurance company but also a judgment of additional damages for the insurance company’s bad faith.
JUST DON’T PROCRASTINATE TOO MUCH.
You don’t have time to waste when it comes to challenging the insurance company’s car damage valuation methods and tactics. Each passing day after your car was damaged in an accident, proving your right to compensation gets more difficult.
Make the most of your legal rights to hold the insurance company to its contractual duties by hiring a qualified lawyer straight away.
OBTAIN THE SERVICES OF A COLORADO CAR ACCIDENT INJURY ATTORNEY.
Insurance firms thrive by nickel-and-diming claims to the maximum extent feasible. They get away with their manipulations and techniques a lot of the time because customers don’t know any different. You, on the other hand, now have it.
If your car is damaged in a collision, expect the worst from your insurance company, and employ a lawyer to demand the best.
Contact an expert car accident lawyer immediately for a free case review to learn more about your rights to full payment under your car damage insurance.