To Repair or Total? That is the Question.

You’ve been in a vehicle accident and there is damage to your car.  What are the legal obligations with regard to the damage?  This article will address the difference between a total loss and whether an insurer fixes your car.  It also discusses who gets the money if a car is totaled as well as full coverage versus liability.  In short, continue reading for important information regarding property damage in an Illinois car accident and whether to repair or total.

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How does an insurance company determine if my car should be repaired or totaled?

Between 12-14% of all car accidents result in a total loss.  Generally speaking, if the cost to repair your car exceeds the value of your car less the salvage value, an insurer will declare your car a total loss.  However, if the cost to repair your car is high, and close to

the value of the car, you should really push to have the car totaled.  A car which requires a significant amount of repairs is never the same.  But, it does come down to a matter of numbers, is it cheaper to repair or total out your car?

Do I get to keep my car after being declared total loss?

Usually, the insurance company who totals your car requires your to surrender the title to your car in exchange for the settlement check for your car.  If your car is over nine (9) years old, they may give you the option to retain the car, but they will deduct an amount from your total loss settlement.  This is based on the salvage value.  When an insurance company takes the title to your car in a total loss, they frequently sell the car to a junk yard for parts.  If you keep the car, they lose this money, and they deduct it from the amount they would normally pay you.  If you have an old car, it may still be “fixable” even if the insurance company declares it a total loss.  This may be a reason you may want to retain the car.  However, once a car is declared a total loss, this is indicated on the car title, so don’t expect to ever be able to sell it.

How does an insurance company determine the value of my car?

Years ago, there was one source. If your car was totaled, the only place to determine the value was Kelley Blue Book.  Today, insurance companies use a variety of sources, often selecting the one which yields the lowest valuation.  Some insurers will do a search for used vehicles with the same make, model and condition of your car.  The most popular valuation tool used by insurers today is CCC Information Services.  If the amount the insurance company says your car is worth is not what you feel it is worth, you must find alternative sources to justify your position in considering whether to repair or total.

What can increase or decrease the value of a total loss?

It is difficult to get an insurance company to pay more than the value of the car.  However, if you have receipts for extras to your car, you can usually get them added to the value of the car.  For example, if you paid for custom wheel rims, and have the receipt, you can get that amount added to the value.  More commonly, however, is when the insurance company reduces the amount of your total loss based on prior damage.  Do you have a dent you never repaired?  If so, expect the insurance company to reduce the amount for your total loss.  The Illinois Insurance Code allows for such a deduction.

What if I do not agree with the insurance company valuation for my car?

First, if you have full coverage, you may want to submit the claim to your insurance company.  You will have to pay your deductible, but if you have “good insurance,” they may offer you a larger sum for your loss than the at fault driver’s insurance.  If you still dispute the value of your car, you would need to file a lawsuit to dispute the valuation and you would have to present evidence to support your valuation over the insurance companies’ value.  This is expensive and time consuming and usually not worth the trouble.

Who gets the money if your car is a total loss?

The answer to this question depends on whether you have a car loan or if you own your car outright.  If your car is paid off, the check for the totaled car will come directly to you.  If you owe money on a loan, the car insurance company will get a pay off from the loan company and send them their balance, and send any balance to you.  However, if you owe more than the car is worth, you could still be held responsible for the remaining balance.  As you may know, a car depreciates the minute your drive it off the car lot.  Under these circumstances, what you paid (and your loan amount) may be more than the car is worth.  An insurance company only has to pay what the car is worth, not what you owe.  You may end up “upside down” on the car and owe more than it is worth.  You may end up paying for a car you no longer own since it was totaled!  The way to avoid this situation is to purchase gap insurance.  This will pay the difference between what you owe and what you receive in a total loss settlement.  We highly recommend purchasing gap insurance.

When I buy a new car, is the insurance company responsible for my additional charges?

When you purchase a replacement vehicle, you will have to pay tax, title and registration fees.  If your car was not totaled, you wouldn’t have to incur these fees.  So, the law does require an insurance company to reimburse you for these charges if you buy a replacement vehicle — good to know when consider whether to repair or total.

What if I went to the emergency room or was injured in the accident?

An insurer is responsible for your property damage as well as your personal injuries.  Even if you only went to the emergency room, you are still entitled to a settlement for your personal injuries.  You should always call our personal injury lawyers following a car accident.  We will advise you as to your rights and help you navigate the insurance process and obtain a satisfactory settlement on your behalf.  Feel free to contact us at any time for a free consultation.