Legal Advice When Your Car Is Totaled and You’re Not at Fault

When do you seek legal advice if your car has been totaled in an accident and you’re not at fault? A collision with enough impact to render your car a total loss is a serious one. It would be unusual if one or more passengers in the vehicle were not badly injured. Therefore, it’s best to consult with an injury attorney as soon as you have the chance. Many significant neck and back injuries are not readily apparent within the first three to five days of a crash, other than some soreness. But when a car is totaled, meaning a serious impact has happened, there is a high chance of injury, great bodily harm, or even death.

When you seek the advice of a car accident lawyer, he or she will first need a clear understanding of who caused or contributed to the crash and exactly how the events unfolded. Any attorney’s advice will depend on whether or not the other driver alone caused the crash or if you may have contributed in some way.

Property Damage Coverage

If it’s determined that the other driver was at fault, the payment of your total vehicle loss will come from the property damage coverage of the driver’s insurance company. Every vehicle in Florida is required to carry $10,000 in property damage insurance. If you are the only other vehicle involved and the replacement value of your vehicle is $10,000 or less, your vehicle should be covered by the other driver’s insurance company when he or she is at fault.

If multiple cars are involved in a crash, the question arises about whether or not there is sufficient property damage coverage on the responsible driver’s policy to pay for the total damage to all vehicles. If you were at fault, replacement of your vehicle would be dependent upon your insurance policy having “collision” coverage, which is insurance on your own policy to pay for your property in the event it is damaged.

Dealing with Insurance Companies About a Rental Vehicle

The other consideration when your car is totaled and the other driver was at fault is the driver’s insurance company providing you with a rental vehicle. Insurance companies typically pay for a rental vehicle on an interim basis; that is, until they give you a final appraisal on the replacement value of your vehicle. Once you know your car is totaled, you need to begin looking for a replacement. Keep in mind that an insurer does not have to buy you a new car, simply a vehicle of equal value to the condition and year of the car you lost. Once the insurer issues its final decision on what it will pay for your loss, you need to be careful because it can and will often terminate the rental within a fixed number of days of that decision.

Dealing with Insurance Companies After a Collision

In the first few days following a collision, if you are physically able, you should gather your personal belongings out of your vehicle after it is towed to a storage lot. Most insurance companies will typically remove the vehicle from the local storage yard in order to minimize storage expenses. Once any issues surrounding the collision are resolved and the payments for property damage have been made, the storage facility gets to dispose of the salvage of the vehicle.

It’s much easier to retrieve your personal belongings from the local tow yard than from the central storage facility. You may have to get permission from the company that’s paying for the storage in order to enter the lot to get your things. If you’ve been seriously injured, you’ll want to have someone do it for you at the earliest opportunity. Make sure never to change, alter, or degrade the condition of the vehicle. Frequently the interior surfaces and components, as well as the condition of the exterior, are all relevant to the circumstances surrounding the crash. This information is even more critical in accidents involving someone who has died or was critically injured.

Collision Reconstruction in Cases Involving Serious Personal Injuries or the Wrongful Death of a Loved One

A number of cases involving a totaled vehicle include claims for wrongful death or catastrophic injuries. Your attorney should consider hiring an accident reconstruction engineer to examine your vehicle to determine the impact forces of the collision. If someone has died or been hospitalized with serious injuries or there is otherwise evidence of a significant and permanent injury, it’s important to retain an attorney at the earliest opportunity.

Also, if there is any question about who caused the crash or the circumstances of the crash, your attorney may well need to hire an accident reconstruction engineer. Electronic data recorder information may be needed from both vehicles involved—yours and the vehicle that caused the crash. This data can provide information on the speed, braking, and other aspects of the operation of the vehicle immediately before and up to the point of impact. It’s important to retrieve this data before the vehicle is lost or destroyed. Hiring an attorney at the earliest opportunity gives you the greatest chance to gather and preserve this valuable evidence.

How to Fight Your Insurance Company on a Totaled Car and Determine Fair Market Value

The biggest concern when your car is totaled is how much you will be paid for it. The insurance company has a responsibility to pay the fair market value of your loss—the age and condition of the vehicle on the day of the crash. There is rarely only one source of information.

Some insurance companies rely on a service that examines sales of similar vehicles from automobile dealers, used car guides, and advertised prices on things such autotrader.com. Often such a service will compile an average of all these sources to come up with a price. It is frequently difficult to negotiate with insurance companies on this price. Some will simply rely on one of many used car guides to determine the value of your vehicle, given its model, features, age, mileage, and condition.

It’s a good idea to begin searching on your own at your earliest opportunity to get some idea of the range of your vehicle’s value. If there is a dispute about the price, it’s important to know exactly what criteria were used to calculate the monetary figure the insurance company is offering. You need to make sure it hasn’t overlooked something that would increase the value of your vehicle, such as having had the engine or transmission recently repaired, tires replaced, a new paint job, or installation of expensive add-ons. Many times a substantial repair or refurbishing of the car is overlooked in the insurance company’s evaluation.

Also keep in mind that it is possible when your vehicle has been totaled to get a replacement value quote not only from the defendant driver’s insurance company but also from your own insurance company if you carried “collision” coverage on your policy. In our practice, we have seen a difference of more than $5,000 between the opposing insurance companies. You have the right to choose between the offer made by your own insurance company and the offer made by the at-fault driver’s company if one is better than the other.  If your own insurance company pays for your car under your “collision” coverage, the payment will be reduced by your deductible. If that happens, your company will go after your deductible amount from the other driver’s insurance company, and you should be reimbursed for it months later.

What to Do When Your Car Is Totaled and You Still Owe on the Loan

What if your car is totaled and you still owe on the loan? What if you’ve completely financed your car that is now totaled and you have to continue making payments? The fact that your car is totaled does not mean that you no longer have a responsibility to make the loan payments. Remember, the car loan was financed independently on the basis of a contract with a bank, credit union, or some other financial institution. A motor vehicle collision does not change the terms of your contract.

As soon as you are able after the collision, you need to contact your financial institution and continue, if at all possible, to make payments. If your injuries from the crash prevent you from working, you must inform your creditor of those circumstances. Don’t assume the collision terminates your legal obligation to make the payments. You’ll need to work out some mutually agreed upon payment arrangements to protect your credit. We find it is best to work with the insurance company that is going to pay for your totaled car so you receive your check as quickly as possible. This action will minimize the chance that you will have one or more car payments become due.

When the Fair Market Value Is Less Than What You Owe

The other driver’s insurance company is not going to simply pick up your payments. At some point, it will pay the fair market value for the vehicle that was totaled. Hopefully, the market value figure is more than you owe. If so, you can simply pay the vehicle off. The problem arises when that fair market value is less than what you owe on the vehicle. This is a very common problem, particularly if you buy a relatively new car and enter into a long (60 or 72 month) payment plan. It may be more than halfway through the loan before the value of the car is more than what you owe. Remember, if your own insurance company pays for your car under your “collision” coverage, the payment will be reduced by your deductible, and your company will attempt to recover that deductible amount from the other driver’s insurance company.

GAP Insurance

Many companies offer policies with GAP (“guaranteed asset protection”) insurance. This type of coverage will take effect and pay the outstanding balance on the car loan so you don’t owe anything out-of-pocket—assuming the GAP coverage limits are high enough. This is great coverage to have in the unlikely event of a collision in which the vehicle is totaled and you owe more than it’s worth.

Jim Dodson
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A Florida injury lawyer, family man and avid cyclist who clients have trusted for over 25 years.