Getting into a car accident in New York can undoubtedly be a stressful experience, and finding out that your car has been totaled will only compound that stress. But how can you tell if a car may be ‘totaled’? What happens to your car? And how will you receive compensation after the accident? These are some of the most common questions people ask of us at Gabriel Law. In this blog, the team will step into the shoes of an accident injury lawyer in the Bronx and explain everything you need to know about protecting your rights and recovering from the loss of a totaled car.
Your car was totaled—what does it mean?
When we use the word ‘totaled,’ we mean that your vehicle has been declared a total loss by the insurance company. A car will be declared a total loss when its repair costs meet or exceed a certain percentage of the actual cash value (ACV) of the vehicle before the accident. In New York, the percentage threshold is 75% of the ACV—this means that if the repair cost of the vehicle meets or exceeds 75% of the car’s ACV, it will be declared a total loss.
How do we determine the Actual Cash Value (ACV) of the vehicle?
As mentioned above, the ACV refers to the value of a particular vehicle before the accident. To determine the ACV of your car, we must subtract the replacement costs from the depreciation of the vehicle. When calculating the depreciation of the car, we primarily consider the following:
- The age of the vehicle
- Condition
- Mileage
- Market demand
For example, consider that you are driving a 2018 Honda Civic, which you purchased for $15,000. In the event of an accident, the replacement cost would also be $15,000. When calculating the depreciation, the insurance company had deducted $2000 due to its high mileage, $1000 for wear and tear, and another $500 due to a previous accident. Based on the above information, the ACV of this particular 2018 Honda Civic would be $11,500.
ACV = Replacement Costs – Depreciation
ACV = 15,000 – (2000 + 1000 + 500)
ACV = 11,500
Therefore, in the event of an accident, your insurance company should pay you $11,500 minus any deductibles in your policy. However, should the repair costs be 75% or above the ACV, your car will be deemed a total loss.
What about car loans or leases on a totaled car?
Unfortunately, even if a car was totaled, you have to continue making payments on any loans and leases you might have on the car. When the car is totaled, the insurance company will first pay off any lenders and leaseholders before giving you the balance of the settlement, should any remain.
If you owe more than what your insurance settlement covers, you will need to pay the remainder out-of-pocket. Therefore, to protect from such a financial burden, we recommend that you have Guaranteed Auto Protection (GAP) insurance. While the premiums are quite high, it protects the drivers from having to pay out-of-pocket by covering the payment balances.
What should you do after your car is totaled?
When it comes to claiming compensation for your totaled car, expect an uphill battle with your insurance company. Therefore, to make sure that you have an advantage, or at the very least level the playing field for the settlement negotiation, we recommend that you do and not do the following:
- Immediately seek medical attention for your injuries.
- Document the scene of the accident and exchange contact information with the other party.
- Get an independent appraisal to counter the insurance provider’s lowball offers.
- Contact your insurance company and notify them about the crash.
- Contact an injury lawyer in the Bronx to learn about your rights and liabilities and discuss your legal options.
- Do not admit fault, apologize, or make any recorded statements.
Conclusion
Having your car declared a total loss can be an unfortunate and overwhelming experience. In the event you are faced with such a situation, understanding what a total loss means, calculating the actual cash value, and understanding all your rights and liabilities is a must in order to secure the most favorable outcome.
If you’re on the lookout for an attorney to help you through the process, then look no further than Gabriel Law. With over 50 years of combined experience, we’ve helped many New Yorkers with their car accident claims and lawsuits. At Gabriel Law, your victory is personal to us—schedule your free consultation with us today.
