A man who was hit by a car while riding his bike filed a lawsuit against the driver after he sustained injuries. The plaintiff claims that the driver should have been insured and has demanded $10,000 in damages.
If you have been involved in an accident that has caused your car to be totaled, it is important to understand how the insurance company will handle your claim. It is also important to understand the process of negotiating with the adjusters about what you are owed for your total loss.
Vehicle Total Loss Overview
An insurance adjuster examines an automobile accident and the damage to the vehicle in order to make a decision about compensation.
Under the following conditions, the insurance company will decide whether the occurrence qualifies as a complete loss accident:
- If the car cannot be fixed in a safe manner,
- If the cost of car repairs exceeds the vehicle’s worth, the vehicle should be scrapped.
- If the damage surpasses your state’s damage threshold. (In certain jurisdictions, if the damage is between 80% and 100% of the pre-accident value, the vehicle is considered totalled.)
What occurs next is determined by individual policies and insurance providers, although policyholders are often given the vehicle’s fair market value depending on its condition before to the accident.
Read more: What Is a Total Loss in a Car?
Vehicle Payout for Total Loss
The payment you get from your insurance provider is usually determined by the vehicle’s Actual Cash Value. This calculates how much you might have sold your car for prior to the complete loss accident.
The following factors determine the actual cash value:
- Model of the vehicle year
- Make of the vehicle
- Vehicle model
- Mileage
- Wear and strain on the body
- The vehicle’s condition
- Taxes and fees are included in the cost of replacement.
The sales tax and title and registration costs are usually covered by your insurance provider.
Read more: How to Calculate a Vehicle’s Total Loss
Total Loss Insurance Lawsuits
Entire loss class action lawsuits have been filed against many insurance firms for neglecting to account for taxes and other expenses when estimating the total loss of a car.
GEICO is one of the insurance companies that has been sued for complete loss. The insurance company allegedly made unreasonable reductions while determining the car value, according to these complaints. On similar cars, these deductions include “weighted” average deductions and condition adjustment deductions.
Sales tax and other fees “are components of ‘actual cash value’ under the policy,” according to total loss lawsuits.
Some policyholders claim that when buying or leasing a new car to replace a complete loss vehicle, expenses such as sales tax and title fees are required.
The amount of sales tax varies by state, but it may range from hundreds to thousands of dollars. When costs are included in, policyholders may face considerable financial hardship if they are not reimbursed.
For example, a GEICO policyholder in Florida who filed a complete loss insurance class action case was had to pay $75.25 to transfer her title and 6% of the new car’s worth in sales tax. It came to about $1,500 in all.
After her vehicle was destroyed in a car total loss accident in March 2018, a lady filed a total loss lawsuit against Permanent General Assurance in 2020, alleging that the insurance company underpaid her by neglecting to include sales tax in the payment she received.
In other class action cases, insurance firms are accused of reducing payments in various ways. A Louisiana man filed a complete loss class action complaint against Liberty Personal Car Insurance Company earlier this year, alleging identical things. The lawsuit claims that Liberty employs a third-party vendor to “artificially, capriciously, and deliberately” undervalue policyholder cars.
This method reportedly skirts insurance rules while costing customers tens of thousands of dollars. According to the complete loss class action complaint, Liberty valued the plaintiff’s car at almost $3,000 less than a reputable used motor price source.
If you have been involved in a total loss accident, and your car was not insured by collision insurance, then you may be entitled to compensation. The i totaled my car with no collision insurance is a lawsuit that has been filed against the company for not providing adequate coverage.
Frequently Asked Questions
What happens when your car gets totaled and you still owe money?
Your car will be auctioned off and the money will go to the bank.
Do you get money back for a totaled car?
If you were to be in a car accident and your car was totaled, the insurance company would pay out on your behalf.
What happens if you dont agree with a total loss adjuster?
If you do not agree with a total loss adjuster, you can file a complaint with the states insurance commissioner.
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