No matter how safely you drive, a wreck can happen to the best of us. There's a 25% chance you'll crash a car in your lifetime. If you do, you'll most likely have to deal with a damaged vehicle and an insurance claim. So how much damage would it take for the insurance company to "total" your vehicle? That's based on a number of factors. Steve Walker is a State Farm Claims Manager. He says, they look at the amount of the repair estimate, the salvage value, how long it may take to repair the vehicle because the rental may become an issue at some point as well.
According to Alabama state law, if the repair estimate is 75% or more of the retail book value of the vehicle then that vehicle must be deemed a total loss. But Lloyd Bush who owns an auto body company in Gardendale says some insurance companies will total out a vehicle with less damage than that. "A lot of the insurances are now going at 65% because salvage values are so high right now that they're able to sell it and come out better."
When you think of a totaled car, you probably imagine a twisted, mangled wreck. But an older car that's lost much of its value through depreciation can be "totaled" after a simple fender bender. Mark Fowler is with the Alabama State Department of Insurance in Montgomery. He says, "They've had the car for a long time, it's depreciated down to a value that's not very much. It may have a lot of sentimental value, it may be running great, but the book value of the car is just not a lot. It probably doesn't take very much of an accident to get it above that 75% threshold. And if it goes above that, the insurance company is not going to pay to repair it."
According to Bush, "If we had a 2000 or 2001 popular car, say a Toyota Camry, if you were to need a front bumper, headlight and a fender and a hood which is not a lot that could very likely total that car." Bush estimates the "magic number" for vehicles is not long after you get them paid off. "Really at about 6 or 7 years to 8 years old is when that value seems to really drop out of that car when it comes to wrecks and totals."
If the insurance company totals the vehicle, they take the car and you get a check for the now depreciated value of the vehicle. That could be an amount that may make it difficult to buy another car you consider as reliable as the one you wrecked. So Bush says some owners reject the insurance company's money and opt to keep their beat up car. "They will drive that vehicle as it is, to keep their car from totaling because they just can't afford to buy another vehicle at this point." Fowler says, that's a perfectly legal option. "You can absolutely keep your car. You can *not* take the claim and repair it yourself or keep your car." But you need to talk to the insurance company and the Alabama Department of Revenue if you decide to do that to find out if your vehicle's title will be affected. Walker says, "By law we have to report that to the state of Alabama if the vehicle is a total loss."
Obviously auto insurance companies aren't in the business to pay you more than your car is worth. That is unless you purchase some type of additional "gap" coverage which will cost you more. The best advice from the state department of insurance is to know your car's value and your auto insurance policy.
Auto body man Bush says if an airbag deploys in a car more than 5 years old, there's a good chance it'll be "totaled". Not only are the air bags themselves expensive to replace, but Bush says often sensors, control modules and seat belts will have to checked and possibly replaced in those cars as well.
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