claims series: total loss vs. repairable claims

2017 11 17 Say Blogphoto Claimsseries Totallossvsrepairable

So far in this claims series, we've touched on when to file a claim and the do's and don'ts of getting an estimate. Now let's talk claims in terms of what happens to your vehicle. In the auto claims world, the diagnosis for your vehicle can pretty much go one of two ways: repairable or total loss. Let's discuss.

What is a Repairable Claim?

A repairable claim is pretty straightforward: The damage done to your vehicle is covered under your insurance policy, repairable and worth repairing. This is the version that sends you into a typical claims process with getting an estimate, having an adjuster sign off on the estimate, having a shop do the repairs and getting on your way with a fixed car.

What is a Total Loss Claim?

Total loss, or having a totaled car, is a little less straightforward and tends to create the dramatic image of your car being smashed beyond recognition, but that's not always the case. Basically, a total loss means your vehicle is considered not worth or is incapable of repair. The repairable claim versus total loss decision ultimately falls on your insurance adjuster and state laws.

When will an adjuster declare a car a total loss?

There are a few ways your adjuster will declare your vehicle a total loss:

  • It's decided the repairs can't be completed safely
  • Your insurance company's standards to repair a vehicle aren't met, usually because the repair costs will be more expensive than or too close to the vehicle's value
  • Your state requires the insurance company to declare a total loss based on the amount of damage. Each state is different, but here the standards for our Say drivers' states:
    • Colorado: Declared a total loss if damage costs equal 100 percent of the vehicle's pre-accident value
    • Illinois: Using the "total loss formula," your car must be declared totaled if the cost of repairs plus the value your car holds as scrap material is more than the pre-accident value
    • Missouri: Declared a total loss if damage costs are 80 percent or more of the pre-accident value
    • Tennessee: Declared a total loss if damage costs are 75 percent or more of the pre-accident value

What happens to my car when it's totaled?

What happens to your car is really up to you. Most of the time, the insurance company will take your vehicle and give you the pre-accident value of your car (minus any deductibles). From there, your insurance company will most likely sell your car (or its parts) at an auto auction.

If you have a sentimental attachment to your vehicle or think you can safely make the repairs the insurance company is unwilling to make, then you can elect to keep your vehicle. Just know at that point your car will have a salvage title, which may cause issues or add some extra hoops to jump through. For instance, beyond making the repairs and needing to pass the DMVs inspection, some insurance companies may refuse to insure a salvage title or may treat the coverage for it differently.

At Say, we can insure salvage titles, but if you happen to get into another accident, the value of the car may be considered lower, making any payout less than what you would have received with a clean title.

What if I total a brand new car?

Depending on your insurance company and coverage, you may be able to receive a claims payout for the value of your car when you bought it versus the depreciated, pre-accident value. At Say, we include New Vehicle Replacement coverage in every Collision and Comprehensive coverage option. So as long as you were the original owner of the car, purchased it within 12 months of the accident and drove it for less than 15,000 miles, you could qualify for New Car Replacement with Say.

If you're not a Say driver, check with your insurance provider to see if you have a replacement option.

Need to file a claim with Say? Call (800) 225-5729 or log into your MySay account and click "claims" in the top navigation.

Not a Say driver yet, but liked the sound of our New Vehicle Replacement coverage option? Quote now!

 Want to see the rest of the claims series? Check out our posts on when to file a claim and the do's and don'ts of getting an estimate.

Posted November 17, 2017 in insurance know-how.