What Happens If Your Car is Totaled and You’re Not at Fault
Even the simplest car accidents can be stressful and expensive. Dealing with insurance adjusters and getting the necessary repairs on your car can cost lots of time and money, and can be disruptive to your work and home life. But what about when a car accident leaves you without a car at all? That’s the case when a car accident results in a total loss.
Contrary to what some may believe, you won’t necessarily be made completely whole after a total loss - even if you can prove that the other driver was at fault.
Here’s what you need to know if your car is totaled in an accident caused by another driver.
First - what does it mean for a car to be totaled?
Typically, an insurance company will declare a car a total loss when the cost of repairing the car exceeds a certain percentage of the car’s Fair Market Value (FMV). This is a minimum percentage determined by the state; individual states can set a higher percentage, but not a lower one. Oregon has a fairly high threshold, at 80%.
Some states do not use a percentage threshold, but instead use what is called a total loss formula (TLF).
In other words, insurers will total a car if it is not financially efficient to repair the car. Some cars are so damaged from accidents that it would cost too much to bring them back to an acceptable level of safety and functionality. The total loss system is a remedy for this situation, designed to compensate drivers for their losses.
How does the insurance company determine the cost of repairs?
Insurance companies consider any or all of the following when determining whether a car is a total loss:
- Estimates from independent evaluation companies, professional appraisers, guidebooks, and dealers
- Vehicle year, make, and model
- Vehicle mileage
- Geographic location
- Recent upgrades or maintenance
- Condition of the body of the car
To learn more, read the state guidelines for total losses in Oregon (PDF).
Okay - so who pays for the loss?
When someone else is at fault for an accident that results in the total loss of your vehicle, your first question is probably, who pays? This depends on state laws, which fall into two categories: fault and no-fault models.
Oregon is a “fault” state
In a fault state, like Oregon, you can only receive payment for car accident damages if you can prove that someone was at fault. Once fault is proven, it is the at-fault driver’s insurer that pays for damages, including the total loss. This is the most common way to handle accident fault - 38 states use this model.
This is in contrast to a no fault state, in which personal protection takes precedence over fault. This means you (i.e., your insurer) are responsible for your own losses or medical expenses resulting from the accident, even if you weren’t at fault.
In sum, if your car is totaled in an accident caused by another driver in Oregon, you will need to prove the other driver was at fault so that their insurer will cover the loss of your vehicle. This process can be time-consuming, complex, and expensive, which is why legal counsel can be especially helpful.
Do I have to accept the insurer’s offer?
Even though the total loss system is designed to compensate drivers for a loss of vehicle regardless of fault, it’s unfortunately common for drivers to lose money on a totaled car.
Insurers base their offers on the car’s current value. If you bought the car a long time ago, its value will have decreased significantly, resulting in a much lower offer of compensation than what you originally paid. This means there’s no guarantee the insurer’s offer will be enough to replace the car.
It’s also not uncommon for drivers to still owe money on a totaled car. In this case, you’ll need comprehensive coverage and collision coverage to help cover the loss for both you and your lender.
In any of these cases, you may be tempted to contest the insurer’s offer. Here’s what you need to know:
- You have the burden of proof. You will need to prove both the car’s actual condition and the car’s actual value. This means you’ll need to consult with your own appraisers or other professionals, and pay out of your own pocket for their services. The insurer has no obligation to reimburse you for these services if your estimates are lower or the same as the insurer’s.
- It’s extremely rare for insurers to let drivers keep totaled cars. This is partly due to the safety risk of returning a totaled car to the road. Cars often have invisible damages after major car accidents; the insurer covers itself by taking the car off the road.
- If you are successful, you may have more challenges ahead. If your intention is to get the car repaired and driving again, you may find it difficult to make the repairs affordably. You may also have a hard time getting the car insured. Finally, it can be challenging to sell a totaled car. Again, because damages after an accident can be invisible, totaled cars pose a safety risk on the road. Insurance companies have the capital and resources to rehabilitate totaled cars, but you may find the effort and money are not worth the result.
Making sure you recover
Again, in a fault state like Oregon, you must prove fault in order to be paid for your losses. This can mean jumping through lots of bureaucratic hoops, from filing a police report to talking to insurance adjusters from both your insurer and the other driver’s.
You’ll need to keep careful records - such as pictures of your car’s damage - and cooperate with insurers who may be motivated to pay out as little as possible. As such, a car accident that results in a total loss through no fault of your own can be complex and expensive. And that’s if there aren’t even personal injuries involved.