Being involved in a car accident is overwhelming, and it’s even more stressful when you find out your car has been declared a total loss. You’re probably asking yourself, What happens if my car is totaled in California? If you’re unsure about the next steps, the insurance claims process, or how you’ll be compensated, we’re here to help.
At the Law Offices of Ali Yousefi, P.C., we understand the challenges you face after a car accident. While insurance companies might try to seem like they’re on your side, their goal is to minimize their payout. You need an advocate who will ensure you get the compensation you deserve for your losses. Let’s break down what happens if your car is totaled and the steps you should take.
How Is a Car Declared a Total Loss in California?
In California, a car is generally considered a total loss when the cost to repair the vehicle exceeds a certain percentage of its actual cash value (ACV). Under California law, the threshold for determining whether a car is totaled is when the repair costs are equal to or greater than 100% of the vehicle’s ACV. However, insurance companies often apply their own standards and may declare a car a total loss if repairs exceed 75-80% of its value.
The ACV represents the market value of your car immediately before the accident, factoring in the make, model, year, mileage, and condition of the vehicle. If repairs are too costly, it’s deemed more practical to “total” the car rather than fix it.
California law outlines the procedures for a “total loss salvage vehicle,” which insurance companies must follow, including issuing a salvage certificate.
Insurance Claims Process: What to Expect
Once your car is deemed a total loss, your insurance company will initiate the settlement process. Here’s what typically happens:
ACV Calculation
Your insurance company will calculate the ACV of your vehicle based on its condition before the accident. This valuation considers the car’s age, mileage, and any prior damage, among other factors.
Settlement Offer
After determining the ACV, the insurance company will make you a settlement offer, which should cover the value of the vehicle. If you still owe money on a car loan, the payout will first go toward paying off the loan balance. If the settlement amount doesn’t cover your loan, you could be left with a balance unless you have gap insurance.
Negotiation
You don’t have to accept the first offer. You can negotiate if you believe your car’s value has been undervalued. This is where having legal representation is crucial—an experienced Sacramento car accident lawyer like Ali Yousefi can help ensure you’re not taken advantage of during this process.
Salvage Title Option
In some cases, you may be able to keep the vehicle and receive a reduced settlement. The car will then be issued a salvage title, meaning it can no longer be legally driven without undergoing significant repairs and inspections.
Compensation for a Totaled Car in California
If your car is totaled, the compensation you receive should cover the car’s actual cash value (ACV) minus any deductible outlined in your insurance policy. However, there are additional factors you should consider:
- Rental car expenses. If your policy includes rental coverage, you may be eligible for reimbursement for a rental car while your claim is being processed.
- Loss of use. Even if you don’t have rental coverage, you may be entitled to compensation for the inconvenience and loss of use of your vehicle. In California, this could range from $20 to $50 per day, depending on the specifics of your policy.
- Other out-of-pocket expenses. If you’ve had to pay for towing, storage fees, or other costs directly related to the accident, these may also be recoverable. Be sure to keep all receipts and records.
Your attorney can help you determine what expenses are compensable and how to ensure you receive what you are owed.
If My Car Is Totaled, What Happens to My Loan?
One of the most common concerns is how an outstanding car loan will be handled if your car is totaled. If the settlement amount doesn’t cover what you owe on your vehicle, you could be left with a loan balance. This is where gap insurance becomes essential. Gap insurance covers the difference between what your insurance pays and what you still owe on the car. Without gap insurance, you would be responsible for paying the remaining loan balance out of pocket.
What to Do If You Disagree with the Insurance Company’s Offer
If you believe the insurance company’s valuation of your car is too low, you have the right to dispute it. Here are some steps to take:
- Get your own valuation. Obtain independent estimates of your car’s ACV from local dealerships or online resources like Kelley Blue Book or Edmunds. These can serve as evidence when negotiating with your insurer.
- Provide evidence of your car’s condition. If your car had recent upgrades or was in excellent condition, provide photos, maintenance records, and receipts for repairs or new parts to support a higher valuation.
- Contact an attorney. When disputes arise, having legal representation can be crucial. An attorney can help you understand your rights and negotiate a fair settlement.
It is important to never settle for less than what you are rightfully entitled to. Once you have accepted a settlement, you cannot go back and ask for more, even if the amount is too low.
Protecting Your Rights After a Total Loss
After a car accident, you may feel pressured to accept the insurance company’s offer quickly, but it’s essential to understand your rights. Consulting with an experienced car accident lawyer ensures your best interests are considered, and you receive full compensation for your vehicle and any related expenses.
If you’ve been involved in a car accident and are wondering, “what happens if my car is totaled in California?” know that you don’t have to go through the process alone. At the Law Offices of Ali Yousefi, P.C., we’ve helped countless clients navigate the insurance claims process, ensuring they weren’t taken advantage of by insurance companies focused on minimizing payouts. If you have questions about what happens if your car is totaled or need help negotiating a fair settlement, contact us today. We’ll fight to protect your rights and ensure you receive the compensation you deserve.
Contact us today for a free consultation.
Attorney Ali Yousefi is the founder of Law Offices of Ali Yousefi, P.C., and has distinguished himself as one of the leading lawyers in California. Ali values that his work allows him to make a direct, positive impact on the lives of people who have experienced stressful or traumatic events.
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