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    Totaled car

    Many cars that are considered "totaled," are obvious to the plain observer. But some minor accidents on older cars can produce an insurance write off due to the high costs of repair. (Marianne O'Leary, Flickr).

    by: Craig Howie | AOL Autos
     
    California resident Chris Berry knows a thing or two about having his car totaled: It's happened to him three times. Particularly scary was the time his car was hit at speed, bending its frame and leaving it a total loss, by a driver who ran a red light then refused to admit he had done so.

    About five million vehicles are totaled in the US every year (sometimes called a "total loss" or "write off"), or about 20 per cent of those involved in insurance claims every year. But what happens when your car is deemed totaled? How long does the process take to complete? Where does your car go once it's been declared a write-off? And does it affect your auto insurance? We take a look.

    Berry says he's generally had satisfactory experiences with insurance companies since his first claim in 1997, when his 10-year-old Mercury Marquis was rear-ended on a freeway as he was driving north to San Francisco. He says the $1200 damage to his car was -- according to his insurance company -- more than the car was worth and, after a six-week police investigation, he soon got his check from the insurer.

    "It was a four-car accident," Berry said. "I got hit from the rear and the side, and I was the only person in that who wasn't at fault."

    How A Car Is Defined As "Totaled"
    Berry went through two more "totalings," receiving a payment from his insurance company each time. In both of his unfortunate incidents, the cost of fixing his car was more than its inherent value.

    Kip Diggs, a spokesman for State Farm Auto Insurance, defines a totaling, or "write off," as happening when "the cost of repair of the vehicle plus the probable cost of the salvage when sold is worth more than the actual cash value of the vehicle."

    A common misconception is that major damage is the prime driver behind a car getting totaled. In fact, that's not a deciding factor; it's only about the costs.

    As an example, a fender bender on a 20-year-old Chevy truck might end up in a totaling while major damage on a brand-new Lexus might not. If the costs of the repair are more than the vehicle's value, she's totaled. If not, repairs are usually made.

    Insurance companies figure out the costs and vehicle values based on their own formulas for repair jobs. Some vehicles are totaled if the repairs are found to be at 51% of the car's value, while other companies in some instances use 80%.

    What If You Want To Keep It?
    Generally, drivers are happy to give up their car if it is deemed totaled. It's usually a pile of metal and rubber. But, in some cases, drivers look to keep their vehicle and repair it.

    If your vehicle has been in an accident, you can request that you keep it, but this must be done very early in the process. The insurance company would then take out the costs of your deductible and the money they would have received at salvage, then give you the remainder of the car's value (often called the "actual cash value").
     
    The Process
    In the event of any wreck, a driver should record details of the scene in writing and by camera and exchange details with any other driver involved. Contact with the police, including a police report, is necessary.

    Diggs says that an insurance company will use these written records alongside the police report to assess who is liable for the smash and then decide if the car is worth fixing or is a total loss. An insurance company appraiser, called a claims adjuster, oversees the process.

    "If the other driver is at fault, their insurance will pay you the value of your car plus any additional damages that might apply," Diggs said. "There may be medical bills involved, or there may be items in the car that are damaged. If you're not at fault, the cost to your insurance company is almost nil, and there would not be an increase in your rates.

    "If the other insurance company, for whatever reason, isn't acting as promptly as you'd like in handling the claim to your satisfaction, another outlet is to use your own collision coverage to go through the process of determining if the vehicle is a total loss. Your insurance company may pay for your vehicle and then go back to another insurance company through a process called subrogation."

    The time it takes to determine a total loss can be anywhere from one week to two months. Diggs says that in instances where it is obvious a car is totaled -- if a car has burned down to its shell, for example -- then assessing is easy. In cases where it's not so clear-cut whether a car is a write-off, a consumer may take their vehicle for an estimate of the damage. In the event a car is not drivable, an estimator may be sent out by the insurance company. 

    Diggs says a consumer may want to get two or three independent estimates.  "You want to have that proof that the car is going to cost more to repair."

    What Happens To Your Totaled Car
    After the claim is handled and settled, the totaled vehicle becomes the property of the insurance company.

    Vehicles then typically go to a public auction, where they are sold to junk yards or salvage operations.

    "They'll salvage what they can," Diggs aid. "Those parts will go back into the market and be sold to other drivers."

    Many parts from totaled cars reappear into the market as used parts or remanufactured parts when they are combined with other new materials and refreshed and inspected for defects.

    Read More About Car Insurance:

    - Smart insurance buying
    - Cut Your Car Insurance In Half
    - Confessions of an Auto Insurance Agent

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    Discuss
    1 - 13 of 13 Comments
    dallasdalpat Apr 17, 2010 1:47 PM
    SORRY STXBJ. THE NAME SHOULD BE RIPPERMAN 7197191
    Report This
    dallasdalpat Apr 17, 2010 1:44 PM
    STXBJ. YOU MUST BE IN CALHOOTS, WITH THE INSURANCE COMPANIES.
    Report This
    dickbyrne9 Apr 04, 2010 6:36 PM
    Allstate must use CCC (certified collateral corp) evaluations to determine the price of your car. This is impartial and fair.
    Report This
    abchb844 Mar 21, 2010 1:26 PM
    Sorry, this article a YADDA YADDA and NOT all that factual in regard to INTEGRITY of insurance claim process. They regularly LOW BALL and do al possible to intimadate acceptance of THEIR offer . HAVE EXPERIENCE with ALLSTATE using a "market value" based off a car that HAD been in previous accident, repo'd and a "dealer" trade around --was used in THEIR report as a comparison for our vehicle , 3yrs old, pristine /maintained , not a scaratch and less than 10K miles a year of ownership and NO PRIOR ACCIDENT damage as never had had such !! ALLSTATE IS A RIP OFF. Police report put negligence on other driver who was talking on cell and REAR ENDED US as we had stopped due to a LARGE TRUCK BLOCKING THE LANES as IT entered a drive. We just missed by a hairs breadth being smashed into the truck and in the car my 11 yr old son and his grandmother on way to HER heart rehabilitiation therapy after quad by pass surgury !! ALLSTATE treated us criminally as if WE were the causitive of the accident --this after we BUT asked for FAIR market value and coverage of medical treatment (which we even halted as could NOT afford to continue, caused ramifications /physical distress afterward as an ongoing outcome !) ALLSTATE HAS NO INTEGRITY and seeks but profitible outcomes that serve to fill their coffers and NO concern to FAIR BIZ PRACTICES !! Even the "company" that they use TO EVALUATE is an offshoot , IT IS A RIGGED SYSTEM that unless YOU are able to afford proper legal assistance, YOU LOSE while the insurer, the "evaluator", the medical and lawyers reap vast PROFITS and YOU are NOT MADE WHOLE to PRE-accident conditions !!! HURUMPH and thensome !!!
    Report This
    papcollins Mar 13, 2010 9:35 AM
    Even if you are not at fault, your insurance company may raise your rate because "you have a tendency to be in the wrong place at the wrong time." Happened to me after two instances where my vehicle ******* while I was stopped at a red traffic light.
    Report This
    charles3252 Dec 15, 2009 8:52 AM
    A CAR IS NEVER AN INVESTMENT, YOU 'RE AT A LOSS AS THE TIRES LEAVE THE DEALER'S PARKING LOT. WHY DO YOU THINK THEY ARE CALL DEALERS? INSURANCE COMPANIES CAN'T WAIT TO TOTAL YOUR VEHICLE: YOUR PREMIUMS GO UP BECAUSE OF AN ACCIDENT AND YOU HAVE TO GET ANOTHER VEHICLE, USUALLY A NEWER VEHICLE, WHICH REQUIRES A HIGHER PREMIUM. THIS IS THE AMERICAN ECONOMIC SYSTEM ****** BEST.
    Report This
    stsaline64 Dec 15, 2009 6:55 AM
    Write a novel and people can post what they want, like on many webistes, and who's you people, maybe your talking about yourself. Go and get ripped you might feel better......
    Report This
    dn00000017990534 Dec 14, 2009 6:32 PM
    If you elect to get your car repaired, and the damage was significant, you can also seek 'dimunition of value' from the insurance company that paid for the repairs. Diminution of value is the difference between what the car would have fetched at sale prior to the accident, compared to what it will fetch after being in an accident. Even though it's 'good as new' the value has been diminished due to the accident. Sometimes the dimunition of value payment can run in the many hundreds of dollars. To qualify to a 'DV' payment, you need to have the car appraised by a reputable car valuation expert or appraiser, and have them render their opinion of 'DV' in writing to the insurance company rep handling your claim.
    Report This
    dn00000017990534 Dec 14, 2009 6:32 PM
    If you elect to get your car repaired, and the damage was significant, you can also seek 'dimunition of value' from the insurance company that paid for the repairs. Diminution of value is the difference between what the car would have fetched at sale prior to the accident, compared to what it will fetch after being in an accident. Even though it's 'good as new' the value has been diminished due to the accident. Sometimes the dimunition of value payment can run in the many hundreds of dollars. To qualify to a 'DV' payment, you need to have the car appraised by a reputable car valuation expert or appraiser, and have them render their opinion of 'DV' in writing to the insurance company rep handling your claim.
    Report This
    noother Dec 14, 2009 6:17 PM
    This is how it truly goes down. I also own a body shop that deals with this daily. I also have some relatives that work in the auto insurance industry, Auto claims to be exact. The rule of thumb is if it's under 70% repair costs to Value, Chances are it will be fixed. If the costs are over 70% then it's totaled. The value is determined by current market of your particular car. Most insurance companies use an independent company that does nothing but establish values of vehicles, based in book values, Market analysis, condition of the vehicle, Mileage, prior damages that it had before it *******, Recent repairs that you have receipts for, and optional equipment. They don't just pick figures out of the sky. It takes a bit of research to establish the true value of a vehicle. Many people THINK their car is worth a lot of money, simply because they owe a lot on it. What is owed on a loan has no bearing on the value. What the insurance company owes you is what it takes to put you back to what you had before the accident happened. If you're driving a Chevrolet worth $2000, they certainly don't owe you a $30,000 Porsche, because you are having trouble locating a similar car. If you're driving a 1992 car, they don't owe you a 2009. They owe you another 1992. After all the research, an insurance company offers you fair market value, at full retail value, which is the price you can expect to pay at a dealer. An individual almost never can sell their car for full retail. Private party values are lower, but the insurance company pays full retail. Most cars that are totaled do go to junk yards and sold as parts. Rebuilding a car isn't always that profitable. Remember, the cost to repair exceeded the value to repair. If a car is rebuilt, taking a car that'***** in the rear, and taking another that'***** in the front, and cutting them both in half and putting them back together is a very acceptable procedure, IF it's done correctly and in a quality manner. Not every rebuilder is a butcher, and can reconstruct a car to be as good as it was when it rolled off the assembly line. Think about it, That car started out as a big pile of parts at the factory, and welded together to become a car. Removing the bad parts, and replacing them with good parts isn't any different than assembling it at the factory, again, IF it's done correctly. Some repairs are better than factory, because a quality repair has closer tolerences than factory, and is hand built to meet these closer tolerences. There are rebuilders that do substandard work, just like in any other business, but there are others that take pride in their work and do it correctly. But the insurance company isn't the demon here, Actually, there isn't a stronger buyer for your car. They pay a realistic price for what it is. Chances are you will find many similar cars cheaper by buying from a private party for the exact same car.
    Report This
    tee77jay Nov 18, 2009 12:53 PM
    Insurance companies never lose money on your total loss. Figuring in the premiums they've collected over the years, salvage value and paying you, most of the time, a low ball figure on your car. Also, please don't be fooled that these vehicles are parted out and then crushed. 50% of the time or more, they are sold to a rebuilder by the insurance company with a CLEAR title, so the rebuilder can do a half a&& job and then resell it to some innocent consumer who doesn't know what they are buying. Your insurance companies know this and could care less these cars are back on the road with paper stuffed air bags or vehicles that have been clipped, two wrecked cars cut in half and the good parts welded shoddily together. Some insurance companies have been sued over this issue but you never here about it in the news and the government doesn't care because the ins. companies have the government in their lobbyist's pocket. Believe me you are not being taken care of by the "good hands people", "they are not on your side" and "they are NOT your good neighbor", they are nothing more than greedy bean counters out to make as much money on your misery as possible. I know, I deal with it every day in the auto body repair industry. But they have plenty of money to sway you with their billion dollar advertising campaigns. When you have an accident go to a reputable collision repair facility, one recommended by your friends or neighbor, to help settle your claim so you don't get screwed with a poor repair or low settlement. We just fix cars but we can give you pointers on how to protect yourself and your 2nd largest investment.
    Report This
    ripperman7197191 Nov 15, 2009 8:42 PM
    i wish when you people make comment on here first know your facts not what you think it should be .
    Report This
    stxbj Nov 15, 2009 8:15 PM
    BULL ****.. WHAT EXACTLY IS THAT LAW THAT SAYS AN insurance company can total cars as they please (for only cosmetic damages/fender benders... that I'm not even at fault)????
    Report This
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    What happens when your car is deemed totaled? Where does your car go once it's been declared a write-off? And does it affect your auto insurance? We take a look.
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