badly damaged vehicle

When Is My Car a Total Loss in California?

Occasionally, we see car accidents in California resulting in a totaled car. These car accidents don’t have to be as severe as a head-on collision, rollover, or a T-bone for a car to experience considerable damage beyond repair.

California total loss laws specify how insurance companies and other parties should handle a total loss. However, this process can be tricky, especially involving insurance companies.

In such a situation, having experienced car accident attorneys to guide you can help with this process.

Terms Associated With Total Loss

Like any other legal issue, specific terms are associated with totaled cars in California and elsewhere. The most commonly used terms include:

  • Total loss: A situation where an accident has damaged a vehicle beyond repair, or you’ll pay more to repair the damaged car than what the car is worth
  • Actual cash value (ACV): The value of your vehicle before the damage caused by the accident
  • Cost of repair: The costs you’ll meet for experts to repair your damaged car and revert it to a functioning condition
  • Salvage value: The amount of money you’ll gain after selling the damaged car in its current state
  • Total loss threshold: The legal point at which your insurance company considers your damaged car as totaled and is eligible for a salvage certificate from the California DMV

A totaled car in California means that your car is damaged beyond repair or the costs of repair exceed the actual cash value of the car.

California’s Total Loss Law

California total loss laws are contained in California Vehicle Code § 544 and § 11515. These codes direct individuals and insurance companies on how to handle damaged cars. These laws are also apparent when the insurance company can declare your damaged car totaled, also called the total loss threshold.

There are two main methods of determining the total loss threshold; a simple fixed percentage and the total loss formula. California is among the few states that deploy the total loss formula to determine the total loss:

Salvage value + Cost of repairs ≥ Actual Cash Value

According to this formula, insurance companies in California can only declare your car as totaled if the sum of the car’s salvage value and cost of repairs is the same as, or more than, the car’s actual cash value.

What’s the Insurance Company’s Role in Car Total Loss?

Insurance companies are usually at the center of total loss cases. After the accident, you must take the damaged car to a body shop where experts will evaluate the vehicle’s condition and provide a report. The insurer uses this report to determine the total loss threshold and the car’s value.

The insurance company will also determine if you are entitled to any compensation for damages caused by another party.

Whose Insurer Pays Your Totaled Car’s Value?

The party compensating you depends on the at-fault party and under which insurance policy you are filing the claim; yours or a third party.

Various insurance policies that might pay your car’s value after the accident include:

  • Standard liability: covers physical and property damages to other people due to an accident you caused.
  • Property damage liability:  pays for your car’s damages due to an accident caused by another driver.
  • Uninsured/underinsured motorist: covers if the negligent driver is not insured or has inadequate coverage.
  • Collision: applies if you collide with another car or a stationary object, such as a wall.
  • Comprehensive: applies if your accident was caused by non-collision factors such as natural disasters, theft, and vandalism.

In short, if another party is at-fault, their insurer will pay your totaled car’s value. On the other hand, if you are at-fault, your insurer will compensate for any damages you caused, and your collision insurance will cover your totaled car’s value.

What If I Disagree With the Insurer’s Determination of My Totaled Car?

The outcome of the total loss declaration might not be what you were expecting, leading to a disagreement between you and the insurance company. If that happens, there are several avenues you can follow to solve the issue.

If you disagree with the at-fault party’s insurance company, file a claim with your insurance company. Your policy will cover the value, and your insurer will pursue payments from the at-fault party’s insurer.

If you disagree with your insurance company, consider hiring your appraiser to inspect and value your car. You can also consult your local department of insurance for guidance.

Alternatively, consult your car accident attorney on your legal options.

Regardless of the avenue you’ll pursue, ensure you have evidence of why your car’s value is higher than the insurer’s. Some documentation include maintenance logs, vehicle upgrade reports, and the latest photos indicating the car’s pristine state warranting a re-evaluation.

What to Do With a Totaled Car

The first step after a car accident is taking care of your health and safety. After that, you can decide what to do with your totaled car.

The several options at your disposal include:

  • Sell it for scrap or parts
  • File a lawsuit against the negligent party for compensation and damage recovery
  • File an insurance claim with your insurer or the at-fault party’s insurer
  • Retain the damaged car as a collector’s item or for sentimentality
  • Donate it to charity
  • Cover for the damages and have it repaired out of pocket

Before choosing any of these options, it’s wise to consult an appraiser and car accident attorney for advice.

Contact the Car Accident Attorneys at LA Century Law

Severe car accident injuries can occur when a vehicle is totaled. The situation can be dire when you disagree with the insurer about the value of your car and the compensation you deserve for your injuries.

A knowledgeable car accident attorney at LA Century Law can scrutinize your case and guide you accordingly. We have extensive experience in seeking fair compensation for total loss car accidents and how to handle insurance companies.

To learn how we can help, contact us to schedule a consultation.

Car Accident FAQs

When is a car considered totaled?

When the car is damaged beyond repair or its actual cash value (ACV) is less than its repair costs.

Can I retain my totaled car after the insurance company is done with it?

While you can retain a totaled car, you’ll receive less value for it. Chances are the insurer will deduct its salvage value from its ACV. Instead of keeping it, donate it to charity, and you might enjoy a tax deduction.

Does a totaled car mean I can stop repaying my car loan?

Unfortunately no. You are legally obligated to complete your auto loan despite the total loss. The insurer will pay the lender your car’s value; you’ll meet any balances out of pocket if you lack gap insurance.

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