Here’s What Happens When Your Car is Totaled
A car is totaled if an appraiser determines that the value of the damages to a car exceeds the car’s actual market value. Here is what happens when your car is totaled in California.
If a car is totaled in a motor vehicle accident and an individual is not at fault, they may be able to receive compensation for the damages. A list of steps to take following a motor vehicle accident and the subsequent filing process is detailed below.
Immediately Following the Accident:
1. Call 9-1-1 immediately if there are any injuries. Additionally, if the accident was a hit and run, the police must be notified.
2. Do not flee. California law requires that all involved parties stay at the scene of a traffic accident.
3. Obtain the following information from all of the involved parties (including passengers and witnesses): names, driver’s license numbers, addresses, phone numbers, license places, and vehicle identification numbers. The California Department of Insurance recommends asking to see the vehicle registrations and drivers licenses in order to confirm the information.
4. If possible, take photographs and/or video footage of the damage done to the car.
5. File an insurance claim. An individual should immediately inform the car insurance company, regardless of whether or not they were responsible for the accident. This is called filing a car insurance claim. More information on filing an insurance claim will be detailed below.
6. If desired, the individual should contact an experienced personal injury attorney. Auto insurance companies usually prioritize the interests of the company over that of the policy holder, and a California personal injury lawyer can help navigate the filing process.
7. If there are any injuries, or if the damages surpass $750.00, the accident must be reported within 10 days to the California Department of Motor Vehicles. If the Department is not notified within the time frame, the involved parties’ driver’s licenses may be suspended. The form to report a traffic accident to the California DMV can be found here.
How to File an Insurance Claim
This section will elaborate on step 4 of the above process: filing an insurance claim. As stated above, an individual should notify their first-party car insurance company. A first party insurance claim is one that is made by the policyholder (the individual being insured) to their insurance company. In this case, it is being made by the individual whose car was totaled to their car insurance company. The first-party car insurance company is the one with which the individual holds an insurance policy that will protect them against certain losses. Other examples of first-party insurance include health and homeowner’s insurance.
In order to file the insurance claim, an individual can call the telephone number on their insurance card, or through the insurance company’s website or app. While driving without auto insurance is illegal in the state of California, if an individual’s car is not insured, and they were partially or not at all responsible for the accident, they can file the claim with the insurance company of the other party.
Appraisal
The second step in a motor vehicle accident insurance claim is appraisal. The insurance company will have the car appraised to calculate the value of the vehicle after damages. A car will be declared totaled if the value of the damages exceeds the actual cash value (or fair market value) of the vehicle. The appraisal process also determines the amount that the policyholder will be paid: if the policyholder is not at fault for the accident, then they will be paid the car’s value minus the deductible owed by the policyholder. If the individual is determined to be partially or completely at fault for the accident, then the percentage of “blame” they are determined to have (according to the settlement) will be deducted from the coverage. The insurance company will write a check for the amount of damages that they will cover.
If the car is determined to be totaled, the insurance company will declare the vehicle to be a “total loss salvage.” In this case, the California Department of Motor Vehicles can issue a salvage certificate. An application for a salvage certificate can be found on the California DMV website along with more information regarding total loss vehicles.
Disputing an Appraisal Value
If there is a dispute between the policyholder and the insurance company regarding the amount being offered for the losses, most insurance policies have a provision in which the policyholder can choose their own appraiser. In this event, both the company’s appraiser and the policyholder’s appraiser will individually determine the claim damages, and then attempt to reach an agreement with a neutral umpire: an impartial appraiser. If they cannot come to an agreement, the umpire will make the final decision. Both the insurance company and policyholder must pay their appraisal fees, and the umpire fee will be shared between both parties.
Who pays for the damages?
California is a comparative fault state. That means that an individual involved in an accident can still collect compensatory damages even if they are partially to blame. This is determined numerically: if an individual is found to be 75% at fault for the accident, then they are only liable to pay for 75% of the damages. Compensatory damages involved in car accidents typically include medical bills, car repair bills, and even lost wages if the individual missed income due to being medically incapacitated from the accident.
Related: California Pure Comparative Negligence
In terms of a car accident, the party responsible for the accident (or their insurance company) must cover the compensatory damages for the other party. If not settled out of court, responsibility for a car accident is determined in California court by a jury. The jury must decide whether the accident was caused by negligence on the part of either party, and the responsibility to cover the compensatory damages will be divided accordingly.
Subrogation
In order to understand subrogation, one must first understand what an insurance deductible is. A deductible is the amount of money that a policyholder must pay before the insurance company covers the rest of the damages. This is agreed upon in the insurance policy, and is usually $500 or $1,000. Typically, an insurance policy with a higher deductible will be cheaper. If an individual is not at fault in the accident, the insurance company is required to ask the third party (usually the insurance company of the party at fault) to repay the deductible along with the damages covered by the policy.
The first thing an individual should do after a car accident is file a claim with their insurance company. However, if the policyholder is not at fault, the insurance company has the right to obtain reimbursement from the at-fault party. This process is called subrogation. The individual policyholder is typically not responsible for the subrogation process. However, the insurance company is required to include the policyholder’s deductible in the subrogation process, and will notify the policyholder if some (or all) of the deductible is recovered.
Negotiating Out of Court
Many California car accident cases are negotiated outside of court. If possible, this is the recommended way to settle a car accident case, because lawsuits can be expensive and may take years to reach a verdict. The settlement negotiated outside of court will have to be agreed to by all involved parties. It can happen in a courtroom, or in a less formal setting. However, it is recommended that an individual obtain a lawyer to represent them.
In the settlement negotiations, the at-fault parties must be determined legally responsible according to California negligence laws. More information on California negligence laws can be found here.
Once the parties at fault are determined, one party will write a demand letter to the other(s). The demand letter will typically include a calculation of damages, and propose an amount for the settlement. More details about writing a personal injury demand letter can be found here. The other party (or parties) must then decide whether or not to accept legal liability as detailed in the demand letter, and whether or not to accept the compensation amount. If they do, then the parties will sign an agreement. If they do not, the lawyer may file a lawsuit, and the settlement negotiations will continue alongside the court proceeding.
Small Claims Court
Lawsuits that are settled in court without attorney representation for either party often take place in small claims court. More information about suing someone in small claims court can be found here.
Negotiating in Court
If an individual (called a “plaintiff”) files a personal injury lawsuit against the other party involved in the accident, then the case will be heard by a jury in California court. The jury will need to determine whether or not the accident was caused by negligence on the part of the defendant. They must decide whether:
1. The defendant owed a duty of care to the plaintiff which was breached. Duty of care is a legally defined obligation according to a California common law, or a special relationship (such as teachers to students). In the case of a motor vehicle accident, drivers have a duty of care to obey traffic laws so as to avoid injuring other parties on the road. The violation of a duty of care may be proven through:
- Footage (such as photographs taken at the scene of the accident),
- Witnesses to the accident
- Police reports of the accident
- Testimony about the defendant’s skill level (in this case, their driving experience),
- Accident reconstructions,
- Whether or not the defendant should have been able to avoid the accident
2. The defendant breached the duty of care through their own negligence. In California law, negligence is defined as doing something that a reasonable person would not have done in that situation, or failing to do something that a reasonable person would have done in that situation. While that may sound vague, there are concrete actions that qualify as negligence in a car accident. Some examples include:
- The driver neglected to stop at a red light, yield to pedestrians, or obey the speed limit.
- The driver was not vigilant. This could mean that they were checking their phone, or experiencing other distractions (such as a teenager driving with a large, rowdy group of friends).
- The driver was under the influence of drugs or alcohol.
3. The defendant’s negligence caused the damages for which the plaintiff is filing. In other words, the defendant’s breach of the duty of care (for example, them looking at their cell phone) directly resulted in the accident.
More information on grounds to file a car accident lawsuit can be found here.
What if the at-fault party is uninsured?
According to California law, it is illegal to drive without having at least $15,000 of death or bodily injury insurance per person, $30,000 for the total death or bodily injury insurance for all involved parties, and $5,000 of property damage insurance. However, California does not require all drivers to have uninsured motorist coverage, which comes into effect if the driver at fault is uninsured or if their insurance policy does not cover all of the damages. California law does require all insurance companies to offer this type of insurance to drivers, and it is highly recommended that individuals purchase this insurance in order to protect themselves against accidents with uninsured motorists.
Contact Us
If you have any more questions about what happens when your car is totaled in California, get your free consultation with one of our California Personal Injury Attorneys today! We won’t charge you a dime unless you win your case.