A car accident can turn your life upside down, especially when your vehicle is totalled in the process. Beyond the immediate shock and potential physical injuries resulting from the accident, you might also be facing the sudden loss of a primary mode of transportation. This could disrupt nearly every aspect of your daily life, from commuting to work to running errands, picking up kids from school, or simply enjoying the freedom of mobility.
Moreover, there’s a financial burden to consider. Dealing with insurance claims can be a tedious and complex process, often filled with uncertainties about how much compensation you can recover and when. These challenges are further compounded if you’re struggling to get to medical appointments or access treatment for any injuries you sustained in the accident.
Dealing with insurance companies, understanding your rights, and deciding your next steps can be intimidating and confusing at times like these. But you don’t have to do any of it alone. Wagners, a leading personal injury lawyer in Halifax, Nova Scotia, can support you.
We provide compassionate, tailored legal assistance to individuals just like you. We strive to understand your unique situation and offer the legal advice and representation you need to move forward. We can help you demand meaningful results and get your life back on track.
If you’re ready to take the first step toward your legal recovery, contact Wagners today for a free consultation in English, French, or Spanish.
What Does It Mean When a Car Is Totalled?
A car is typically considered “totalled” or a “write-off” when it gets damaged in a wreck and the estimated repair cost exceeds its current value. This situation is also known as a “total loss.”
Different insurance companies use various methods to calculate whether a vehicle is a total loss after an accident. But generally, if the repair costs of the damaged vehicle are more than its actual cash value (ACV), the car is deemed a total loss.
It’s worth noting that a total loss doesn’t just occur in instances of severe damage. Sometimes, even if a car is technically repairable, the costs associated with those repairs, such as parts and labour, could be higher than the car’s ACV. When this happens, the insurance company can declare it a total loss.
Upon such a declaration, the insurance company typically pays the policyholder the vehicle’s pre-accident ACV minus any deductible, allowing the policyholder to put that money toward a replacement vehicle. However, recovering a fair and reasonable settlement is no easy task, so it’s wise to obtain legal representation if your car is totalled in a crash.
What Can You Do with a Totalled Car?
You have a few options once your car is declared a total loss or “totalled” by an insurance company.
One of the most common is accepting the insurance company’s settlement offer. To calculate an offer, insurers usually calculate your car’s ACV, subtract your deductible, and offer you a cash payout for this amount. If you accept, the insurance company then typically takes possession of your car, which it might sell to a salvage yard to recover some of its costs.
Alternatively, you could retain and repair the vehicle or sell it to a salvage yard. If you decide to keep your car, you’ll still receive a cash settlement from the insurance company, but it will be less than the salvage value. And remember, if you choose to repair the vehicle, it must pass a safety inspection before you can re-register and drive it again.
Before you make any decisions, it’s essential to consult a lawyer who can help you understand the full implications of each option. Dealing with a totalled car can be complicated, but having experienced legal counsel from a firm like Wagners will make the process much smoother.
If My Airbags Deploy, Is My Car a Write-Off in Canada?
It depends. While an airbag deployment can indicate a significant impact, it does not automatically mean that the insurance company will consider your car a total loss or write-off. The decision to declare a car a write-off depends primarily on the cost of any repairs the vehicle requires versus the car’s pre-crash ACV.
Airbag replacement can indeed be expensive, but it’s just one component of the overall repair cost. Other vehicle damage, such as damage to the body, frame, or mechanical systems, will also factor into the total repair cost. If the combined cost of all necessary repairs, including airbag replacement, exceeds the ACV of your car, then your insurance company will likely declare it a total loss.
However, if your vehicle is newer, has a higher value, or sustained relatively minor damage, then the cost of replacing the airbags might not push the repair costs higher than the ACV. In that case, your car might not be written off, even if the airbags deployed.
What Happens If My Car Is a Write-Off and I Still Owe the Finance Company in Canada?
Things can get complicated quickly if you are involved in an accident while driving a financed car, and the vehicle is declared a total loss or write-off. In this scenario, the insurance company will typically pay the car’s ACV directly to the lienholder (the finance company) rather than to you.
The challenge arises if the remaining balance on your auto loan is greater than the ACV of your car. This situation, known as being “upside-down” or “underwater” on your loan, means you still owe the finance company even after it takes the insurance payout. If this happens, the responsibility for paying the remaining balance falls on you.
To protect against this possibility, some people opt for “gap” insurance when they finance or lease a new car. In fact, some lenders even require this type of coverage. Gap insurance covers the difference between the ACV of your car and the outstanding balance on your loan or lease, so you don’t have to pay out of pocket if your car is written off.
If you don’t have gap insurance and the insurance settlement doesn’t cover your auto loan balance, it’s essential to communicate with your lender about your obligations. This is also a time when legal advice is indispensable. Consulting a lawyer at a reputable firm like Wagners is the best way to understand the complexities of your situation and explore the options available to you.
My Car Is Totalled. What Does Insurance Pay?
When your car is totalled in an accident, your insurance company compensates you based on the vehicle’s ACV – your car’s market value immediately before the damage occurred.
Calculating a car’s ACV involves considering several factors. The insurance company will look at your vehicle’s make, model, age, mileage, overall condition, and other factors that might affect its value, such as special features or upgrades. They also account for depreciation – the reduction in your car’s value over time due to normal wear and tear.
Insurance companies often use industry-standard databases and software to determine a vehicle’s ACV. They will compare prices of similar vehicles in your local market or region, considering recent sales prices and listings.
Remember, the insurance company’s responsibility is to put you back in the position you were in before the accident, but its ultimate goal is to protect its profitability. If you believe the payout your insurer offers does not represent your vehicle’s value fairly, you may dispute it. This might involve presenting evidence such as maintenance records, receipts for recent upgrades, or other proof that your car was worth more than the offered amount.
How to Get the Most Money from Insurance for a Totalled Car
The best way to maximize your insurance settlement for a totalled car is to work with an experienced law firm like Wagners. They can help you by:
- Interpreting insurance policies – A lawyer can help you understand your policy’s fine print and the rights you have under it.
- Valuing your claim – Lawyers can provide a realistic valuation of your claim. They can assess factors such as car value, potential for liability, personal losses, and more.
- Negotiating with the insurance company – Insurance claims often involve vigorous negotiation. A lawyer can negotiate on your behalf to keep the pressure on the insurance company and ensure it is handling your claim promptly and fairly.
- Disputing ACV calculations – If you disagree with the insurer’s calculation of your car’s ACV, a lawyer can dispute this by presenting evidence of a higher value.
- Handling additional claims – If the accident injured you, a lawyer could also help you pursue an injury claim, potentially resulting in more compensation.
Get Help from a Totalled Car Lawyer in Canada Today
Losing your car in an accident is a major disruption, but you don’t have to let this setback define your future. It’s time to put the pieces back together and move forward. Wagners can provide the legal support you need.
Reclaim control by contacting us now for your free, no-obligation case review.