After a serious auto accident, figuring out how to deal with a heavily damaged vehicle is not always a simple matter. In some cases, a car may be so damaged that it is not possible or feasible to have it repaired. When a vehicle is considered a “total loss,” an insurance company will not typically pay to repair it. Instead, the insurance company will pay the owner for the value of the vehicle, or in some cases, replace the vehicle with a comparable one.
Dealing with insurance companies can be frustrating and stressful, especially if you do not understand the law. The experienced personal injury attorneys at Williams Elleby Howard & Easter, help accident victims who have suffered a personal injury with all aspects of their auto accident claims. If you would like to discuss your case, contact Williams Elleby Howard & Easter, today by calling 833-LEGALGA.
Total Loss Insurance Claims in Georgia
A vehicle is considered “totaled” if the cost of repairs is greater than the value that the vehicle would have after repairs. However, many insurance companies consider not only whether a vehicle is totaled, but also whether it is a “total loss.” Generally, a vehicle is considered a total loss if the cost of repairs plus the salvage value of the vehicle is greater than the value the vehicle would have after repairs. This is commonly referred to as the total loss formula.
Cost of Repairs > Value of Repaired Vehicle = Totaled
Cost of Repairs + Salvage Value > Value of Repaired Vehicle = Total Loss
Some states also have laws that create a total loss threshold, which dictate when an insurance company may consider a vehicle a total loss. Most states that have laws like these hold that an insurance company may only consider a vehicle a total loss if the cost of repairs is 75-80% of the value of the repaired vehicle. However, Georgia does not have statutory or regulatory total loss threshold. Insurance companies are free to make this determination on their own based their own total loss thresholds or the total loss formula. Therefore, whether a vehicle is considered a total loss following an accident depends not just on the extent of the damage, but also on the insurance company.
Total loss vehicle claims are governed by the Title 120 Chapter 2 Section 52.06 of the Official Code of Georgia. Under this law, “if the insurer determines the insured vehicle to be a total loss, and the insurance policy provides for the adjustment and settlement of first party vehicle claims on the basis of actual cash value or replacement, the insurer may elect to pay a cash equivalent settlement or replace the insured vehicle.”
What Do I Do if the Insurance Company Says My Vehicle is a Total Loss
If you have been in an accident and your insurance company has declared that your vehicle is a total loss, you should be prepared for the fact that you will only receive the fair market value of the vehicle. Georgia states that the fair market value is whatever it would cost “to purchase a comparable automobile by the same manufacturer, same model year, with similar body style, similar options and mileage, including all applicable taxes, license fees and other fees incident to the transfer of ownership of a comparable automobile.” By law, insurance companies are able to come up with this cost by simply finding comparable vehicles in the area that are for sale, or by consulting with the Kelley Blue Book (or a similar accepted source) valuation for a vehicle.
Insurance companies also have the option of providing an insured with a comparable replacement vehicle. The law states that “the insurer may elect to replace the insured vehicle, including all applicable taxes, license fees, and other fees necessary to transfer ownership.” However, an insured is under no obligation to accept an offered replacement vehicle. If a replacement vehicle is rejected, the insured gets the cash value.
For More Information, Contact Williams Elleby Howard & Easter, Today
Williams Elleby Howard & Easter, is dedicated to helping accident victims get the compensation they deserve. The personal injury attorneys at Williams Elleby Howard & Easter, understand how stressful motor vehicle accidents can be for victims and their families. That is why they work hard to provide thorough, compassionate, and effective service to each of their clients. If you have been in an accident and would like to discuss your case, contact Williams Elleby Howard & Easter, today by calling 833-LEGALGA.