As explained above, a total loss means the repair cost to fix your car, is higher than the “ fair market value” for your car. If your vehicle is determined to be a “total”, or “total loss”, the vehicle will usually not be repaired, and instead you will have to find a new or different car to replace the vehicle that was totaled. Some clients will keep their totaled car, take the money that represents the “fair market value” for their car, and try to repair the vehicle themselves. The Law Office of Adam Sorrells does not recommend doing this, although some “handy types” that are good with cars prefer it; if, for example, they were attached to the damaged car. You should be aware that if you keep a car that was declared a “total loss”, this will be reported to the California Department of Motor Vehicles (DMV), and your car will have a “ salvaged title ”. A salvaged title tells anybody you later try to sell the vehicle to, that it was previously considered a “total loss”, but you decided to fix the vehicle anyway.
Some cars are easy to put a value on, and some are not. Unfortunately, the law is stacked against you when it comes to replacing your car. The term “fair market value” means what it will cost to replace that car on the “open market”. The insurance company will offer to reimburse you for the “fair market value” for your car. This figure will often be much less than the purchase price of the vehicle, or what you think it is worth. The insurance company will deduct for (a) depreciation of the vehicle; (b) high mileage; (c) less than perfect condition; (d) any dents or pre-existing damage; (e) will not reimburse you for finance charges; (e) and will not consider (or will try not to include) custom or aftermarket parts.
If you have just paid money for new tires, engine, brakes, etc., they will not consider these items, as the car is assumed to have working tires, engine, brakes, etc.
It is often impossible or very difficult to replace your car with the money they want to offer you. This is one reason why it is important to have an attorney who is knowledgeable in the complexities of auto accident law, and insurance issues. We are often able to get the insurance companies to offer more money based on negotiating techniques, knowledge of the law, and our expertise.