Totaled Vehicle in Colorado Car Accident

Many people are unsure what happens after a total loss car accident. The process can be confusing, especially when dealing with insurance companies. At Bowman Law, we want to ensure you understand your rights and how Colorado law for total loss vehicles applies to your situation. 

When is a Car Considered Totaled?

A total loss vehicle in Colorado refers to a car damaged so severely that repairs cost more than the vehicle’s market value. In these situations, insurance companies do not cover repairs. Instead, they issue a payout based on the current value of the vehicle.

For example, imagine purchasing a vehicle for $20,000. Soon after, you’re rear-ended at high speed, causing significant damage. If repairs cost $22,000, the insurance company declares the car totaled because repair costs exceed its value.

What Happens with a Total Loss Vehicle

When dealing with a car accident totaled vehicle, the insurance company provides a payout based on the vehicle’s current market value, minus any applicable deductibles. You’ll need to file an insurance claim for a totaled car, and the responsible party’s insurance should cover the loss.

How Much is a Totaled Car Worth?

The payout after a car total loss insurance claim is based on the vehicle’s fair market value. Keep in mind:

• Market value is not the same as the sticker price
• The amount does not include outstanding loan or lease balances

You can estimate your car’s worth using resources like Kelley Blue Book, but many owners find the payout feels lower than expected.

Paying a Deductible After a Total Loss

If you caused the accident, your total loss vehicle insurance claim is handled under your own collision or comprehensive coverage. Typical deductibles are $500 to $1,000, deducted from the settlement.

When another driver is at fault, their insurance company is responsible for covering the loss, including the deductible.

How to Calculate Total Loss Value of a Vehicle

Determining the total loss value of a vehicle depends on fault and insurance coverage. If another party is responsible, their insurer pays the market value. Delays can happen, but your own insurance may cover the claim and seek reimbursement through subrogation.

Keeping a Totaled Vehicle

Under Colorado law for total loss vehicles, you can keep a totaled car, but strict regulations apply. Major components like the engine, brakes, and tires must be in working condition. A totaled vehicle cannot be legally driven until repaired, inspected, and retitled as “rebuilt.”

After obtaining a rebuilt title, limited insurance options may be available, often restricted to liability-only coverage.

Increasing Your Property Damage Valuation

If you are working with an insurance company on determining the value of your vehicle, keep in mind you do not have to accept the offer presented. You will have an opportunity to respond to the offer and, when you do, you may want to consider the following:

• The specific features of the vehicle
• Retail value (not trade-in value)
• Improvements and upgrades made to the vehicle recently, like new tires (Some policies do not cover aftermarket modifications)
• Comparable vehicles in the area, with similar mileage and features

It is important to do your research prior to negotiating. You should approach communications with the property damage insurance adjuster as an opportunity to negotiate. 

When settling total loss claims, some insurance companies can neglect to include certain costs and fees when calculating the settlement payment. These costs and fees include:

• Sales tax;
• Title transfer fees;
• Vehicle registration fees;
• License plate transfer fees;
• Other mandatory Colorado fees.

You may be entitled to pursue additional compensation from your insurance company if the costs of your claim and fees have not been included in the settlement for your total loss.

Can I Keep a Totaled Vehicle? 

The short answer is yes. You can certainly maintain possession of a totaled vehicle. Before you do, however, you may want to review Colorado law regarding salvaged vehicles. Under these rules, all the major parts and systems of the vehicle must be in working condition, including:

• Engine
• Transmission
• Tires
• Wheels
• Seats
• Exhaust
• Brakes

It is equally important to remember that, because a totaled vehicle cannot be driven legally, you will not likely be able to purchase insurance for it. Your vehicle would have to be repaired and inspected to be declared safe to operate. However, once your vehicle has been declared “rebuilt” from the salvaged title, you may be able to get insurance. That said, many insurance companies sell property-damage-liability only for salvaged vehicles. 

What Happens if I Total a Leased Car?

The same rules identified above are applicable to a leased vehicle. The responsible insurance carrier will pay the current market value of the leased vehicle minus deductibles. However, you should keep in mind the terms of the lease continue. Usually, the value of the car is less than what you owe on the lease, but you may have to cover the difference. 

There is one important exception. You will want to check your lease to see if you have Guaranteed Auto Protection (“GAP”) Insurance. GAP coverage is an optional form of insurance that would pay the difference between the current market value and what you owe. If you have GAP coverage, you may not have to pay out of pocket. 

Legal Help for Car Accident Total Loss Claims

We cannot stress enough the importance of consulting with a personal injury attorney following a car accident in Colorado. You should know most personal injury law firms in Colorado will not assist you with property damage because they do not receive a fee. Bowman Law is different. Our car accident attorneys specialize in personal injury and understand the importance of assisting our clients with all damage that result in a vehicle accident. We are happy to help clients with property damage. 

Our auto accident lawyers have extensive knowledge and expertise about the claims process. Do not fall victim to the underhanded tactics of an insurance company attempting to minimize your payout. You should speak with us to learn how to combat these maneuvers to protect your rights. 
Our law firm is located in Denver and serves the Front Range including Colorado Springs, Boulder, Fort Collins, Westminster, Lakewood, and Aurora.