Totaled Vehicle in Colorado Car Accident

Jerry Bowman, Owner and Managing Attorney

Car Accidents
April 3, 2024
Totaled Vehicle in Colorado Car Accident

It is not uncommon to have questions relating to a vehicle being totaled following a car accident in Colorado. This is because the concept of a total loss can be confusing. The car accident lawyers at Bowman Law prepared this article to discuss in detail everything you need to know about a totaled vehicle in Colorado. 

When is a Car Totaled?

A total loss means a vehicle was damaged so badly that it would cost more for repairs than the vehicle is worth. This happens when a repair estimate exceeds the value of the vehicle. When an insurance company determines a vehicle is totaled, there is no repair process. Rather, the vehicle owner will receive compensation based on the vehicle’s value. 

For example, assume you purchased a vehicle for $20,000.00. After closing on the purchase, you leave the dealership with a sense of excitement for the new purchase. Suddenly, you are rear-ended at a high rate of speed, causing significant damage to your new vehicle. When you take your vehicle to a body shop, you learn it would cost $22,000.00 to repair the vehicle. In that situation, the insurance carrier will determine your vehicle is totaled because it would cost more to fix it than it would be worth. 

A close-up of a totaled car

What Happens if My Car is Totaled? 

Unfortunately, no matter how much you loved the vehicle, a totaled car will not be repaired. Instead, you will have to file a claim with the responsible insurance company. Regarding the value of your car and insurance company payout, the responsible insurance company should pay you the current market value of the vehicle minus a deductible. 

How Much Is My Car Worth?

When a vehicle is a total loss, the at-fault driver’s insurance company will pay the current market value of the vehicle subject to the available coverage. See the Kelley Blue Book value of your car for an idea of what the current market value is for your vehicle. Importantly, current market value is not the same as the sticker price of the vehicle. The current market value is not going to equal the amount you paid for the vehicle and does not include how much is left on the loan or lease. The unfortunate reality is that you may be left with less than what you believe the value should be. 

Do I Pay a Deductible if my Car Is Totaled?

If you were at fault for the accident, you will likely owe a deductible for any repairs to your vehicle. In this situation, the payment would likely be coming from collision or comprehensive coverage on your auto policy. Typical amounts are $500 or $1,000. The amount is deducted from the value of the car, and then you receive payment from the insurance company for the remaining value of the vehicle. If someone else caused the accident, the at-fault driver is likely responsible for paying the deductible. 

A distraught person sits in front of a totaled car

How do I Calculate Total Loss Value?

First, you have to remember the total loss value is dependent on insurance coverage and liability. In the event the car accident was not your fault, the at-fault party’s insurance company is responsible for paying the current market value. However, the process can be delayed for different reasons. If there are delays, you can have your own automobile insurance company proceed with the total loss valuation. Your insurance may pay for the damage under the first-party coverage and pursue the at-fault driver’s insurance company for reimbursement. This is what is commonly referred to as subrogation.  

How Do I Increase the 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
The aftermath of a car t-boning another car

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.

A totaled car with its engine falling out

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. 

A pile of totaled cars at a junk yard

Do I Need an Attorney to Help with Property Damage? 

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.