Totaled Vehicle in a Colorado Car Accident

Dealing with a totaled vehicle after a car accident can be overwhelming. Insurance claims are complicated enough. This confusion can be compounded when you add in the efforts of determining the true value of your loss. Many drivers are left wondering what their options are, how much they will be compensated, and whether they are getting a fair property damage offer from the insurance company. The car accident lawyers at Bowman Law have extensive experience helping accident victims in Colorado understand their rights and maximize their recovery. This article breaks down everything you need to know about totaled vehicles in Colorado, from how insurance companies determine a total loss to steps you can take to ensure you receive fair compensation.

When is a Car Totaled?

A vehicle is considered totaled when the cost of repairs exceeds its actual market value. In other words, if fixing the car costs more than what the vehicle is worth, the insurance company will declare it totaled rather than paying for repairs. Once a vehicle is deemed a total loss, the owner does not have the option of repairing it through insurance. Instead, the vehicle owner will receive compensation based on the car’s current market value.

To illustrate, imagine you just purchased a brand-new car for $20,000.00 and are excited to take it for a drive. Unfortunately, while driving, another driver rear-ends you at a high speed, causing extensive damage. When you take the car to a repair shop, you learn repairs would cost $22,000.00, which is more than what you originally paid for it. In this situation, the insurance company will declare the vehicle a total loss because the repair costs exceed its worth, meaning you will receive a payout for the car’s market value rather than having it repaired.

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. It is not uncommon for insurance adjusters to consider the Kelley Blue Book value of your car for an idea of what the current market value. Importantly, current market value is not the same as sticker price. 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 you may be left with less than what 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 $500.00 or $1,000.00. The amount is deducted from the value of the car, and you will 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.

How do I calculate Total Loss Value?

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. Unfortunately, however, the process can be delayed. One example of a delay is when one insurance company continues to investigate liability. When there are delays, you can have your own 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, you do not have to accept the initial property damage offer. 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 compensation from your insurance company if fees are not included in the settlement.

Can I Keep a Totaled Vehicle?

You can 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.

Totaled vehicle cannot legally be driven. Accordingly, you will not likely be able to purchase insurance for it. Your vehicle would have to be 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 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.

Should I Speak with a Colorado Personal Injury Lawyer?

We cannot stress enough the importance of consulting with a personal injury lawyer following a car accident in Colorado. Most personal injury lawyers in Colorado will not assist you with property damage because they do not receive a fee. Bowman Law is different. Our Colorado personal injury lawyers understand the importance of assisting clients with all damage that result in a car accident. We are happy to help clients with property damage.

Our client-first approach ensures your needs are at the forefront of everything we do. We pride ourselves on transparency, integrity, and clear communication, guiding you through each step of the legal process. From initial consultation to the resolution of your case, we will guide you through the process. Bowman Law will alleviate the stress of legal proceedings so you can focus on your recovery. With a proven record of success, we are dedicated to securing the compensation you deserve.

If you or a loved one has been injured due to someone else’s negligence, do not face the challenges alone. Please send us a message or call us at 720-526-0298 to schedule a free case evaluation. Remember, you have one chance at attaining full and complete justice, and we are here to ensure you seize it. Let Colorado’s top-rated personal injury lawyers fight for your rights, protect your interests, and deliver the justice you deserve. We serve clients across Colorado’s Front Range and beyond, including Denver, Colorado Springs, Boulder, Fort Collins, Westminster, Lakewood, and Aurora. Call us now and take the first step toward reclaiming your life.