When a car is referred to as “totaled,” it means that the vehicle has been damaged to such an extent that the cost to repair it exceeds its market value. This assessment is typically made by insurance companies after an accident or incident. Here are some key points to understand about a totaled car:
Total Loss Definition: An insurance company determines a vehicle is a total loss when the repair costs, along with any additional fees (like towing and storage), surpass a certain percentage of the car’s actual cash value (ACV). This percentage can vary by state or insurance policy, but it often ranges from 70% to 80%.
Market Value: The ACV is the amount the car is worth before the accident, taking into account its age, make, model, mileage, and overall condition. If the cost to fix the car is higher than this value, it is considered totaled.
Insurance Payout: When a car is declared totaled, the insurance company usually pays the owner the ACV of the vehicle, minus any deductibles. This payout can help the owner purchase a replacement vehicle.
Salvage Title: If a car is totaled, it may receive a salvage title if it is eventually sold for parts or repaired and returned to the road. A salvage title indicates that the vehicle has been severely damaged and may have lower resale value.
Repair Possibility: In some cases, owners may choose to repair a totaled car if they believe they can do so at a cost lower than the insurance assessment. However, they may have to deal with a salvage title and potential issues with insurability or resale.
Emotional and Financial Impact: Being involved in an accident that totals a car can be distressing, not just because of the loss of the vehicle but also due to the financial implications, such as finding a new car and dealing with insurance claims.
In summary, a “totaled” car signifies that the vehicle is no longer economically viable to repair, leading to financial settlements and decisions about the car’s future.