My car, motorcycle or bike was destroyed (or “totaled”) in an accident. How do I get paid for that?

The difference between a damaged vehicle and a “totaled” vehicle:

First, you (or the insurance carrier does) need to determine whether your vehicle was merely damaged or was totally destroyed in the accident. When a client is in a bad car, motorcycle or bicycle accident, their vehicle is usually either badly damaged or completely totaled. When a vehicle is “totaled,” it means that it has sustained such serious damage that it is would cost more to repair it than the vehicle is even worth. If a vehicle is damaged but can be repaired for less than the vehicle is worth, the insurance company will either pay the repair shop directly to do the repairs, or they will write the client a check for the estimated cost of repairs. This post focuses on a totaled vehicle, and how to collect a settlement on that property damage.

Cash property damage settlements:

When your vehicle is totaled in a personal injury accident, the insurance carrier will provide you with a cash settlement. This means they will write you a check for the value of the vehicle. See more below on what to do if you still owe money on the vehicle.

How value is determined:

Insurance companies determine market value by looking at comps or “comparable vehicles”. A comparable vehicle is one of like kind and quality, made by the same manufacture and the same or newer model year, of similar body type, with options and mileage similar to the insured vehicle. Also, geographic area is a factor. So, if you bought the car in Alabama, but now live in California, you might get better value, but the opposite is also true. Essentially, you will receive the value of an almost identical vehicle for sale in your geographic area. The value of the vehicle is also calculated at the moment before it was totaled (versus value when you bought it). So, even though you may have paid a pretty penny for it, we all know that cars lose value the moment you drive them off the lot.

What if you still owe money on the vehicle?

The other issue is if you don’t own the car or motorcycle but are still making payments on it. If you are still making payments and the vehicle is totaled, you will still be responsible for continuing the payments even though the vehicle is not usable anymore. The best course of action is to simply pay off the old loan with a portion of the money you received in your property damage settlement and then use the rest to purchase a used vehicle or make a down payment on a new car or motorcycle.

Tips on negotiating the best property damage settlement:

Of course as always, insurance companies will try to give you as little as possible for your property damage settlement and hope you forget the little things. However, there are a few things you can tell the insurance company (if they apply to you) to be sure that you are getting fair cash settlement for your vehicle. Things like new tires, new parts, and even recent repairs, upgrades or customizations that may have increased the value or life of your car, bike or motorcycle. Additionally, don’t forget to tell them about any upgraded options you had on your vehicle (like GPS, stereo, leather, aluminum wheels, etc.) because you paid for those options and you are entitled to compensation for those.

Have a personal injury lawyer help with your property damage settlement:

If you were seriously injured in the accident, you should get a free online case evaluation from an experienced personal injury attorney. Having an injury lawyer really helps alleviate the stress of an accident and takes the headache of phone calls and paperwork off your list of a million things to do. This will allow you to handle the property damage portion of your claim quickly and easily without the distraction of the more complicated bodily injury claim. 

If you have not sustained any serious personal injuries in your car, bicycle or motorcycle accident, there are services that will help you negotiate for the best property damage settlement possible (Google for these companies), but they will likely charge a fee.

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