Property Damage – What is a “total loss?”
In previous entries we discussed the different options that personal injury victims in Kentucky have when dealing with the property damage that was caused by the accident. Previous entries also discussed the advantages and disadvantages of using your own insurance company to get your car fixed vs. going through the other driver’s insurance company. This entry will focus on what it means when the damage is so bad that it is considered a “total loss.”
A “total loss” is when the cost to fix the property damage to your car is more than the car is actually worth. Typically this situation occurs when the damage to the car is very severe. However, it is possible that, because of the age or condition of the car the property value may be so low that even small or minor damage will cause the car to be a total loss.
Total losses can be handled through both your own insurance company (if you have this type of coverage on your policy) or through the other driver’s insurance company. The same advantages and disadvantages of going through your own company vs. going through the other driver’s (discussed in previous entries) apply to the total loss situation. This may include having to pay a deductible for going through your own company or the lengthy delays that many companies for the other driver may impose on paying for the damage.
One potential upside to a total loss situation is that the check for the damage (really the value of the car) is sent directly to you and not to a body or repair shop. There are downsides to a total loss as well. The most frequent is that you and the insurance company may not agree on the value of the car. A future entry will discuss how insurance company (both yours and the other driver’s) arrive at the amount that they think the totaled-out car is worth. Another downside is what is known as being “upside-down” on the value of the car. In other words, you may owe more on the car than it is worth. This topic will be discussed in more detail in a future entry.
For more information on your options regarding property damage, please contact the experienced attorneys at Bahe Cook Cantley & Jones PLC. While we do not typically handle these types of claims, we realize that this is part of the accident process and are happy to try and answer your questions.
