When your vehicle is severely damaged in a car accident, we understand that the insurance process can be overwhelming. You may be wondering, “Is my car a total loss?” The Sevierville car accident lawyers at Delius & McKenzie, PLLC, are here to help you understand Tennessee’s total loss threshold, which can help you work through the insurance process more effectively.

What is a total loss?

According to Bank Rate, a total loss means the following:

Total loss car insurance provides coverage for when a vehicle is damaged beyond reasonable repair in a covered claim. To determine whether your vehicle is damaged beyond reasonable repair, your auto insurer will assign a claims adjuster to assess your vehicle’s value by checking for damages and considering other variables that depreciate value. The company then uses this information in conjunction with market value data to determine how much your car is worth. The number they arrive at is called the actual cash value (ACV). If the car is worth less than repairs would cost and has total loss coverage, the insurance will make a payout for the totaled vehicle.

In simpler terms, a vehicle is considered a total loss when the cost to repair it exceeds its actual value. Instead of paying for repairs, insurance companies may opt to declare the car totaled and compensate you based on its pre-accident value. But how do they determine this in Tennessee?

What is Tennessee’s total loss threshold?

If the cost of repairs equals or exceeds 75% of a car’s retail value, the vehicle is declared a “salvage vehicle.” In other words, if fixing your car will cost you 75% or more of what the car is worth, it’s considered to be a total loss.

• First, the insurance company determines the vehicle’s actual cash value (ACV), which is the market value of your car before the accident.
• Next, they estimate repair costs, which are the total costs necessary to restore the vehicle to its pre-accident condition.
• Finally, they apply the 75% rule – if the repair costs are 75% or more of the ACV, the car is considered a total loss.

Here’s an example. Let’s say the ACV of your vehicle was $12,000, and the estimated repair costs are $9,000. ($9,000 / $12,000) x 100 = 75%. Since the repair costs are 75% of the vehicle’s value, it would be classified as a total loss.

What happens after your car is declared a total loss?

When your vehicle is declared a total loss here in Tennessee, the process usually goes like this:

• Your insurer offers a settlement based on the car’s ACV, minus your deductible. This should reflect the fair market value of your vehicle before the accident.
• For vehicles less than 10 years old, a salvage certificate or non-repairable certificate must be obtained. This involves completing an application with the Tennessee Department of Revenue.
• If you choose to keep your totaled vehicle, your insurance payout may be reduced by the car’s salvage value.

Salvage and rebuilt titles in Tennessee

When a car is declared a total loss, it typically gets a salvage title, indicating that it’s not roadworthy in its current condition. If you decide to repair the vehicle, you can apply for a rebuilt title after completing the necessary repairs and passing the state inspection.

Remember, a salvage title is issued for vehicles deemed a total loss. The car cannot be legally driven until it’s repaired and registered. After repairing a salvage vehicle, you can apply for a rebuilt title, allowing the car to be legally driven again.

What factors influence the total loss decision?

A variety of factors can affect whether your car is deemed a total loss, including:

• The better the condition of your vehicle before the accident, the higher its ACV, which can influence the total loss determination.
• Severe structural damage or safety concerns can lead to a total loss declaration, even if repair costs are below the 75% threshold.
• Older vehicles with higher mileage typically have a lower ACV, which makes them more susceptible to being totaled after a car accident.
• Fluctuations in the used car market can affect your vehicle’s ACV, which can affect the total loss assessment.

How can your Sevierville car accident lawyers help with my case?

Dealing with the aftermath of a car accident and total loss claims can be complex. At Delius & McKenzie, PLLC, we’re here to help:

• We can assess the insurance company’s offer to ensure it reflects your vehicle’s true value.
• Our team will handle communications with the insurance company to advocate for a fair settlement on your behalf.
• From understanding salvage titles to exploring your legal options, we can provide the support and information you need to keep moving forward.

What are my rights and options?

As a policyholder in Tennessee, you should understand your rights:

• Make sure the insurance company’s total loss settlement includes all applicable taxes, license fees, and other costs associated with transferring ownership.
• If you disagree with the insurer’s valuation, you can negotiate or seek an independent appraisal to challenge the settlement offer. Our Sevierville car accident attorneys can tell you about this process in more detail.

Understanding Tennessee’s total loss threshold is essential when dealing with significant vehicle damage after an accident. If you’re facing a total loss situation, knowing your rights and the steps involved can make the process feel less daunting. At Delius & McKenzie, PLLC, we’re committed to guiding you through every step, ensuring you receive the fair compensation you deserve. If you have questions about total loss claims or need assistance with your case, don’t hesitate to reach out to us. We’re here to help you navigate this challenging time with confidence and clarity. Call our offices or fill out our contact form to schedule your consultation.