If you’ve been in a car accident, the first thing to do after assessing your health and safety is to file an insurance claim on your damaged vehicle. From there, insurance will either reject or approve your claim for repairs, or they may tell you that the car is totaled and not worth the cost of being fixed. 

Your car is considered totaled when the cost to repair it exceeds its market value. This is tricky in the supercar community, where car values and repair costs are usually much higher than they are for conventional vehicles. 

It begs the question, then: can an insurance company force you to total your car? And equally important: what are your options if you disagree? 

Can Insurance Force You to Total Your Car?

No, an insurance company cannot legally force you to total your car. 

Insurance companies use sophisticated computer programs to calculate damages and determine if repairs exceed a certain threshold. If they do, your vehicle is declared a total loss, and insurance will offer you a settlement based on its pre-accident actual cash value (ACV) instead of paying for repairs. 

It’s up to you, the car’s owner, what happens next. You may decide to accept the total loss settlement offer, in which case you will get a lump cash sum and your car will likely be sold at a salvage auction. Or you can reject the claim and either dispute it, negotiate it, or, in some cases, cover the cost of repairs yourself. 

How Insurance Companies Calculate Total Loss

The formula for total loss is repair costs + salvage value ≥ actual cash value (ACV).

Let’s say the estimated repair cost for your supercar is $80,000, and your insurance company estimates it can get $10,000 if they salvage the car at auction. They would add those two numbers to get $90,000, and if that’s more than your car’s ACV, they’ll declare it totaled.

Many states have total loss thresholds, which are laws that state a vehicle must be declared totaled if repair costs exceed a certain percentage of its value. In Florida, for example, your car is automatically a total loss if repairs equal 80% or more of its ACV. 

Three Options If You Disagree with Insurance

In the rare, luxury, and exotic care markets, where even routine maintenance can cost thousands of dollars, it’s not all that difficult to meet your insurance company’s or state’s total loss threshold. But that doesn’t mean you have to send your vehicle to a salvage auction with no questions asked. 

If you disagree with your insurance provider’s assessment, you can:

  • Dispute the Decision: Have an independent appraiser evaluate your vehicle and provide their own expert opinion on repair and salvage costs vs. ACV. Then, if relevant, dispute insurance’s total loss claim denial or negotiate the settlement offer based on the new findings. 
  • Buy at Salvage: Some insurance companies allow you to buy back your car as a salvage vehicle, which may make sense if your car is still operational despite costly repair needs. Just note that you must have the repairs completed, and you legally cannot drive your vehicle until they’re done.
  • Seek Legal Advice: If you believe insurance has undervalued your car and/or they are refusing to negotiate, contact a lawyer with experience in diminished value and loss of use claims who can fight to get you the outcome you deserve. 

Can You Keep a Totaled Car?

In some cases yes, and you may not need to buy it from salvage in order to do so.  

Whether or not you can hold on to a totaled car depends on where you live and the current condition of the vehicle. This can be done through salvage, or, in some cases, insurance will simply deduct the salvage value from your total loss settlement offer.

In either case, you won’t be able to drive the car again until it’s completely fixed. Further, you’ll need to get a new title, called a rebuilt title, before you can get back on the road. Keep in mind that a rebuilt title is more costly to insure and will likely decrease your car’s value further. 

Talk to a Lawyer About Your Total Loss Claim

It’s important to know your rights when dealing with auto insurance companies. When it comes to totaling your car, that means understanding what options are available to you and when it’s worth fighting back on a total loss decision. 

Our team helps car owners fight unfair total loss decisions, with a specialty in luxury and exotic vehicles. Contact us today to learn more about options for keeping your car in your possession and out of the salvage yard.