Why Won’t The Insurance Company Total My Car?

What Is a Totaled Car?

Laws on this issue can vary from state to state. Therefore, you should always consult directly with an attorney to determine the law that applies to your specific situation. Generally, however, the term, “total loss” refers to the value of a vehicle being completely diminished due to an accident.

Specifically, the term means that according to an insurance company’s estimate, it will cost them more to repair the vehicle than it will to pay you for the fair market value of the vehicle at the time of the loss. Total losses usually occur when the damage to the vehicle exceeds 75% of the car’s fair market value. Both Maryland and Virginia laws use a 75% threshold to determine total loss and the statutes are cited below.

Different insurance companies will use different percentages in determining whether a vehicle would be considered repairable. The ratio of damage to the vehicle to the fair market value must usually exceed 70% to 85% of the fair market value for the insurance carrier to deem it a “total loss.”

The insurance companies are only required to give you money for the repair costs or the market value of the car, whichever is less. Maryland defines a salvage vehicle as one whose repair cost exceeds 75% of the fair market value of the vehicle prior to sustaining the damage.

When Is a Car Considered Totaled?

A car is considered totaled when the cost of repairs exceeds a certain percentage of its fair market value (actual cash value, or ACV). This threshold is 75% in Maryland, as mandated by state law. This means that if the cost to repair your car is greater than 75% of its ACV, the insurance company will likely declare the vehicle a total loss.

For example, if your car’s ACV is $15,000 and the estimated cost to repair the damage is $12,000, the repair costs exceed the 75% threshold, and the vehicle will be classified as totaled. On the other hand, if repair costs come out to $10,000, the insurance company may decide to repair the car instead.

This decision is frequently frustrating for car owners because it’s based on financial calculations—not on how much you value your car personally. Insurers rely on third-party tools and databases to calculate your car’s ACV by considering factors such as its age, make, model, mileage, and pre-accident condition. Additionally, they calculate salvage value, or the amount they can recover by selling the damaged car for parts, as part of this process. 

Factors That May Impact Fair Market Value

The fair market value of your car (or its ACV) is influenced by various factors, including its condition, market trends, and even the region where you live. This number is a crucial determinant in whether the insurance will total the car after an accident.

Here are the primary factors that affect the fair market value of a vehicle:

• Age and Mileage: Older vehicles and those with higher mileage depreciate faster, leading to a lower ACV. A car that has been driven extensively will likely be worth less than a similar model with low mileage.
• Make and Model: Some vehicles retain their value better than others due to brand reputation and demand. For instance, a high-end luxury sedan or a popular SUV may have a higher ACV compared to an economy car of the same age.
• Condition: Your car’s pre-incident condition is a vital factor. Any pre-existing mechanical issues, scratches, dents, or other cosmetic damage can significantly reduce its value.
• Market Demand in Baltimore: The local market also plays a role. For example, vehicles with features desirable for Maryland’s climate—such as four-wheel drive or SUVs—may have a slightly higher fair market value in Baltimore compared to other regions.
• Upgrades or Modifications: If you’ve made upgrades to your vehicle, such as installing a new stereo system or adding custom wheels, these could increase its ACV. However, you must provide documentation to prove these additions.

Another important consideration is the salvage value, which is the amount an insurance company can recover by selling your totaled car for parts. If your car’s salvage value is high, it might influence the insurer’s decision to repair rather than total the car. This nuanced calculation generally leaves drivers feeling as though their car was undervalued.

Does the Type of the Accident Matter?

Yes, the type and severity of the accident can heavily influence whether a car is declared totaled, as different types of damage come with varying repair costs. Certain types of damage are much more expensive to repair, and insurance providers take this into account when making their decisions.

Here’s how different types of accidents can affect whether your car is totaled:

• Front-End Collisions: Damage to fundamental components such as the engine, radiator, transmission, and suspension can result in high repair costs. Because these parts are typically expensive to replace, front-end collisions are more likely to result in a total loss.
• Rear-End Collisions: While rear-end collisions may seem less serious, they can cause significant damage to the vehicle’s structure, trunk, and rear suspension. Repairs can become prohibitively expensive if the frame or rear axles are compromised.
• Side-Impact Collisions (T-Bones): These incidents frequently cause structural damage to the car’s frame, doors, and safety systems, such as airbags. Frame damage, in particular, can be very costly to repair, increasing the likelihood of a total loss designation.
• Flood Damage: Vehicles exposed to water damage often suffer from long-term electrical and mechanical issues. Repairing flooded vehicles is expensive, especially when replacing damaged wiring, engines, or computer systems.
• Fire Damage: Fire-related damage usually requires replacing major systems like engines or interiors, making the car more likely to be declared a total loss.

Insurance companies evaluate the extent of the damage as well as the cost of replacing damaged components versus repairing them. For example, repairing a minor dent or scratch is far less expensive than replacing entire panels, engines, or safety features like airbags.

MARYLAND TOTAL LOSS THRESHOLD STATUTE

Universal Citation: MD Transp Code § 11-152 (2013)

§11-152.

(a) “Salvage” means any vehicle that:

(1) Has been damaged by collision, fire, flood, accident, trespass, or other occurrence to the extent that the cost to repair the vehicle for legal operation on a highway exceeds 75% of the fair market value of the vehicle prior to sustaining the damage, as determined under §

Universal Citation: MD Transp Code § 11-152 (2013)

§11-152.

(a) “Salvage” means any vehicle that:

(1) Has been damaged by collision, fire, flood, accident, trespass, or other occurrence to the extent that the cost to repair the vehicle for legal operation on a highway exceeds 75% of the fair market value of the vehicle prior to sustaining the damage, as determined under § 13-506(c)(4) of this article;

(2) Has been acquired by an insurance company as a result of a claim settlement; or

(3) Has been acquired by an automotive dismantler and recycler:

(i) As an abandoned vehicle, as defined under § 25-201 of this article; or

(ii) For rebuilding or for use as parts only.

(b) For purposes of this section, a vehicle has not been acquired by an insurance company if an owner retains possession of the vehicle upon settlement of a claim concerning the vehicle by the insurance company.

VIRGINIA TOTAL LOSS THRESHOLD STATUTE

The chapters of the acts of assembly referenced in the historical citation at the end of this section may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.

How Can an Attorney at Bob Katz Law Help Me?

An attorney at Bob Katz Law can guide you through disputes with your insurance company and guarantee you receive the compensation you’re entitled to. The aftermath of an accident is stressful, especially if the insurer undervalues your car or denies it’s a total loss when it clearly should be. Here’s how our experienced car accident lawyers can assist you:

• Review Your Policy: We’ll carefully analyze your insurance policy to ensure the company is adhering to its terms and obligations.
• Challenge Low ACV Offers: If the insurer undervalues your car’s ACV, we’ll gather evidence such as repair estimates, recent upgrades, or comparable vehicle listings in Baltimore to prove your car’s worth.
• Negotiate on Your Behalf: Our attorneys will handle all communications with the insurer, using Maryland laws and regulations to support your claim.
• Facilitate Independent Appraisals: If necessary, we’ll connect you with reputable appraisers who can provide an unbiased car valuation.
• Litigation Support: If negotiations fail, we’re prepared to represent you in court to uphold your rights.

When dealing with a totaled car, you don’t have to face the insurance company alone. At Bob Katz Law, we understand the unique challenges drivers in Baltimore, MD, face after an incident. Our team is committed to protecting your interests and verifying you receive the compensation you’re entitled to under Maryland law.

Whether you need help disputing a low ACV, understanding your insurance policy, or pursuing legal action, we’re here to guide you every step of the way. Contact us today to learn more about how we can help you.

Related article: What Should I do About my Car Payments and Insurance after my Car is Declared a Total Loss?

Timothy J. Capurso

Timothy J. Capurso is chair of the firm’s Personal Injury Practice Group. He concentrates his practice on personal injury cases of all types, focusing on automobile accidents. His background includes litigating personal injury cases from inception through trial and settlement negotiations. 25+ years of experience.

Contact Timothy J. Capruso