Following a serious car accident, an insurance company will consider a car to be damaged beyond repair, or totaled, if the cost to repair the car exceeds a certain percentage of the car’s actual cash value immediately before the accident. This may sound like an objective and unbiased definition, but insurers might manipulate these values to suit their bottom line to the detriment of the car’s owner.
The New York car accident attorneys at Douglas & London represent individuals that have suffered property losses and injuries in car accidents. Our years of experience in automobile accident cases has created a base of knowledge that we rely on to recover damages that compensate our clients for the maximum value of their totaled cars.
Whether a car is totaled varies from state to state
States, which regulate car insurance companies, have adopted different rules that those insurers are required to follow to determine if a damaged car is a total loss. Twenty-one states use a total loss formula, or “TLV”, under which an insurer adds the cost of repairing a damaged car to its scrap value, and compares that sum to the car’s pre-accident actual cash value. Other states allow insurers to declare that a car is totaled if the cost to repair damages exceeds a certain percentage of its value that varies from state to state between 50% and 100%.
How New York State insurers determine if a car is totaled
In New York, an insurer can declare a car to be totaled if the cost to repair it exceeds 75% of its pre-accident cash value. Assume, for example, that your car’s cash value is $20,000, and that an accident leaves the car with $16,000 in repairs. Because those repairs are 80% of the car’s value, an insurer in New York can declare the car to be totaled. In the alternative, if the repairs cost only $14,000, or 70% of the value, that same insurer can conclude that the car should be repaired.
Accounting for accident-related depreciation
An insurance company that does not declare a damaged car to be a total loss will reimburse the car’s owner for repairs. Regardless of the value of post-accident repairs and of how well those repairs might have been performed, a repaired car will have a lower post-repair cash value than an identical car that has never been in an accident. An owner’s car insurance generally does not reimburse the owner for that lost value, which then becomes an issue if the car is in another accident or its owner elects to sell it or to trade it in for another vehicle.
Recovering a car’s lost value when it is not totaled
A person who suffers property losses and injuries in a car accident has a right to recover damages equal to the value of those losses and injuries from the negligent party that caused the accident. The negligent party and his or her insurers will not automatically reimburse the complete amount of those damages. In these situations, a knowledgeable and experienced car accident attorney will always be an accident victim’s best advocate to recover the full value of those losses and injuries, including any accident-related depreciation that diminishes a car’s value.
Calculating lost value damages
Accident-related depreciation is determined either by calculating the car’s actual diminished value or by applying what insurers refer to as the “17c Rule”. That rule starts with a car’s sales value and assumes that 10% of this value is the car’s base lost value. The rule then applies a fractional multiplier to that lost value based on the extent of the car’s structural damage and deducts another amount to factor in the car’s mileage. In practice, a car’s actual diminished value and its reduced value based on the 17c rule might be very different. A skillful car accident lawyer will know how to utilize either or both rules to recover the largest compensation for an accident victim whose car has been damaged in an accident.
Call the Car Accident Lawyers at Douglas & London
Car insurance companies rarely offer car accident victims compensation for the full amount of their property losses and injuries unless those victims retain an experienced lawyer to fight for their damages. A New York car accident attorney at Douglas & London will fight to recover the car’s depreciated post-accident value and all other damages that may be available to reimburse an accident victim for his or her losses and injuries.
Please call our NYC offices today for a free case review!