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The Russell Agency, LLC Blog

All You Ever Wanted to Know About Insurance

My car is totaled—now what?

Your damaged car looks repairable, but instead, the insurance company has informed you that it will pay you the

value of the car before the accident and keep your car as salvage. Maybe that’s what you wanted, or maybe not. You

should know that the insurer is obligated to pay only the lesser of the actual cash value of the car or the amount

necessary to repair or replace it. If it costs more to repair your car than it is worth (which can easily occur with the

latest manufacturing technology), then you will be paid the actual cash value. That may sound simple enough, but in

practice, it can be more complex.

You and the insurer must agree on what the car was worth prior to the accident. Insurance regulations may

specify how the insurer is to determine the value with guidebooks or databases. Additionally, there is an appraisal

provision in the policy that provides the means to resolve a dispute with the insurer.

The insurer may decide that it is not feasible to repair a vehicle if the salvage value is high enough to offset the total

repair costs. In other words, if the insurer’s recovery from salvage can reduce the payment of actual cash value enough

to be less than the repair costs, then there is no incentive to repair the car. Also, state laws may require that newer vehicles

be branded as salvage if the repair costs exceed a percentage of the vehicle’s value.

However, in Connecticut, this occurs only when the insurance company declares the vehicle is a “total loss,” which

means the cost to repair the vehicle is higher than the vehicles fair market value. While you can get a “salvage”

title amended to a “rebuilt salvage” title after the Department of Motor Vehicles inspects the car and declares that repairs

are satisfactory, such title will likely adversely impact the future car’s value, despite its repair.

If you get into this discussion of total damage to your car after an accident, know that we offer our assistance in

helping to navigate through the claim adjustment. Call our office today to learn more about your car insurance coverage.