If you’ve recently been in an accident in Florida and your vehicle has been declared a total loss, you may be wondering what comes next. In this blog, we’ll discuss the steps that you’ll need to take after your vehicle is determined to be a total loss in Florida.
Under Florida law, Florida Statutes 319.30(3), cars are deemed a total loss when the cost to repair them is 80 percent or more of their actual cash value (ACV). In such cases, the owner is entitled to the fair market value of the car.
First, you’ll need to contact your car insurance company or insurance agent to help you file a claim for the accident that resulted in damage to your vehicle. The insurance representative or your independent insurance agent will help you understand your policy coverage and what you’re entitled to receive. Depending on the coverage you have, you may be entitled to payment for your vehicle being deemed a total loss (minus a deductible). Those carrying the state-required minimum coverage may not be eligible, so it is important to discuss the specifics of your insurance claim with your agent.
The insurance company will assign an insurance adjuster to your claim, who will assess the repairs needed and calculate whether your vehicle is a total loss. Once your vehicle is determined a total loss, the insurance company will provide you with a settlement offer.
The settlement offer is calculated based on the age, mileage, condition of the car, and even the recommendations from Kelly Blue Book—minus your deductible, if it applies according to your policy. Essentially, they will offer what it would cost you to purchase the exact same vehicle or what you may get from a private sale. This amount is not the same as the trade-in value of your vehicle, as the dealership will often offer more for a vehicle to entice the owner to purchase a new vehicle.
When your car is declared a total loss, the ownership is transferred into the hands of your insurance company. Essentially, they are “buying” your damaged-beyond-repair vehicle for the fair market value of the car. From there, insurance companies will then transfer the title (or sell) the vehicle to a salvage company to recuperate some funds lost in your claim settlement.
If, for some reason, you would like to keep the damaged car and the insurance company allows you to do so, then they will deduct a portion of your settlement in the amount that they would have gotten from a salvage yard for it.
Vehicles that have been labeled as a total loss cannot be repaired and then sold. Titles are updated to reflect the damage incurred by that vehicle. These vehicles can, however, be stripped and sold for parts. For some people, this may allow them to recoup more money after their vehicle loss.
Once your total loss claim comes to a close and the deductible is paid (where necessary) and the vehicle title has been transferred, then you will be paid your settlement. The deductible or fees associated from your claim may be taken out of your settlement amount, so nothing has to be paid out of pocket on your end.
If you are still paying off your vehicle, then this settlement will go toward your loan. Any amount not paid off on the loan is still your responsibility—unless you have GAP coverage from your lender or insurance company; this insurance protects you from this financial responsibility and will pick up the difference. Any amount left over after the loan is paid is yours to keep and spend as you like. This isn’t common but can happen when select vehicles become popular and their fair market value has risen or when the used market is unusually high.
Contact us if you wish to review your policy and ensure you have the right coverages in place to optimize your situation in an accident where your vehicle is deemed a total loss.