I frequently receive calls from the owners of damaged cars or trucks who ask when must a vehicle be considered a total loss? In an effort to pay less on the claim, unfortunately some auto insurers will attempt to have extensive damage repaired instead of having the car totaled. These owners are concerned that even with competent repairs, their vehicle will never be as it was before and that the resale value of their vehicle will also be adversely affected.
Under Indiana law, specifically Indiana Code 9-22-3-3, if the cost of repairs to a vehicle is more than 70% of its fair market retail value before it was damaged, then the vehicle must be declared a total loss. If the vehicle is a total loss, then the owner is entitled to receive the retail value of their vehicle before it was damaged, plus state sales tax.
As a practical matter, if the repair estimate is close to but slightly less than 70% of the vehicle’s retail value, the owner can often convince the insurer to still total the vehicle by pointing out that the insurer also owes compensation for the diminished value of their vehicle because of collision damage. When a vehicle has significant property damage, the diminished value of the vehicle can be substantial. I have written a blog article previously regarding diminished value claims that you can read for more information.
If you have a significant property damage or personal injury claim, call the office of James F. Ludlow, Attorney at Law, P.C. to discuss your legal rights. My firm can be reached toll-free at (877) 897-9466 or by filling out the simple form on the Contact Us page.