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Personal Injury

• Lightning Strikes Twice (download book)
• Website Resources for Injury Victims
• Police Report/ Accident Report Samples
• Auto Insurance Declaration Page
• Certificate of Employment

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What happens if the insurance company says my damaged car or truck is a "total loss?"

A: A vehicle that is considered a "total loss" has repair costs that are greater than the Fair Market Value (FMV) of the vehicle.  In other words, it will cost more to fix the vehicle than the vehicle is worth.  The insurance company will only pay you for whichever cost is less. For the state of North Carolina, a total loss is when the cost of repairs and damages equals or exceeds 75% of the pre-accident cash value or FMV.

Your policy will dictate the requirements for the insurance company.  Most policies DO NOT require the insurance company to provide you with a comparable replacement; just the value of your loss.  So, if you own an older model car with a low value, you will often be quite disappointed when you discover that your "total loss" means you get a small amount of cash that cannot be used to get you a vehicle like the one you lost.

You have choices with a total loss vehicle.  You can keep the car and find a way to make it run (perhaps cheaper than the adjuster quoted) or you could get it to where it works good enough for you (it could, for example, still have dents or not have air conditioning, but it would get you where you needed to be). 

If you keep it, though, you must pay back the insurance company for the residual or salvage value of the car.  The insurance company would not get the title of the car, so the salvage value would be deducted from the FMV settlement.  The insurance company adjuster would tell you what that amount would be. If your vehicle is determined to be a "total loss" but you decide to let the car go and take the FMV from the insurance company, giving them the car and title, then you will want to be sure to get many photographs of the damaged vehicle.  You might need them for later reference for your personal injury claim.