A vehicle is considered a total loss when it would cost more to repair it than replace it. On average, approximately 20 percent of all Esurance claims result in a total loss, although this number will increase after an event like Hurricane Sandy.
But what happens to all these cars after they’re totaled? Are they put out to pasture, demolished, salvaged, rebuilt? Well, yes. The process for dealing with a total loss vehicle is complicated and varied, so we talked with Esurance claims manager, Jason Giles, to get some solid answers.
How is a “total loss” determined?
After you’ve been in an accident, an expert — known as an appraiser — will perform a complete inspection of your vehicle to determine how much it will cost to repair. If the repairs would cost more than the cost to replace your vehicle, they will deem it a “total loss.”
What happens to totaled cars?
Once your vehicle’s determined to be a total loss, your insurance company will settle with you, meaning they will pay you the fair market value of your vehicle. The vehicle will then be taken to a salvage yard and the title will be processed based on that state’s regulations.
It’s important that the title is processed according to state-specific regulations. Doing so will ensure the car doesn’t return to the market with a title that (conveniently) fails to mention previous damages. Esurance partners with Copart, a trusted salvage vendor that works with local DMVs to make sure totaled vehicles are only sold on salvage titles.
How is a salvage title “washed”?
Despite our best efforts to keep totaled vehicles off the market, there are times when unscrupulous people try to make a quick buck by “washing” the title. This is done by moving the salvaged vehicle to a different state and applying for a new title in that state. Because regulations vary, it’s possible to get a title that’s different from the one in the old state. Hence, a “salvage” title becomes a “clean” title.
How can I avoid buying a totaled car?
The good news is that even if the title’s been washed, you can still research a car’s history through its Vehicle Identification Number (VIN). Because Esurance reports each claim through ISO (Insurance Services Office), it becomes permanently associated with the VIN. By running the VIN through a company like CARFAX, you can feel confident that all claims associated with the vehicle will appear.
That’s why it’s essential to always check the VIN before buying a used vehicle, regardless of what the title says.
Cars totaled by Hurricane Sandy
Due to the high volume of flood-damaged cars after Superstorm Sandy, the number of totaled vehicles has increased substantially this year. According to the Huffington Post, nearly 250,000 vehicles were destroyed in the storm. And while it may be months before all these cars are processed, some could find their way back onto the market … and, in some very rare cases, may even claim to have “clean” titles.
If you’ll be shopping for a used car, be extra careful to do your due diligence and check the VIN. It could save you a world of trouble and expense!