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What Do Insurance Companies Do With the Cars that Have Been Totaled?
Dec 26, 2019
There are few interesting options for totaled cars
Once totaled, an insurance company has the option to:
- “Sell” the car back to the insured. In this situation, the total loss settlement is reduced by the car’s remaining salvage value.
- Sell the car to an auto salvage vendor.
A popular (inter)national car auction chain such as Copart ( www.CoPart.com
) may then put the car up for sale.
It’s important to know that each state has its own statutory requirements for what amount of damage requires a vehicle to be totaled - and - what types of damage require a branded salvage title.
By way of example, New York state’s requirements are listed below:
What Is a Salvaged Car?
New York's definition of a salvaged car is very specific.Your car is considered salvaged in the state if it was:
- Model year 1973 or newer and transferred to an insurance company with a Salvage Certificate, due to significant damage from: Collision, Water, Theft, Vandalism.
- Declared a “wreck" at the time of sale or transfer by the owner listed on the back of its title.
- Brought to New York after being issued a salvage title in another state.
Branded Salvage Title
The state's Department of Motor Vehicles (DMV) requires a “branded" salvage title on any vehicle that is:
- Up to 8 model years old. AND
- Received damage worth at least 75% of its retail value OR was destroyed.
The website DMV.ORG
, provides links to each state’s requirements for salvage vehicles are shown on this page. Some state’s percentage of value are lower than that shown for New York state.
Depending on the specific type of damage and age of the car, the vehicle may be repaired and put back into service. In other instances the car is disassembled, and individual parts are sold as used. After being “parted out” and in some severe situations, a vehicle may be sold for its value in scrap.
Would you like to discuss your car insurance in greater detail? We’re here for you. Give us a call at 607-324-7500, or request a quote online: https://www.ryanagency.com/request-a-quote
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