Confused why my car was totaled for $3,500 damage

Insurance Forum Auto Insurance
1

I hydroplaned my car two weeks ago, and the repair estimate was about $3,500. Despite this, my car was deemed a total loss, and my insurance is paying my lienholder almost $16,000. I don’t understand why they would total the car if the repair cost doesn’t even reach 75% of the car’s value. Can anyone explain why this happens?

2

There are several reasons this could happen:

  1. The $3,500 estimate may only cover visible damage. Once the car is torn down, additional hidden damage often comes to light, which increases repair costs.
  2. The salvage value of your car factors into the decision. If the insurance company can recoup a good amount from salvaging the vehicle, they may decide it’s cheaper to total it.
  3. The time and cost associated with repairs, including rental car expenses, can influence the decision. Longer repairs mean higher rental costs for the insurance company.

Insurance companies will choose the least expensive option based on these factors.

3

What’s the year, make, and model of your car? Sometimes older cars with high repair costs are totaled due to parts availability or other factors. For example, my 19-year-old truck had minor damage, but parts were expensive, and it was deemed a total loss even though it was mechanically sound. Insurance companies weigh a lot of factors, including market value.

4

Was there frame damage or airbags deployed? Those are often automatic total loss factors even if the repair costs seem low.

5

If your car was inspected at a repair shop or insurance inspection site, they may have found supplemental damage after the teardown. Hidden damage, like frame or suspension issues, often pushes the repair cost high enough to total the car. Sometimes vehicles are totaled because it’s more cost-effective for the insurance company to salvage and sell the vehicle.

6

@Foster
Insurance companies often have deals with salvage yards to sell desirable vehicles, making it more profitable to total a car than repair it. Everyone benefits except the original owner.

7

Phoenix said:
@Foster
Insurance companies often have deals with salvage yards to sell desirable vehicles, making it more profitable to total a car than repair it. Everyone benefits except the original owner.

I work in collision repair and see this all the time. Salvage yards strip cars of valuable parts, replace them with older or broken ones, and hope the vehicle totals. It’s shady, but it’s common practice.