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Q

What percent of damage to an auto is required to total a car in the state of Colorado? If my car is worth $4,000 and is rear ended by another driver, how much damage would be required to total the car and much compensation would I receive?


A

Colorado laws don't require that a car have a certain threshold of damages done for the vehicle to be declared a total loss by a car insurance company.

Instead, the state has guidelines in place about what constitutes a salvage vehicle and total loss.

The Colorado Division of Insurance (DOI) and Department of Revenue (DOR) both note that under Colorado Revised Statute 42-6-102 a salvage vehicle is defined as a vehicle less than six years old that is damaged by collision, fire, flood, accident, trespass, or other occurrence, excluding hail damage, to the extent that the cost of repairing the vehicle to a roadworthy condition and for legal operation on the highways exceeds the vehicle’s retail fair market value immediately prior to such damage.

The DOR notes that it a vehicle can be determined as salvage by the person who owns the vehicle at the time of such occurrence or an insurance company.

The Division of Insurance states that under state insurance regulations, the total loss of a vehicle refers to condition of a motor vehicle when it is damaged or destroyed to such an extent that the insurer determines it cannot be rebuilt or repaired to its condition prior to the loss; or the cost of the loss (including, but not limited to, rental expenses, specialized labor and part availability) make the repairs of the vehicle uneconomical.

Without a specific threshold given in the law as a guideline, most insurance companies will determine a vehicle to be a total loss when costs of repairs are between 51 to 80 percent of a vehicle's actual cash value (ACV) -- or basically when the repairs costs are more than the value of the vehicle and other associated claim costs (rental car, storage fees, and so on).

So, if your car is worth $4,000 the insurance company can decide to total it out when the repair estimate comes to $4,000 or whenever their internal guidelines (which vary by insurer) say that it’s not economical to repair the car so it should be declared a total loss, which could be when costs reach 75 percent of the car’s value.

If your car is declared a total loss you would receive compensation based on what the insurance company determines the actual cash value of the car was before the accident. They calculate this number through various means - such as local sales of like vehicles, NADA and Kelley Blue Book, etc. Thus, if you know your car was worth $4,000 that should be what is paid out, minus your deductible if going through your own insurer for the claim.


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1 Responses to "What percent of damage to an auto is required to total a car in the state of Colorado? If my car is worth $4,000 and is rear ended by another driver, how much damage would be required to total the car and much compensation would I receive?"
  1. rob davis

    You didn't completely answer the question. If you ding a door and the total damage is one tenth of one percent of the car, but the cost to repair the door is excessive, the car is not totaled, it simply gives the insurance company a way of dumping your account and keeping years of payments. So how much damage is required in order to justify totaling a car?

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