When is a Car Considered Totaled in NJ?

Being involved in a car accident is stressful enough without worrying about whether your vehicle is considered a total loss. If you’re dealing with property damage in New Jersey, it’s essential to understand the legal and practical definitions of a “totaled” car and how the process works in the state.

In this guide, we’ll break down everything you need to know about totaled cars in New Jersey, including what it means, the laws that apply, and the steps to take if your vehicle is declared a total loss.

What is a Totaled Car?

A car is considered “totaled” when the cost of repairing the damage exceeds its actual cash value (ACV). Insurance companies determine whether a car is a total loss by comparing repair costs to the car’s market value before the accident.

Key factors in determining whether a car is totaled include:

• The car’s pre-accident condition, mileage, and market value.
• Repair estimates provided by certified mechanics or appraisers
• Additional costs, such as towing and storage fees.

Insurance companies in New Jersey often use a Total Loss Formula (TLF), which considers repair costs and salvage value.

New Jersey Laws on Totaled Cars

The total loss threshold in New Jersey is 75% of the car’s ACV. This means if repair costs equal or exceed 75% of the vehicle’s market value, it is deemed a total loss.

For example:

• If your car’s ACV is $10,000 and the repair costs are $7,500 or more, the car would be declared totaled under New Jersey law.

Other relevant New Jersey regulations include:

• Salvage Title Requirements: Once a car is declared totaled, the vehicle’s title must be converted to a salvage title, per New Jersey Motor Vehicle Commission (MVC) regulations. This title indicates the car is not roadworthy until repaired and inspected.
  
• State Insurance Laws: New Jersey follows a no-fault insurance system, meaning your insurance policy will generally cover damages regardless of who caused the accident. However, if your damages exceed your policy limits, you may pursue a claim against the at-fault driver.

When is a Car Considered Totaled in New Jersey?

Your car may be considered totaled under the following circumstances:

1. Severe Structural Damage: Damage to the frame or other critical components that compromises safety or is cost-prohibitive to repair.
   
2. Excessive Repair Costs: When repair costs exceed the 75% threshold of the car’s ACV.
   
3. Flood Damage: Vehicles severely damaged by flooding are often declared total losses due to electrical and mechanical failures.

💡 Important Note: Insurance companies may vary in their interpretation of total loss thresholds, so carefully reviewing your policy terms is vital.

What Happens After a Car Is Declared Totaled?

If your car is declared totaled, the following steps typically occur:

1. Insurance Payout:
   • The insurance company will offer a settlement based on your car’s ACV.
   • If you owe money on a car loan, the payout will go to the lender first, with any remaining balance issued to you.
     
2. Salvage Title Issuance:
   • You’ll receive a salvage title if you wish to keep the car.
   • You must repair the car and pass a state inspection to receive a rebuilt title, allowing it to be legally driven.
     
3. Replacement Options:
   • Use the insurance payout to purchase a replacement vehicle.
   • Some policies include gap insurance, which covers the difference if your car’s ACV is less than the amount owed on your loan.
     
4. Dispute the Valuation:
   
   • If you disagree with the insurance company’s ACV assessment, you can negotiate or provide additional evidence, such as repair estimates or comparable car listings.

Disputing a Total Loss Claim

Sometimes, you may feel that your car’s value or the insurance company’s decision doesn’t accurately reflect the situation. If you believe your vehicle was undervalued or improperly declared totaled, there are steps you can take to dispute the claim.

1. Review the Insurance Settlement Offer

Carefully examine the settlement offer, which includes the ACV of your car and how it was calculated. Look for discrepancies, such as:

• Outdated or incorrect information about the car’s mileage or condition.
• Comparisons to vehicles of different models or years.
• Omission of recent upgrades or repairs you made before the accident.

2. Gather Evidence

To dispute a valuation, you need evidence to support your claim. Collect:

• Repair Estimates: Get a second opinion from a trusted mechanic or body shop.
• Comparable Sales Listings: Find cars with similar make, model, mileage, and condition to your own vehicle to demonstrate its market value.
• Maintenance Records: Show that the car was in good condition before the accident.

3. Submit Your Dispute

Once you have gathered sufficient evidence, submit a formal dispute to your insurance company. This may involve:

• Write a letter explaining why you believe the valuation is incorrect.
• Attaching supporting documentation, such as repair estimates and comparable listings.

4. Consider an Independent Appraisal

If the dispute cannot be resolved through negotiation, you may request an independent appraisal. This process involves hiring a third-party appraiser to assess the vehicle’s value. The appraiser’s findings can be used to negotiate a higher settlement.

5. Seek Legal Assistance

If you continue to face challenges, consult an experienced attorney specializing in insurance disputes. They can help you navigate the process, advocate for a fair resolution, and protect your rights.

Practical Tips for Handling a Total Loss

• Document Everything: Take photos of the damage and gather repair estimates.
• Understand Your Policy: Review coverage details, including deductibles and gap insurance.
• Negotiate Fairly: Don’t accept the first settlement offer if you feel it’s too low—most insurance companies are open to negotiation.
• Consult an Attorney: If you face challenges with the insurance company or need to recover damages beyond your policy limits, an experienced attorney can help.

How Rosengard Law Group Can Help

At Rosengard Law Group, we understand the devastating impact a roadside accident can have on victims and their families. If you or a loved one has been harmed in an accident, our experienced attorneys can help you seek justice and compensation for your injuries.

We’ve successfully represented clients in cases involving:

• Vehicle collisions and total loss disputes.
• Negligence claims against at-fault parties.
• Compensation for medical bills, lost wages, pain, and suffering.

To schedule a free consultation, contact us at Rosengard Law Group or call (856) 284-6446 today.