What is considered a “total loss”?
A car is deemed a “total loss” in Kentucky if it will cost more than 75% of the actual cash value of the car to repair it. In simple terms, if the car is worth $10,000, and the repair estimate comes in at $7,501, the car is a total loss, and the insurance company does not have to pay for repairs, even if you want it repaired. In that case, they will have to pay the actual cash value of the car–which is determined objectively through sales comparisons, market research, etc.
Why Can a Total Loss be Problematic?
Total losses can be problematic for several reasons. Sometimes you may owe more than the car is worth. In that situation, the insurance company does not have pay off your loan, and instead they will just pay the lien holder the actual cash value of the car, which can leave you with debt and no car. You should check for “gap” coverage with your loan company if that happens. In other circumstances, the person who is at fault may not have enough insurance to cover your loss. Kentucky minimum coverage laws require a person to carry $10,000 in coverage. If your car is worth more than that, or if several cars are damaged by the at fault car, there may not be enough coverage to go around.
Using your own insurance can be a solution to some total loss problems, but that only works if you have the coverage for your vehicle, and if you are willing to be patient about your deductible. Coverage for a loss to your vehicle caused by another driver is not part of minimum legal coverage in Kentucky, so you may not have that coverage. And if you do have the optional coverage, most vehicle damage coverage in Kentucky will pay you actual cash value, less your deductible, which is often $500 or $1000. That means if your car is a total loss, worth $12,000, your insurance would pay you $12,000 minus your deductible of $1000, leaving you with $11,000. If the at fault driver only has $10,000 in coverage, you are better off taking that $11,000 from your insurance company, of course, and then pursuing the other driver for the deductible.
Contact Us Today
If you have been involved in a car wreck in Kentucky, you do not have to go through this process alone. The experienced car accident attorneys at Kevin Crooks, PLLC are here to guide you through this difficult and confusing time. Contact the Lawville team today to set up your consultation.