* Insurance Declaration: When a vehicle is declared a total loss by an insurance company, it means the cost of repair exceeds the vehicle's actual cash value (ACV). This means the insurance company will pay you the ACV for the vehicle and take possession of it.
* Salvage Title: The insurance company will then sell the vehicle at auction with a salvage title. A salvage title indicates the vehicle has been declared a total loss and has significant damage. It's not roadworthy in its current condition.
* Repair Restrictions: Vehicles with salvage titles have restrictions in most states. They cannot be legally driven on public roads until they are inspected, repaired to meet safety standards, and issued a rebuilt title.
What Happens to a Total Loss Vehicle?
* Insurance Company Disposition: The insurance company typically has a few options:
* Auction: They sell the vehicle at auction to salvage yards or buyers who will repair it.
* Parts Retrieval: They may dismantle the vehicle to retrieve usable parts.
* Scrap: If the vehicle has no salvageable parts, it may be scrapped for its metal.
Note:
* In rare cases, an owner might choose to purchase their own totaled vehicle back from the insurance company.
* However, if you plan to repair a totaled vehicle, you should be aware of the following:
* Rebuilt Title: You'll need to get it inspected and repaired to meet safety standards before applying for a rebuilt title.
* Resale Value: Vehicles with rebuilt titles often have a lower resale value than those with clean titles.
It's always best to consult with your insurance company and your local DMV for specific regulations in your area.
