In Arizona, if your car is totaled, who keeps it? This is a common question among drivers who find themselves dealing with the aftermath of a car accident. Understanding the process and your options is essential. This article provides a detailed explanation of what happens when your car is declared a total loss in Arizona.
What Does It Mean When a Car Is Totaled?
A car is considered totaled when the cost of repairing it exceeds its market value. Insurance companies use a formula to determine this. In Arizona, the threshold is generally 70% of the car’s actual cash value (ACV). For example, if your car’s ACV is $10,000 and the repair costs are $7,000 or more, it is likely to be declared a total loss.
When your car is totaled, your insurance company will typically compensate you for its market value, minus any deductibles. However, this doesn’t necessarily mean you lose ownership of the car. Let’s look at what happens next.
Who Decides What Happens to the Car?
In Arizona, the decision of who keeps the car after it is totaled depends on you and your insurance company. Once your car is declared a total loss, the insurance company takes over the process. They assess the value of the car and offer you a settlement.
If you agree to the settlement, the insurance company becomes the legal owner of the car. They usually sell it to a salvage yard or auction it off. However, if you want to keep the car, you can negotiate with the insurance company. This is known as retaining the salvage.
What Is Retaining the Salvage?
Retaining the salvage means you keep your totaled car instead of giving it to the insurance company. This option is available in Arizona, but there are some conditions:
- Deduction from Settlement: If you choose to keep the car, the insurance company will deduct the salvage value from your settlement. For example, if the car’s salvage value is $2,000 and the settlement is $10,000, you will receive $8,000.
- Salvage Title: The car will be issued a salvage title. This indicates that the vehicle has been declared a total loss. Salvage titles are subject to specific regulations, and vehicles with this title may be harder to insure or sell.
- Repair Costs: If you plan to repair the car, you will need to pay for the repairs out of pocket. Additionally, you may need to pass inspections to make the car roadworthy again.
Why Might Someone Keep a Totaled Car?
There are several reasons why someone might choose to keep a totaled car:
- Sentimental Value: The car may hold sentimental value, such as being a family heirloom or having a unique history.
- Repair Potential: In some cases, repair costs may be lower than estimated if you can do the work yourself or find a more affordable mechanic.
- Parts and Scrap Value: The car might have valuable parts that can be sold individually, or its scrap value may exceed the insurance company’s salvage deduction.
What Happens If You Let the Insurance Company Keep the Car?
If you decide not to retain the salvage, the insurance company will take ownership of the car. They typically sell it to a salvage yard or at auction. The proceeds from this sale help the insurance company recover some of their costs.
Once you agree to let the insurance company keep the car, you will receive your settlement. This payment represents the car’s ACV minus any deductibles. At this point, you are no longer responsible for the car.
Salvage Titles in Arizona
In Arizona, vehicles with salvage titles are subject to specific rules. If you repair a salvaged car and want to drive it again, you must apply for a restored salvage title. The car must pass an inspection by the Arizona Department of Transportation (ADOT) to ensure it is safe to drive.
A restored salvage title allows the car to be registered and insured, but it will always carry the salvage designation. This can affect its resale value and insurability.
Steps to Take When Your Car Is Totaled in Arizona
If your car is totaled, follow these steps to navigate the process smoothly:
- File a Claim: Notify your insurance company about the accident and start the claims process.
- Assessment: Allow the insurance adjuster to assess the damage and determine the car’s ACV.
- Settlement Offer: Review the settlement offer from your insurance company. Make sure it accurately reflects the car’s value.
- Decide on Salvage: Decide whether to retain the salvage or let the insurance company keep the car.
- Complete the Paperwork: If you keep the car, work with the insurance company to transfer the salvage title to your name.
- Plan Repairs or Sale: If you keep the car, decide whether to repair it or sell it for parts.
Conclusion
In Arizona, if your car is totaled, who keeps it depends on your decision. You can choose to let the insurance company take the car and receive a full settlement, or you can keep the car by retaining the salvage. Each option has its pros and cons, so it’s important to weigh your choices carefully.
Understanding the process and knowing your rights can help you make the best decision. Whether you keep your totaled car or let it go, ensure that you’re satisfied with the settlement and have a clear plan for moving forward. By staying informed, you can navigate the situation with confidence.
