Total Loss in Louisiana: Explained.

Grady Flattmann
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Local Covington, Louisiana attorney focusing 100% on personal injury matters.

The Insurance Company Says My Car Is A "Total Loss."  What Does That Mean?

In Louisiana, an insurance company has the right to deem your car a "total loss" if the cost to fix the damage is seventy-five percent or more of the vehicle's market value as determined by the most current National Automobile Dealers Association Handbook.  (Louisiana Revised Statute 32:702). 

When a vehicle is deemed a "total loss," the insurance company has the right to pay you the "actual cash value" (ACV) of the vehicle.  The ACV is not necessarily the Kelley Blue Book value.  Instead, the insurance company may locate three comparable vehicles for sale in your area (usually via the internet), take their average price, and deduct for any preexisting damage your vehicle may have.  They should then add sales tax and license fees and present a total loss offer to you. 

What If I Have A Note On My Vehicle?

If you have an existing mortgage or note on your damaged vehicle, then the insurance company will likely ask you for that information and will pay the bank directly.  In those situations, it would be a good idea to obtain copies of any payments made to the bank for your records.  If the amount the insurance company is paying exceeds what you owe on the vehicle, the insurance company should pay you the difference. 

What If I Owe More On The Vehicle Than I Am Getting?

Unfortunately, Louisiana law does not require the insurance company to pay more than the ACV on your vehicle.  If you owe more on the vehicle than you are being paid, you should check to see if you have GAP insurance on your vehicle.  GAP insurance is offered by the car dealer when you purchase a vehicle and provides coverage for the difference between what you are being paid and what you owe.  In other words, it covers the "gap." 

Can I Keep My Car If It Is A Total Loss?

If a car is very old, its ACV may be low, meaning that it doesn't take much damage to hit the seventy-five percent mark to be deemed a total loss.  In cases where an owner wants to retain their vehicle instead of allowing the insurance company to take it, they have the option of taking a lessor amount in exchange for keeping the vehicle.  The amount the insurance company will deduct from its offer is called the "salvage value."  But beware.  Even if a vehicle which has been deemed a total loss is repaired, it must receive a new title from the DMV known as a "salvage title."  Obtaining a salvage title can be a somewhat complicated process.

What Else Should I Know?

When the insurance company is assessing the actual cash value of your vehicle, it is important to provide them with receipts from any recent improvements you have made to it.  For instance, if you recently bought new tires, installed a new battery, or put a new engine in, it may increase the value of the vehicle.

Contact us today at (985) 590-6182 for a free and confidential consultation from our office located in Covington and serving all areas of the Northshore including St. Tammany, Tangipahoa, and Washington Parish (Covington, Mandeville, Madisonville, Slidell, Hammond) and the New Orleans metro!