Why Do Insurance Companies Total Motorcycles With Little Damage?

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Have you or your loved one been involved in a motorcycle accident in Florida? Ordinarily, immediate medical care tops the priority list for individuals after an accident. You can then consider other aspects like motorcycle damage later when you achieve medical stability.

One thing that may catch you as a surprise is the totaling of the motorcycle, especially if it has slight damage. Your insurer may write off the motorcycle as a total loss if they determine the cost or repairs are higher than its market value. The company will offer you a settlement in the sale value amount.

We’ll explain when a motorcycle is a total loss and how the motorcycle accident lawyers at Stevenson Klotz Injury Lawyers can help you through the claims and litigation process.

How Do Insurance Companies Determine When a Motorcycle Is Totaled?

Insurance providers limit a motorcycle’s total loss to situations where the cost of repairs exceeds its value. On average, the percentage of repair costs should exceed a vehicle’s or motorcycle’s value by 50–70%. Whether your motorcycle fits to be declared a total loss varies from state to state.

When a Motorcycle Is Considered a Total Loss in Florida

Florida has a Total Loss Threshold (TLT) that calculates if an automobile qualifies to be declared a total loss after an accident. The TLT is a legal limit within which an insurance provider declares a vehicle/motorcycle totaled.

This threshold also guides the acquisition of a certificate of destruction or salvage certificate of title for the damaged automobile.

In Florida, the TLT is 80%. So, should the total repair costs for your damaged motorcycle exceed 80% of its Actual Cash Value (ACV) before the accident, it could be a total loss.

Insurance providers may deem it a total loss even though it is possible to repair the motorcycle at a lower cost than its market value.

Florida law outlines a damaged automobile’s ACV as its pre-accident fair market value. Or, the ACV can be the replacement cost—the actual cost of purchasing a similar car or motorcycle—minus depreciation.

What happens when you have a totaled motorcycle in Florida?

State laws outline insurance amounts and policy terms. Once your motorcycle is declared a total loss, Florida law mandates insurance providers to replace it.

Alternatively, they can pay you the ACV of the motorcycle less any deductible amount, including appropriate sales taxes.

When a Motorcycle Is Considered a Total Loss in Alabama

In Alabama, a total loss occurs when an insurance provider or any other person offers monetary or other settlements to a person for a damaged motorcycle. The damage, in this case, is greater than or equal to 75% of its fair retail value before the accident.

Your motorcycle’s fair retail value is the amount of money it would sell to another person. The value also helps determine the insurance replacement value of the motorbike.

What happens when you have a totaled motorcycle in Alabama?

Under Alabama law, an insurance company should replace the damaged motorcycle if declared a total loss. It can be your insurance provider or the at-fault driver’s insurance company.

Alternatively, they should replace it or pay you the actual cost minus any deductible amount outlined in the policy.

The payment settlement should purchase a proportionate motorcycle of:

  • The same model year.
  • A similar manufacturer.
  • Akin mileage and options.
  • A similar condition and body style.

The payment settlement should also include license fees, applicable taxes, and other fees related to the ownership transfer while purchasing a similar motorcycle.

Some insurance companies may fail to correctly calculate the payment settlements they make in your total loss claim.

Some fees or costs they may neglect including are:

  • Sales tax
  • Vehicle registration fees
  • License plate transfer fees
  • Title transfer fees

What Can You Do With a Totaled Motorcycle?

Ideally, many motorcycle owners prefer their motorcycles repaired rather than declared a total loss. It is possible to keep your motorcycle after it is declared totaled.

Keeping a totaled motorcycle in Florida

Your motorcycle becomes a salvage automobile once declared a total loss. You can transfer a total loss automobile to the insurance company or repair it on your own. If you settle for the latter, you must get a salvage title to keep and continue operating it.

In Florida, you or the insurance company apply for the salvage title with the Florida Department of Highway Safety and Motor Vehicles (DHSMV).

Applying for the title depends on whether an insurance settlement salvages the vehicle or you apply minus the involvement of an insurance company.

A salvage title applies when you want to repair and re-use the motorcycle after an accident. Once you receive it, you will receive the Actual Cash Value of the motorcycle, less its salvage value, from your insurance provider.

Alternatively, you can apply for a certificate of destruction if you want to sell the motorcycle for parts.

Keeping a totaled motorcycle in Alabama

It is possible that repairing a motorcycle after an accident may never return it to its original state. After the repair, the motorcycle’s worth isn’t as much as it would be if it weren’t damaged.

In certain circumstances, you may seek Diminished Value damages for it. Diminished Value claims are mostly compensable in Alabama by the Property Damage coverage.

The coverage falls under the at-fault driver’s automobile insurance policy. But Diminished Value ordinarily isn’t part of a motorcycle insurance policy if you have Collision insurance.

Should I Seek Legal Representation for Motorcycle Accidents?

Suffering a motorcycle incident takes a toll on your physical and mental health. It takes dedicated medical intervention to restore your health to where it was before you sustained a motorcycle accident.

Your peace of mind is essential to facilitate a quick recovery. It could be brought upon by support from family and friends. Also, seeking experienced attorney services to represent your litigation and claims process could relieve your stress while you focus on recovering.

It is advisable to seek legal representation for your motorcycle accident.

Contact an Experienced Injury Attorney About Motorcycle Accidents

If you or a loved one are involved in a motorcycle accident, seek adequate legal representation to protect your rights and interests.

Stevenson Klotz Injury Lawyers have experience handling motorcycle accident claims and litigation processes. We will fight on your behalf for your right to obtain compensation after the accident.

Contact our personal injury lawyers in Florida and Alabama. We’d be happy to help.

Motorcycle Accident Claim FAQs

Does the salvage title allow me to drive my motorcycle?

No, you cannot drive the motorcycle on public roads, nor can you get a license plate with the salvage title. Repair the motorcycle, have it inspected, and then you will be given a rebuilt title. Only then can you drive the motorcycle on public roads.

Should I file a lawsuit after my motorcycle has been totaled?

You should file a lawsuit to recover the total loss of the motorcycle. Hire an attorney to attest your motorcycle’s pre-crash value and provide evidence to substantiate why you need the amount for which you sued.

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