When you file a claim with your motorcycle insurance company after an accident, there is a possibility that they may determine your bike to be a total loss. But what does that mean exactly? When an insurance company totals your motorcycle, it means that the cost to repair the damages exceeds a certain percentage of the bike’s actual cash value (ACV). This article will explore what factors insurance companies consider when making this determination and how it can impact you as a motorcycle owner.

It may be best to hire a motorcycle accident lawyer to help ensure that the insurance company treats you fairly. It is especially true if you suffered injuries in the accident.


The Insurance Company’s Evaluation Process

An adjuster will be assigned to your case after you report the accident to your insurance company. The adjuster will evaluate the damage to your motorcycle and determine whether it’s a total loss. The evaluation process typically involves:

  • Inspection: The adjuster will inspect your motorcycle to assess the extent of the damage. They may also consider any pre-accident damage.
  • Comparative Market Analysis: The adjuster will conduct a comparative market analysis to determine the ACV of your motorcycle. It involves researching the prices of similar motorcycles in your area.
  • Cost of repairs: The adjuster will estimate the cost of repairs based on their inspection and any additional information provided by a repair shop.

If the cost of repairs exceeds a certain percentage of the motorcycle’s ACV, the insurance company will declare it a total loss.

The Role of a Motorcycle Accident Attorney

Dealing with a totaled motorcycle can be complex, especially when negotiating with the insurance company. That’s where a motorcycle accident attorney can make a significant difference. Here are some ways an attorney can help you:

  • Evaluating the True Value of Your Motorcycle: Insurance companies may undervalue your motorcycle during the settlement process. An attorney can assess the true value of your motorcycle, considering factors that the insurance company may overlook, such as aftermarket modifications or rare components.
  • Negotiating a Fair Settlement: Attorneys have experience negotiating with insurance companies and can help you secure a fair settlement. They understand the tactics that insurance adjusters may use to try and minimize your compensation and can advocate on your behalf.
  • Exploring Additional Compensation: In some cases, you may be entitled to additional compensation beyond the settlement offered by the insurance company. An attorney can help you identify any potential sources of additional compensation, such as uninsured motorist coverage or personal injury claims.
  • Handling the Legal Process: Dealing with insurance paperwork and legal procedures can be overwhelming, especially when recovering from injuries. An attorney can handle the legal process on your behalf, ensuring all necessary documentation is filed correctly and within the deadlines.

When facing the aftermath of a totaled motorcycle, having an experienced motorcycle accident attorney in your corner can give you peace of mind and help you navigate the complexities of the insurance claims process.

The Calculation of Actual Cash Value

Your motorcycle’s actual cash value (ACV) is crucial to the total loss calculation. The ACV is the fair market value of your bike at the time of the accident or incident. Insurance companies use various methods to determine the ACV, including market research, appraisals, and online valuation tools.

Understanding how your insurance company calculates the ACV is important because it directly affects the total loss determination. Suppose the cost to repair your motorcycle exceeds a certain percentage, usually around 70 to 75 percent, of its ACV. In that case, the insurance company will likely consider it a total loss. This threshold ensures that the insurance company makes more financial sense to settle the claim by paying you the ACV rather than repairing the bike.

The Total Loss Threshold

The total loss threshold is the percentage of the motorcycle’s ACV insurance companies use to determine if a bike should be considered a total loss. As mentioned earlier, this threshold is typically set between 70 to 75 percent. Once the cost to repair the damages exceeds this threshold, the insurance company will declare your motorcycle a total loss.

The total loss threshold varies between insurance companies and jurisdictions, so be sure to review your policy or consult with your insurance agent to understand the specific threshold that applies to your situation. Knowing this threshold can help you when negotiating with the insurance company.

Options for Handling a Totaled Motorcycle

When your motorcycle is declared a total loss, you have several options for handling the situation. Here are the most common options:

Cash Value Settlement: In this option, the insurance company will offer you the ACV of your motorcycle minus any applicable deductibles or depreciation. You can choose to accept this amount and use it to purchase a replacement motorcycle or for any other purpose.

  • Salvage Title: If you decide to retain salvage, it means that you want to keep your totaled motorcycle. The insurance company will deduct the salvage value from the total settlement amount. You can then use the remaining settlement to repair your motorcycle or purchase a replacement. A salvage title indicates that the motorcycle has been significantly damaged or declared a total loss by the insurance company. While it may affect the bike’s resale value, keeping it with a salvage title allows you to repair and ride it or part it out for spare parts.
  • Buyback: Some insurance companies offer the option to buy back your totaled motorcycle at a reduced price. By doing so, you can own the bike outright and have the freedom to repair or sell it as you see fit. However, it’s crucial to consider the extent of the damages and potential repair costs before choosing this option.
  • Replacement: If you have comprehensive coverage or an endorsement covering your motorcycle’s replacement cost, the insurance company may offer you a bike of a similar make and model. This option allows you to get back on the road without finding a new bike.

It’s essential to consider your financial situation, the extent of the damage, and your attachment to the motorcycle when deciding how to handle a totaled bike. Each option has pros and cons, so weigh them carefully before deciding.

Negotiating with the Insurance Company

When dealing with a totaled motorcycle, you or your attorney will need to negotiate with the insurance company to ensure a fair settlement. Here are some tips and strategies to help you in the negotiation process:

  • Document Damages: Take detailed photographs of your motorcycle’s damages and gather all relevant repair estimates. Proper documentation will strengthen your case and demonstrate the extent of the damages.
  • Obtain Comparative Quotes: Get quotes from multiple repair shops to compare the estimated cost of repairs. It will give you a better understanding of the fair market value of the repairs and provide evidence to support your negotiations.
  • Present a Counteroffer: If you believe the insurance company’s settlement offer is too low, don’t hesitate to present a counteroffer based on your research and documentation. Be prepared to provide evidence and support your argument for a higher settlement amount.
  • Consider Professional Assistance: If negotiations become challenging or you’re not confident handling them on your own, consider consulting with an attorney or professional insurance claims adjuster. They can provide guidance and advocate on your behalf to ensure a fair settlement.

Remember, negotiations with the insurance company should be conducted professionally and respectfully. Be prepared to provide evidence and support your arguments, but be open to reasonable compromises to reach a favorable outcome.

Understanding Gap Insurance

Gap insurance is an optional coverage that can protect motorcycle owners in the event of a total loss. It covers the difference between the ACV of the motorcycle and the remaining loan balance or lease payoff. This coverage can be particularly beneficial if you owe more on your motorcycle than its ACV at the time of the accident. Without gap insurance, you can be responsible for paying off the remaining balance out of pocket.

Suppose you believe the insurance company’s total loss determination is unfair or inaccurate. In that case, you may have legal options available to you. Here are a few potential steps you can take:

  • File a Lawsuit: If the insurance company is refusing to cooperate or settle for a fair amount, you may consider filing a lawsuit. Be sure to consult with an attorney specializing in insurance claims to understand your jurisdiction’s legal process and requirements.
  • Seek Arbitration: Some insurance policies include clauses requiring parties to submit disputes to arbitration instead of pursuing litigation. Arbitration can be a less formal and costly alternative to a lawsuit and may lead to a fair resolution.
  • Contact State Insurance Department: If you believe the insurance company’s actions are unfair or unethical, contact your state’s insurance department to file a complaint. They may investigate the matter and take appropriate action if necessary.

Engaging in a legal process should be considered a last resort when other negotiation methods fail. You will want to consult with a qualified attorney who can guide you through the process and help you understand the potential outcomes.

What if You Suffered Physical Injuries in a Motorcycle Accident?

If you’ve been involved in a motorcycle accident and suffered physical injuries, it’s in your best interest to understand the steps you should take to protect your rights and ensure you receive the compensation you deserve. Dealing with injuries can be overwhelming, both physically and emotionally, but retaining an attorney experienced in motorcycle accident claims can make a significant difference in your case’s outcome.

Young man at the reception desk of a hospital.

First, you should prioritize your health and safety. Seeking immediate medical attention is essential, even if you believe your injuries are minor. Some injuries may not be immediately apparent, and a prompt medical evaluation will document your injuries and provide necessary treatment.

Once you have addressed your medical needs, it’s time to take proper legal action. An attorney specializing in motorcycle accidents can guide you through the process, ensuring you understand your rights and options. They will thoroughly investigate the accident, gather evidence, and build a strong case on your behalf.

One of the main reasons to retain an attorney is to determine and prove liability. Establishing fault is crucial in personal injury cases, as it will determine who is responsible for compensating your injuries and damages. An experienced attorney will analyze the accident scene, review police reports, gather witness statements, and consult with accident reconstruction experts if necessary. They will use this evidence to build a compelling case demonstrating the other party’s negligence, increasing your chances of a successful claim.

While you focus on your recovery, your attorney will handle all communication and negotiations with insurance companies. Insurance adjusters may try to minimize your injuries or offer a low settlement, but having a skilled attorney protects your rights. They will calculate the full extent of your damages, including medical bills, lost income, pain and suffering, and any future medical expenses or disabilities. Armed with this information, your attorney will negotiate aggressively to secure a fair and just settlement.

If a fair settlement cannot be reached through negotiations, your attorney will be prepared to take your case to court. They will present your case to a judge and jury and advocate for your rights, making a compelling argument for the compensation you are entitled to. With their skills and knowledge of the legal process, your attorney will navigate the complexities of litigation and guide you every step of the way.

Was Your Motorcycle Totaled in an Accident? Contact a Motorcycle Accident Attorney Today

Steven A. Bagen
Steven A. Bagen, Esq., Motorcycle Accident Attorney

If you’ve been involved in a motorcycle accident, you may face the unfortunate situation of having your insurance company declare your motorcycle a total loss. It means that the cost to repair your bike exceeds its current value, and the insurance company is unwilling to cover the repairs. Dealing with a totaled motorcycle can be overwhelming, but you should know that you have options. Hiring a personal injury attorney can help you navigate through the process.

By understanding the total loss process, calculating the ACV, and knowing your options, you can navigate the situation more confidently and ensure a fair settlement with your insurance company. Remember to gather evidence, be prepared for negotiations, and seek professional legal assistance.