When your vehicle is involved in a serious accident, you may find out that the insurance company has decided to declare your vehicle a total loss. Whether an Insurance Company declares a vehicle a total loss is governed by Maryland law and is not arbitrarily left up to the Insurance Company. A vehicle is a total loss according to Maryland Law if [(9) “Total loss” means the condition of a motor vehicle for which:(a) The cost of repairs equals or exceeds:(i) The actual cash value of the motor vehicle as calculated in accordance with Regulation .04 of this chapter; or(ii) A percentage of the actual cash value of the motor vehicle established by the insurer and calculated in accordance with Regulation .04 of this chapter; or(b) The total cost to repair the motor vehicle, plus the estimated cost of potential repairs from hidden damage, plus any anticipated rental coverage, may equal or exceed:(i) The actual cash value of the motor vehicle as calculated in accordance with Regulation .04 of this chapter; or(ii) A percentage of the actual cash value of the motor vehicle established by the insurer and calculated in accordance with Regulation .04 of this chapter.
What happens if I do not want my vehicle totaled?
The process seems arbitrary when dealing with the Insurance Company on the issue of the value for the total loss of your vehicle. However it should not be arbitrary and there is a specific procedure and formula spelled out in the Code of Maryland Regulations. Rather than following the requirements of the State regulation the Insurance Companies have been hiring outside vendors who allegedly go on the internet and find similar vehicles for sale. Often if you follow up on their paperwork you realize that few if any of the alleged vehicles are actually for sale. In addition  state regulations do not recognize the insurance company outside vendor method of evaluating total losses.
The Code of Maryland Regulation Maryland Insurance administration section:31.15.12.02B9 defines when a vehicle is a total loss:
(9) “Total loss” means the condition of a motor vehicle for which:
(a) The cost of repairs equals or exceeds:
(i) The actual cash value of the motor vehicle as calculated in accordance with Regulation .04 of this chapter; or
(ii) A percentage of the actual cash value of the motor vehicle established by the insurer and calculated in accordance with Regulation .04 of this chapter; or
(b) The total cost to repair the motor vehicle, plus the estimated cost of potential repairs from hidden damage, plus any anticipated rental coverage, may equal or exceed:
(i) The actual cash value of the motor vehicle as calculated in accordance with Regulation .04 of this chapter; or
(ii) A percentage of the actual cash value of the motor vehicle established by the insurer and calculated in accordance with Regulation .04 of this chapter.
                In laymen’s terms a vehicle is a total loss when the value of the vehicle is less than the cost to repair the vehicle.
Code of Maryland Regulation Maryland Insurance administration section:31.15.12.03 thru 31.15.12.07 provide regulations on how to determine the value of a total loss and Insurance Companies must follow these regulations or be subject to penalties from the Insurance Commissioner. 1. An offer on a total loss must be made within 10 days of an Insurance company accepting liability. 2. The insurer’s minimum offer, subject to applicable deductions, shall be: A. The total of: (1) The retail value for a substantially similar motor vehicle from a nationally recognized valuation manual or from a computerized data base that produces statistically valid fair market values for a substantially similar vehicle as defined in Regulation .02B(7) of this regulation; and (2) Regardless of whether the claimant retains salvage rights, the applicable taxes and transfer fees pursuant to COMAR 11.11.05; or B. The total of: (1) A quotation for a substantially similar motor vehicle obtained by or on behalf of the insurer from a qualified dealer at a location reasonably convenient to the claimant; and (2) Regardless of whether the claimant retains salvage rights, the applicable taxes and transfer fees pursuant to COMAR 11.11.05.
Insurance companies regularly violate this provision by refusing to use Kelly Blue Book or NADA evaluations or failing to at least take these into consideration when valuing a total loss. They say they are complying by using an outside service that represents a computerized data base that produces statistically valid fair market values for a substantially similar vehicle, however it does not appear to be a data base but a system that compares values by making calls. Further rarely is a quotation from a qualified dealer at a location reasonably convenient to the claimant.

  1. Once a total loss offer is made the Insurance company must provide you the basis for the offer including any deductions made for the condition of the vehicle and mileage deductions.
  2. You as the Owner of the vehicle have a right to reject the Total loss offer and make a counter offer based upon the following factors: (a) Dealer quotations for a substantially similar motor vehicle; (b) Advertisements for a substantially similar motor vehicle; or (c) Any other source of valuation for a substantially similar motor vehicle.
  3. If an insurer rejects a claimant’s counteroffer for the total loss made pursuant to §A(2) of this regulation, the insurer shall, within 5 business days, send to the claimant a written explanation in clear and understandable language of why the information relied on by the claimant in the counteroffer does not provide a more accurate valuation than the information relied on by the insurer in its offer.

If you are not happy with the Insurance Company offer for your total loss claim than you should contact dealers in your area for a written estimate asking them what they would sell a car just like yours was before the accident if they had one on their lot. If the dealer has a similar car in similar condition and mileage on their lot, than that would be the best evidence of total loss value. Finally if all else fails, you can look in the newspaper or on the internet for vehicles similar to yours in mileage and conditions and present them to The Insurance Company.
.03 Duties of Insurer Following Determination of Total Loss of Motor Vehicle.

  1. The deadlines set by §§B—D of this regulation do not apply to a claim for damage that results in the total loss of a motor vehicle if:

(1) There is a good faith dispute as to the obligation of the insurer under the contract; or
(2) There are factors beyond the control of the insurer that prevent the insurer from complying with the deadlines set by §§B—D of this regulation, including a vehicle that is limited in production, specialty in nature, or older than 10 model years at the time of the total loss.

  1. First-Party Claimants—In General. Except as provided in §C of this regulation, within 10 business days after an insurer determines that a motor vehicle of a first-party claimant is a total loss, the insurer shall:

(1) Make an offer of a cash settlement pursuant to Regulation .04 of this chapter; or
(2) If authorized by the policy, replace the motor vehicle pursuant to Regulation .07 of this chapter.

  1. First-Party Claimants—Unrecovered Theft Loss. In the case of an unrecovered theft loss of the motor vehicle of a first-party claimant, an insurer shall make an offer for the total loss within the later of:

(1) 30 days after receipt of notification of a claim; or
(2) The time provided in the policy.

  1. Third-Party Claimants. Within 10 days after an insurer determines that a motor vehicle of a third-party is a total loss, the insurer shall make an offer of a cash settlement pursuant to Regulation .04 of this chapter.

Total loss
Code of Maryland Regulation Maryland Insurance administration section:31.15.12.04
.04 Cash Settlement.
If an insurer elects to make a cash settlement for the total loss of a motor vehicle pursuant to Regulation .03 of this chapter, the insurer’s minimum offer, subject to applicable deductions, shall be:

  1. The total of:

(1) The retail value for a substantially similar motor vehicle from a nationally recognized valuation manual or from a computerized data base that produces statistically valid fair market values for a substantially similar vehicle as defined in Regulation .02B(7) of this regulation; and
(2) Regardless of whether the claimant retains salvage rights, the applicable taxes and transfer fees pursuant to COMAR 11.11.05; or

  1. The total of:

(1) A quotation for a substantially similar motor vehicle obtained by or on behalf of the insurer from a qualified dealer at a location reasonably convenient to the claimant; and
(2) Regardless of whether the claimant retains salvage rights, the applicable taxes and transfer fees pursuant to COMAR 11.11.05.
Code of Maryland Regulation Maryland Insurance administration section:31.15.12.05
Code of Maryland Regulation 31.15.12.02B7
(7) “Substantially similar motor vehicle” means a motor vehicle that, in comparison to a damaged motor vehicle:
(a) Is the same make and model as the damaged motor vehicle;
(b) Is the same year as, or a more recent year than, the damaged motor vehicle;
(c) Contains at least the same major options as the damaged motor vehicle;
(d) Is in a condition substantially similar to or better than the condition of the damaged motor vehicle immediately before the damage occurred; and
(e) Has mileage that is within the greater of 4,000 miles or 10 percent of the mileage on the damaged motor vehicle at the time that the damage occurred unless the vehicle is limited in production, specialty in nature, or older than 10 model years at the time of total loss.
.05 Contents of Settlement Offer.

  1. In General. A settlement offer made by an insurer pursuant to Regulation .04 of this chapter shall:

(1) State the amount being offered;
(2) Inform the claimant that, on request from the claimant, the insurer shall provide the claimant in writing:
(a) A copy of the settlement offer;
(b) The method used to arrive at the value of the motor vehicle, including identification of any books, manuals, or databases used;
(c) A detailed explanation of the insurer’s calculation of the motor vehicle’s total loss value, including the calculation of any value added to the motor vehicle by options;
(d) A list of all deductions that will be made from the value of the motor vehicle; and
(e) A copy of the inspection guidelines relied on by the insurer to determine the condition of the vehicle at the time of the loss; and
(3) Inform the claimant that the claimant may, in writing, reject the settlement offer and make a counteroffer in accordance with Regulation .06 of this chapter.

  1. If a claimant makes a request under §A(2) of this regulation, the insurer shall provide a response within 7 business days of the date of the request.

Code of Maryland Regulation Maryland Insurance administration section:31.15.12.06
.06 Response by Claimant to Settlement Offer.

  1. In General. After receipt of a settlement offer, a claimant may:

(1) Accept the offer; or
(2) In writing, reject the offer and make a counteroffer based on:
(a) Dealer quotations for a substantially similar motor vehicle;
(b) Advertisements for a substantially similar motor vehicle; or
(c) Any other source of valuation for a substantially similar motor vehicle.

  1. Duty of Insurer. If an insurer rejects a claimant’s counteroffer made pursuant to §A(2) of this regulation, the insurer shall, within 5 business days, send to the claimant a written explanation in clear and understandable language of why the information relied on by the claimant in the counteroffer does not provide a more accurate valuation than the information relied on by the insurer in its offer.

Code of Maryland Regulation Maryland Insurance administration section:31.15.12.07
.07 Replacement of Motor Vehicle.
If an insurer elects to replace a motor vehicle pursuant to Regulation .03B(2) of this chapter and the insurance policy provides authority for the replacement as an acceptable method of settlement, the insurer shall provide the claimant with a motor vehicle that is:

  1. A substantially similar motor vehicle;
  2. Immediately available; and
  3. Subject to any deductible, paid for by the insurer.
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