What Happens When the Insurance Company Totals Your Motorcycle?

Serious motorcycle accidents happen when other people drive negligently and recklessly under the circumstances. When a motorcycle accident occurs, motorcyclists may suffer severe injuries, not to mention significant property damage to their motorcycles.

In most jurisdictions, a motorcycle is a total loss whenever the cost of repairs, along with the motorcycle’s scrap value, is more than the fair market value of the motorcycle before the accident occurred.

Usually, suppose your insurance company deems your motorcycle a total loss. In that case, it will compensate the motorcycle owner for the full market value of their motorcycle minus any deductibles that are then outstanding.

If your motorcycle suffered extensive damage in an accident, or if you suffered physical injuries in an accident, you need to consult a knowledgeable motorcycle accident attorney as quickly as possible.

Your lawyer can investigate your accident circumstances and explore your options for moving forward. Your attorney may also file a property damage claim on your behalf – or a personal injury claim, depending upon your circumstances. Throughout the claims-filing process, your lawyer can aggressively negotiate with insurance company representatives on your behalf and take appropriate legal action if the insurance company refuses to compensate you fully and fairly.

Every step of the way, your attorney will act in your best legal interests. They can also answer all of your legal questions and explain all of your options so that you can make both intelligent and informed decisions throughout your pending case.

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What is a Motorcycle’s Fair Market Value – or FMV?

What Happens When the Insurance Company Totals Your Motorcycle?

According to the National Association of Insurance Commissioners, or NAIC, the fair market value of a motorcycle is a specific calculation: the price that the average motorcycle purchaser is going to pay to buy your motorcycle in its current condition before the accident if you were to list the motorcycle for sale on the open market.

Moreover, the FMV of a motorcycle is different from the likely Kelley Blue Book (KBB) value. In some situations, the value of a motorcycle, as listed in the KBB, is far less than its actual FMV.

This is because the KBB value does not always account for several factors that may be particular to an individual motorcycle. Those factors can include unique accessories and features the motorcycle has, personal features, and any sentimental value related to the motorcycle.

It is also essential to differentiate between a motorcycle’s fair market value and its actual cash value, or ACV. The real cash value of a motorcycle considers the replacement cost of a new motorcycle.

Still, it subtracts the depreciation for a motorcycle that sustained damage in the event of an accident. In some cases, insurance company appraisers might argue that the ACV and FMV of a motorcycle are approximately the same. However, those numbers are not always equal.

What Must the Insurance Company Pay for a Totaled Motorcycle?

Victims of motorcycle accidents who incur property damage to their motorcycle deserve to recover favorable monetary compensation. If the insurance company totals a motorcycle, it must pay for the full market value minus any deductibles currently in effect.

In addition, the insurance company must evaluate the motorcycle’s full market value as of the time when the motorcycle accident happens – not at the time of the owner’s initial purchase.

Some states also have a certain cut-off value for motorcycle repairs, so if the insurance company totals a motorcycle, it will not pay for any repairs.

Features That May Affect the Total Value of a Motorcycle

Some motorcycles come with unique features that may increase their overall value, not to mention the settlement compensation that the insurance company offers you for your property damage.

However, some motorcycles contain flaws, such as scratches, dents, and other imperfections, that may decrease their fair market value in a property damage claim.

Evaluation of Motorcycle Damage

Some of those factors may include:

  • Modifications that the motorcycle owner later made to their motorcycle, including LED underglow, large rims, or custom paint work, may add overall value to the motorcycle
  • The odometer reading on the motorcycle, since the higher the mileage on the motorcycle, the less value it typically has
  • The overall condition of the motorcycle
  • The color of the motorcycle and whether or not it is tough to find or is exceptionally rare
  • The year of the motorcycle, given that motorcycles, like automobiles, routinely decrease in value with their age
  • The presence of dents, scratches, and other imperfections on the motorcycle body may decrease its overall value

Property Damage Negotiations Following a Motorcycle Accident

After a motorcycle accident happens, an attorney in your area can handle all property damage negotiations with insurance company representatives on your behalf.

Whenever you negotiate with an insurance company representative, you and the insurance company are in an adversarial relationship. As an accident victim who incurred property damage, you want to recover as much monetary compensation from the insurance company as possible.

However, compensating you fairly is not in the insurance company’s best interests. Instead, the insurance company wants to offer you as little monetary compensation as possible to settle a property damage or personal injury claim. If they have to pay out significant monetary compensation to you, they cannot distribute the money to their shareholders.

A skilled motorcycle accident lawyer can aggressively negotiate with insurance company representatives on your behalf and pursue the compensation you need for the total loss value of your motorcycle.

If the insurance company places an initial settlement offer on the table, your lawyer can negotiate with the insurance company for a better offer. However, to take this step, you must likely introduce evidence that the insurance company is undervaluing your claim.

Potential evidence may include:

  • Documentation that lists hard-to-find or unique features on your motorcycle
  • The actual value, as referenced in the KBB
  • Documentation that shows that you regularly maintained your motorcycle
  • The results of an independent motorcycle appraisal that you completed

In cases where a motorcycle accident victim and an insurance company cannot agree on a settlement number, the accident victim can file a property damage claim in the state court system for additional compensation.

Instead of litigating a property damage claim in court, the parties may also agree to some type of alternative dispute resolution (ADR) proceeding, such as arbitration.

What if Your Damaged Motorcycle is “Underwater”?

A motorcycle or automobile is “underwater” when the current amount owing on a loan is more than the value of the vehicle. Despite property damage, a motorcycle owner will typically have to continue making loan payments.

To eliminate this problem, motorcycle owners should obtain gap insurance coverage before a motorcycle accident happens. If they wait for this coverage after the accident, it will not do them any good.

What if I Suffered Physical Injuries in a Motorcycle Collision?

In addition to sustaining severe property damage to their motorcycle, a motorcycle accident victim may also suffer severe physical injuries in an accident scenario.

These injuries typically happen because, with the potential exception of their helmets, motorcyclists are directly vulnerable to their surrounding environment. As a result, if they fall in a crash, they may suffer severe injuries.

Motorcycle Accident Injuries

One of the most common causes of motorcycle accidents is driver error and negligence. In many cases, these accidents happen when drivers disregard traffic laws and standard traffic laws.

For example, a driver might aggressively speed around a motorcycle, fail to yield the right-of-way to a motorcyclist at a busy traffic intersection, or fail to use their turn signals while driving.

At other times, motorcycle crashes may happen when drivers exhibit various types of road rage, such as tailgating a motorcyclist, cutting them off in traffic, or otherwise recklessly operating their vehicle when a motorcycle is nearby.

As a result of these reckless driving maneuvers, another driver may cause their vehicle to strike a motorcycle, knocking the cyclist off their bike and causing severe and sometimes deadly injuries.

Motorcycle crashes may also happen when drivers drink and drive. Alcohol intoxication causes severe accidents because intoxicated drivers cannot drive safely and carefully. Intoxicated drivers will suffer physical and mental impairments, such as blurred vision, dizziness, lack of coordination, impaired judgment, inability to judge distances, delayed reaction time, and delayed reflexes.

As a result, an intoxicated driver may not even see a motorcyclist, let alone be able to stop in time to avoid a collision. When a drunk driver causes a motorcycle crash, the drunk driver may be subject to both criminal and administrative penalties. Additionally, if they cause a motorcycle crash, which leads to injuries, the at-fault driver may have to pay the motorcyclist monetary damages through their insurance company.

Finally, some motorcycle accidents occur when other people drive in a careless or distracted manner. For example, they might turn their head to discipline a young child, roughhouse with vehicle passengers, listen to loud music in their vehicle, program a GPS navigation system, text on a cellular phone or tablet, or otherwise divert their attention away from the road.

These distractions can prevent a driver from noticing a motorcyclist who is low to the ground, bringing about a severe accident.

If you recently suffered injuries in a motorcycle accident resulting from another driver’s negligence, your motorcycle accident attorney can handle a personal injury claim, as well as a property damage claim, on your behalf. Your attorney will aggressively fight for your legal rights and interests and pursue the compensation you need for your bodily injuries and other accident-related losses.

Types of Motorcycle Accident Injuries

The injuries that a motorcycle accident victim suffers will vary, depending on the accident circumstances, including whether the accident victim falls off their motorcycle. If a motorcyclist strikes the ground, they may suffer permanent injuries and sometimes fatalities.

Some of the most common accident-related injuries that motorcyclists suffer include:

Upon suffering any of these injuries in a motorcycle accident, you should concentrate on obtaining the medical treatment that you need as quickly as possible.

Additionally, consult a knowledgeable motorcycle accident lawyer in your area right away. Your attorney can present all of your legal options in clear terms and execute the appropriate option for your case and circumstances.

Recoverable Third-party Motorcycle Accident Damages

In addition to recovering monetary compensation for property damage after a motorcycle accident, accident victims who file a third-party claim may recover additional compensation for their bodily injuries and related losses.

First, accident victims may pursue monetary compensation for their related past and future medical expenses and loss of earning capacity or income.

Additionally, injured motorcycle accident victims may pursue compensation for their mental distress, physical pain and suffering, loss of use of a body part, lost quality of life, permanent disability or disfigurement, long-term or lifetime care costs, loss of spousal consortium and companionship, and inconvenience.

A skilled motorcycle accident attorney in your area can determine the likely settlement, verdict, or arbitration value of your case and do everything possible to maximize the monetary compensation you receive for your injuries.

Speak with a Skilled Motorcycle Accident Lawyer in Your Area Today

Tatiana Boohoff - Attorney for Motorcycle Accident
Tatiana Boohoff, Motorcycle Accident Lawyer

Suppose you incurred property damage and/or physical injuries in a recent motorcycle accident that someone else caused. In that case, you need to consult with a motorcycle accident lawyer in your area as quickly as possible to go over your legal options.

Under the statute of limitations, accident victims have a short amount of time in which to make a personal injury claim or file a lawsuit. Therefore, you need to act quickly.

An experienced personal injury attorney in your jurisdiction can evaluate your claim and pursue the compensation you need for your accident-related property damage and physical injuries.

November 22, 2023
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