Does the salvage value of a total loss vehicle belong to the owner or the insurance company?
2 Answers
In general, the salvage value of a total loss vehicle belongs to the insurance company; otherwise, the insurance company will deduct the salvage value when compensating. The insurer obtains ownership of the insured vehicle's salvage value under the following two circumstances: In the case of full insurance: After the insurance incident occurs, the insurer pays the full insurance amount, and the entire value of the damaged insured property belongs to the insurer. In the case of insufficient insurance amount: When the insurance amount is lower than the insurance value, the insurer obtains partial rights to the damaged insured property based on the ratio of the insurance amount to the insurance value. Therefore, it is reasonable for the insurance company to assign the salvage value to the vehicle owner. However, if the owner disputes the amount of the salvage value, they can negotiate with the insurance company.
When my car was declared a total loss, the insurance company directly took the salvage value because the contract stated that ownership would transfer to them after the claim. Reflecting on my own experience, after that accident, the car couldn’t be repaired. They assessed the compensation, paid me, and then towed the car away to auction the salvage. Actually, this is quite common and saved me the hassle of dealing with the wreck afterward. Key points: Total loss is determined by whether the repair cost exceeds the market value—if not, it’s not considered a total loss; salvage ownership affects the claim amount—if the car’s residual value is high, the payout might be lower. It’s difficult for owners to retain the salvage unless under special circumstances, such as rare cars, but in most cases, it’s best to let the insurer handle it. It’s advised to take photos promptly after an accident for evidence and review the policy details to avoid disputes.
