What Does the Insurance Company Pay on a Total Loss Claim?

Our lawyers handle serious personal injury accident claims. Although we do not charge a fee for handling property damage claims for our injured clients, we almost invariably are drawn into property damage claims, many of which involve total loss to the vehicle.

What exactly is the insurance company obligated to pay for a total vehicle loss in Maryland, i.e., when the car is totaled?

Maryland Insurance Regulation COMAR 31.15.12.04, titled “Cash Settlement” is on point. It requires that:

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:

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.

Unlike personal injury claims where insurance companies are remarkably prone to unreasonable positions as to value, most insurance companies play the value of a totaled car or truck pretty straight and pay the bluebook and associated costs. Do they all?