Total loss laws in New York

When is a car totaled in New York?

Short answer: New York uses 75% of the car's value as a salvage-title test (11 NYCRR 216.7(b)(16)). It does not stop the insurer from totaling a car below that.

Two linked rules, both for vehicles 8 model years old or newer. DMV: the title must carry the 'REBUILT SALVAGE' brand if, among other triggers, the cost of parts and labor to restore the vehicle exceeds 75% of its retail value at the time of loss as set out in a current nationally recognized compilation of retail values (15 NYCRR 20.20(c)(1)(ii)). DFS: if the insurer determines repair cost exceeds 75% of the vehicle's actual cash value and does not take the car as salvage, it must require the owner to give it the title, must withhold at least 50% of the claim payment (after the deductible) until it receives the title, and must send the title to DMV for branding within 10 business days (11 NYCRR 216.7(b)(16)). This is a salvage-branding trigger, not a cap on when an insurer may total a car.

Source: 11 NYCRR 216.7(b)(16); 15 NYCRR 20.20(c)(1)(ii)

Many online tables mix up title-branding rules with the insurer's own decision. Compare the total loss threshold in every state.

Does insurance pay sales tax on a total loss in New York?

Short answer: Yes. New York requires a cash settlement for a total loss on your own policy to include sales tax (11 NYCRR 216.6(b)). The rule does not clearly require title or registration fees.

Unless the law or policy defines it otherwise, 'actual cash value' is the lesser of the cost to repair or to replace with a substantially identical item, and it 'shall include all monies paid or payable as sales taxes' on the item repaired or replaced (11 NYCRR 216.6(b)). 216.7, which applies to collision and comprehensive claims, keeps the rest of Part 216 in force for those claims and excludes only 216.2(b)-(d), 216.6(c), (h) and 216.9, so 216.6(b) applies to first-party auto physical damage. Title and registration transfer fees are not addressed; a law-firm state summary (Matthiesen, Wickert & Lehrer) says they are not required. Whether these rules bind third-party property damage claims rests on a NY OGC opinion of May 1, 2002 as reported in that survey; we could not find the opinion itself.

Source: 11 NYCRR 216.6(b); 11 NYCRR 216.7 (preamble)

Tax on a replacement car in New York

4% state rate plus local rate (about 3%-4.75%) of the buyer's residence, plus 0.375% in the Metropolitan Commuter Transportation District. Combined rates typically 7%-8.875%.

Source: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/motor_vehicles_and_boats.htm

See the sales tax and fee rule in every state.

How must the insurer value your car in New York?

The insurer's minimum cash offer must be one of the following. (i) The average retail value of a substantially similar vehicle in two approved valuation manuals. Options a manual leaves out must be valued separately, and only documented dealer preparation charges of up to $100 may be deducted. (ii) A quote for a substantially similar vehicle from a qualified dealer within 25 miles. That vehicle must stay available for 3 calendar days after the insured is notified by certified mail or a recorded call, and the dealer, VIN, stock number, mileage and options must be kept in the file. (iii) A computerized database approved by the superintendent. It must cover at least 85% of makes and models for 15 years, use licensed-dealer data from the 100-mile local market area, and use the last 90 days of sales plus available inventory. (v) If none of these works, the best available method, explained to the insured. There is also a cap: for a car bought from a dealer within 180 days before the loss, the offer may be limited to the purchase price plus documented improvements, minus the deductible ((iv)). This cap does not apply to private sales or gifts. 'Substantially similar' means same make, model, year and condition, with the major options, and mileage no more than 4,000 miles or 10% above the insured car's, whichever is greater. The insurer must give the insured a detailed copy of its total-loss calculation no later than payment. On request, it must name a salvage dealer who will pay the amount it deducted for salvage. Current-model-year cars are valued at the new-car price minus a per-mile depreciation schedule.

Source: 11 NYCRR 216.7(a)(4), (a)(10), (c)(1)(i)-(v), (c)(2)-(6)

To check the numbers in your own report, read the CCC valuation report, line by line and how projected sold and typical negotiation deductions work.

How long does the insurer have to pay a total loss in New York?

Short answer: Under New York rules, payment is due within 5 business days after you accept (11 NYCRR 216.4, 216.5, 216.6(e)-(f), 216.7(b)(1)). A settlement offer is due within 6 business days after notice (11 for a total loss).

Acknowledge a claim within 15 business days, and reply to other pertinent communications within 15 business days (11 NYCRR 216.4). Begin investigating and list the forms needed within 15 business days (216.5). For auto physical damage, the insurer has 6 business days after notice to inspect and make a good-faith offer; for a total loss it gets 5 more business days (216.7(b)(1), (c)(7)). For an unrecovered theft, the offer is due by the 25th calendar day after notice if all requested information was provided. If any part of the claim is unresolved after 30 calendar days, the insurer must send a written explanation, then another every 30 days (216.7(d)(2)). Payment must be mailed or hand-delivered within 5 business days after the insured accepts the offer, or 3 business days after receipt of a completed proof of loss (216.7(b)(17)); generally, agreed amounts must be paid within 5 business days (216.6(f)). Undisputed parts must be paid even while other parts are disputed (216.6(e)).

Source: 11 NYCRR 216.4, 216.5, 216.6(e)-(f), 216.7(b)(1), (b)(17), (c)(7), (d)(2)

Compare claim deadlines in every state.

Can you negotiate a total loss offer in New York?

Short answer: Yes. You can reject the offer in writing, ask for the full valuation report and the reason for each deduction, and send your own evidence. New York also lets you ask the insurer to reopen the claim within 35 calendar days after the payment is mailed if you cannot buy a comparable car for the amount paid (11 NYCRR 216.7(c)(4)). The New York State Department of Financial Services takes complaints about claim handling.

Yes. Right of recourse: if, within 35 calendar days after the payment is mailed, you notify the insurer in writing that you cannot buy a comparable vehicle for its value, it must reopen the claim. It must then either offer enough to buy a specific substantially similar vehicle, or pay the difference for one you locate (11 NYCRR 216.7(c)(4)). This right does not apply if the insurer already identified an available substantially similar vehicle for at least 3 days (216.7(c)(5)). Rejection letters must carry the DFS complaint notice (216.7(d)(3)). You can also use the policy's appraisal clause, file a DFS complaint, and sue in small claims or civil court.

1. Ask the adjuster in writing for the complete valuation report and the list of comparable vehicles.
2. Check it line by line: negotiation deductions, condition ratings, comparables, tax and fees. How to read the report.
3. Send a written rebuttal with your evidence and a specific number. How to dispute a total loss valuation.
4. If you still disagree on a claim under your own policy, consider the appraisal clause.
5. If the insurer does not follow the rules above, file a complaint with the state.

How long do you have to sue over a totaled car in New York?

Short answer: Generally 3 years to sue for damage to your car (N.Y. CPLR 214(4)). Your policy may set a shorter limit for suing your own insurer.

Property damage claims in New York generally must be filed within 3 years. Your policy may set a shorter deadline for suing your own insurer; check its "legal action against us" clause.

Source: N.Y. CPLR 214(4) (action to recover damages for an injury to property)

How to file an insurance complaint in New York

Short answer: File a free complaint with the New York State Department of Financial Services online. It asks the insurer for a written response, but it cannot set the amount you are owed.