How insurers calculate taxes and fees when your car's totaled

What taxes and fees are pro-rated in a total loss settlement?

Regional Transit Authority (RTA) tax (www.dol.wa.gov), license fee, weight-based fee, other regional fees (if any) and the filing fee.

How are pro-rated taxes and fees calculated?

Taxes and fees are calculated on a pro-rata basis so that the vehicle owner is compensated for the “unused” portion of the annual taxes and fees.

Example: A car’s annual renewal occurred in March. The car is totaled in June. (This means three months of the annual taxes and fees have been used.)

The annual RTA tax is $120 per year. The insurance company owes nine months or 9/12th of the RTA tax.

$120/12 months = $10/month

$10 X 9 months = $90 (the pro-rated fee)

How is salvage value handled when you decide to keep your totaled car?

After the actual cash value, sales tax and applicable pro-rated taxes and fees are added together, the insurance company deducts the salvage value from the total amount.

Example:

Actual cash value: $15,375

Sales-tax rate (Seattle 9.8%): $1,506.75 

 

Example of annual government taxes and fees subject to pro-rating based on the unused portion of the license tab
Type of fee Fee
RTA (www.dol.wa.gov) (King, Snohomish and Pierce counties only) must be calculated individually $20
License fee $30
Weight-based fee (varies by vehicle weight) $10
Other regional fees (if any) $0
Filing fee $3

 

Example of how the salvage value is handled when you decide to keep your totaled car
Payment breakdown Costs
Total settlement value before deductions, if any $16,944.75
Deductible, if any (collision deductible) $-500
Total payment $16,444.75
Salvage value $-275
Total payment, if owner keeps car $16,169.75

Updated 03/27/2014

See also

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