For Consumers

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

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

How are pro-rated taxes and fees calculated?

Taxes and fees are calculated on a pro-rata basis so 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 

Total: $16,881.75

Example of annual government taxes and fees subject to pro-rating based on the unused portion of the license tab

Annual government fees and taxes example

Type of fee

Fee

RTA (www.dol.wa.gov) (King, Snohomish and Pierce counties only) must be calculated individually

$20.00

Licensed fee

$30.00

Weight-based fee (varies by vehicle weight)

$10.00

Other regional fees (if any)

$0.00

Filing fee

$3.00

Subtotal for fees

$63.00

Actual cash value plus sales tax

$16,881.75

Total settlement value

$16,944.75

Example of how the salvage value is handled when you decide to keep your totaled car

Salvage value breakdown when you keep totaled car example

Payment breakdown

Costs

Total settlement value before deductions, if any

$16,944.75

Deductible, if any (collision deductibles)

$-500.00

Total payment

$16,444

Salvage value

$-275.00

Total payment, if owner keeps car

$16,169.75