WHEN THE INSURANCE COMPANY SAYS YOUR CAR IS TOTALED
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When the Insurance Company Says Your Car Is Totaled: What Accident Victims Need to Know
After a serious car accident, hearing that your vehicle has been declared a “total loss” can create another layer of stress. You may still owe money on the vehicle, need transportation for work, and be dealing with injuries at the same time.
For accident victims in Cypress, Tomball, and Northwest Houston, understanding what a total-loss determination actually means can help you avoid accepting less than you may be entitled to receive.
What Does “Totaled” Actually Mean?
A totaled vehicle does not necessarily mean the car is impossible to repair. An insurance company generally declares a vehicle a total loss when the cost of repairing the damage reaches a certain percentage of the vehicle’s actual cash value.
In Texas, insurers also have to consider state requirements governing when a badly damaged vehicle qualifies as salvage.
The important point is that the insurance company’s decision is primarily an economic calculation.
How Does the Insurance Company Determine What Your Car Is Worth?
Once your vehicle is declared a total loss, the insurer will typically calculate its actual cash value immediately before the collision.
Factors may include:
Make, model, and year
Mileage
Vehicle condition
Optional equipment and upgrades
Comparable vehicles in the local market
Prior damage
Do not assume the insurance company’s first valuation is automatically accurate.
If comparable vehicles have been selected incorrectly or important features have been omitted, the proposed settlement may undervalue your vehicle.
What If You Still Owe Money on the Car?
This can become particularly frustrating.
Your auto loan does not disappear because the vehicle was totaled. If the insurance settlement is less than the remaining loan balance, you may still owe the lender the difference.
Gap insurance may cover some or all of that shortfall depending on the policy.
For example, if you owe $25,000 but the insurer values the vehicle at $21,000, there could potentially be a $4,000 difference remaining after the insurance payment.
Can You Challenge the Insurance Company's Valuation?
Yes.
You can request information explaining how the insurer calculated the vehicle's value and review the comparable vehicles used in the valuation.
Look for discrepancies involving mileage, trim level, condition, options, and local market pricing.
Keeping maintenance records, photographs, receipts for recent improvements, and information about comparable vehicles for sale in the Houston area can also help support a dispute over value.
A Total-Loss Claim Is Separate From Your Injury Claim
One of the most important distinctions after a collision is that resolving the property damage does not necessarily resolve your personal injury claim.
If another driver caused the crash, you may have separate claims involving medical expenses, lost income, pain and suffering, and other accident-related damages.
Be particularly careful with documents containing broad release language. Before signing something that appears to settle more than the vehicle damage, make sure you understand exactly which claims you are releasing.
Injured in a Crash in Northwest Houston?
A totaled vehicle can be replaced. The financial and physical consequences of a serious accident can be much harder to resolve.
If you were injured in a collision in Cypress, Tomball, along Highway 290, or elsewhere in Northwest Houston, the Law Office of Shaw Clifford can help you understand your options and deal with the insurance companies while you focus on recovery.
Contact Shaw Clifford to discuss your accident and determine what compensation may be available under Texas law.
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