Insurance companies are supposed to pay for repairs to your vehicle after a crash, but what happens if they declare your vehicle a “total loss” instead? A Corpus Christi, Texas auto accident lawyer can help you learn more about what to expect so that you can get the payout you deserve.
When Is a Car Considered a Total Loss?
A car is considered a total loss when it’s going to cost more to repair it than it is actually worth. An insurer looks at the “actual cash value” of the vehicle to determine this, not what you owe on your car loan. So if the car is worth $7,000 and repairs would cost $9,000, that’s a total loss.
Who Pays Out For a Car That’s a Total Loss?
It depends on who was to blame for the accident that caused the total loss. You could be covered through:
Another driver’s liability insurance: Every driver has to carry liability insurance in case they cause an accident or damage. If someone else is to blame for your accident, their liability coverage should pay for the total loss of your vehicle.
Your collision coverage: If your car was wrecked in a crash and the accident isn’t blamed on another driver, your own coverage needs to pay for it. Collision is an optional type of coverage though, so not every driver has it when they need it.
Your comprehensive coverage: This coverage can pay out if something other than a crash caused the damage to your vehicle. Good examples would be fire, theft, or extreme weather. Like collision, comprehensive is optional on your policy.
What If I Still Owe Money On My Car?
As we mentioned, what you owe on the car isn’t a factor to the insurance company. They are concerned with the actual cash value of the car. Unfortunately, this can mean that you could end up still owing money on your loan after a car is declared a total loss.
Let’s use the example above again. The actual cash value of your car is $7,000 and it’s declared a total loss. You owe $10,000 on your loan though. If you don’t have gap insurance, you have to pay that $3,000 back to your lender. This is why it’s a good idea to keep gap coverage as long as you are paying off your vehicle.
When Do I Need a Lawyer?
A lawyer can help with these claims in a few ways. You may want to talk to one if:
- There’s debate over who is at fault
- You disagree with your insurer about whether the car should be considered a “total loss” or not
- There is disagreement about the estimated cost of repairs or the actual cash value of the car
Contact Our Law Firm
So if you need help getting paid for the total loss of your vehicle, contact Sahadi Legal Group. We can help you learn more about how insurance companies operate in situations like this. Then we’ll help you negotiate for the settlement that you deserve.
