Knowing what it means when you total your car is important. It can help ensure the insurance company gives you a fair settlement for your damaged vehicle. You total your car when it is so damaged in an accident that the insurer concludes it’s a total loss.
Typically, an insurance company will total a vehicle when it would cost the insurance company more, or about the same, to fix the car than replace it.
The Process of Totaling Your Car
When you are in an accident, and your vehicle is damaged, the insurance company responsible for the loss will investigate and decide what to do with the car. This could be your insurance company if the accident was your fault. It may also be the other party’s insurer if the accident was not your fault.
Part of the insurance company investigation is determining how much your car is worth or its fair market value. This investigation also involves getting estimates to repair your car. Based on these two figures, the insurance company decides whether to pay for your vehicle repairs. They may pay you a settlement amount that is equal to the fair market value of your vehicle instead.
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Repairing Instead of Replacing Your Car
Even if the insurance company says that your car is totaled, you can decide to just get your car repaired instead. You can tell the insurance company if you want to do this. The insurance company will then deduct the vehicle’s salvage value from the insurance settlement amount that it pays you.
Defining Salvage Vehicles
Texas Transportation Code § 501.091(15) defines a “salvage motor vehicle” as any motor vehicle with a major component that is damaged or missing. The law further specifies that this damage makes it cost more to repair the vehicle than it is worth. In determining whether to total a vehicle, an insurance company will compare:
- The costs of repairing the vehicle, and
- The actual cash or market value of the vehicle
However, an insurance company may total a car even in some cases where its value is more than the cost of repairs. The Texas Transportation Code provides a guideline for insurance companies to decide what it means when you total your car. It is not a requirement that the insurer uses these guidelines, though.
Getting a Salvage Title
If your vehicle is in bad shape and meets the definition of a salvage vehicle, however, you will have to get a salvage title from the Texas Department of Motor Vehicles (DMV). Once your car is repaired or rebuilt, you can get it inspected to get a salvage title. If you have a salvage title for your car, even if it has been completely fixed, you might have trouble selling or even getting insurance for it in the future.
Proving How Much Your Car Is Worth
Insurance companies use different sources to determine whether your car is totaled. You can ask the insurance company what sources they used to place a value on your vehicle. If you do not agree with what the insurance company says your car is worth, you can prove that your car is worth more.
According to the Texas Department of Insurance, you will need evidence showing that your car is worth more than the insurance company is willing to pay. You can use this evidence to negotiate for the settlement you get.
By doing some simple research, you may get the insurance company to place a higher value on your car. Here are some different ways to prove how much your car is worth:
- Get written estimates from used car dealers about the value of your vehicle
- Look at sales ads online or in newspapers as a comparison to your vehicle
- Provide documentation of any special, upgraded, or custom features on your vehicle
- Look up the Kelley Blue Book value of your vehicle, which is a source that many people use to value used vehicles
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Totaling Your Car Is Not the End of Your Story; You Have Options
Understanding what it means when you total your car is one small part of getting compensation for your losses after a vehicle accident. You could be entitled to get compensation to repair or replace your vehicle.
This will depend on if you have totaled your car according to the insurance company. However, you also might be able to collect additional damages from the accident with the help of your lawyer.
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Get Help with Your Car Accident Case Today
Call Loncar Lyon Jenkins today at (877) 239-4878 for a free case review. We can investigate your case. Our team will determine whether you have a legal claim against any parties potentially at fault for the accident.
You may be able to file a claim for damages to your vehicle. Bodily injuries and other losses that you suffered in the accident are also compensable.