If your car is deemed a total loss following an accident, you likely have several questions about what comes next. At The Stewart Law Firm, we have an excellent track record of assisting those who have experienced severe automobile accidents.
Stephen Stewart is an Austin-based seasoned attorney focusing on cases involving totaled vehicles, ensuring his clients receive the compensation they are entitled to. In this blog, we offer crucial information and outline the steps you may want to follow if your car has been totaled in Texas.
What Counts as a “Totaled” Vehicle in Texas?
In Texas, a car is considered ‘totaled’ by insurance companies when the cost of repairing the vehicle equals or exceeds its value. Occasionally, an insurer may decide to total a car even if repair costs are slightly lower than the vehicle’s overall value. It’s a good idea to ask your insurance provider about the criteria and sources they use to determine your car’s value.
Is It Possible to Repair and Keep My Totaled Car in Texas?
If you prefer to keep and repair your car, notify your insurer promptly. They will deduct the car’s salvage value from your settlement amount. Remember, repaired cars often receive a salvage title, which may affect resale and insurability.
What is An Actual Cash Value in Texas?
In Texas, Actual Cash Value (ACV) refers to the market value of a vehicle at the time of an accident, factoring in depreciation. It represents the amount for which you could sell the car in its current condition just prior to the accident.
Here’s a breakdown of how ACV is calculated and applied in insurance claims:
1. Calculation
The ACV is determined by starting with the original purchase price of the vehicle and then subtracting depreciation. Depreciation is calculated based on factors concerning the vehicle, such as the following:
- Age
- Mileage
- Overall Vehicle Condition
- Car’s Make
- Model
- Year
- Current Market trends
- Pre-accident Condition
- Overall Vehicle Condition
2. Application in Insurance Claims
In the context of an insurance claim, if a car is damaged, the insurer will compare the cost of repairs to the ACV. If the repair costs exceed a certain percentage of the ACV, the vehicle is typically declared a total loss.
In Texas, the threshold for declaring a car a total loss commonly stands at 100% of the ACV, though some insurance policies might set this threshold at 70% to 80%.
Understanding ACV is crucial for vehicle owners dealing with insurance claims following a car accident, whether due to drunk driving or distracted driving, as it affects the compensation they might receive.
What Can I Do If I Disagree With the Car's Valued Amount?
If you believe your car is worth more than the assessed value:
Will I Get Compensated if My Car is Totaled in Texas?
Understanding your compensation rights in Texas when your car is totaled depends on several factors:
Assessing Fault in the Accident
- Not At-Fault: If another driver is at fault, you can claim compensation through the other driver’s liability insurance.
- At-Fault: If you are at fault, your collision insurance coverage may compensate you, provided you make a claim.
Texas Modified Comparative Rule
Under Texas’ modified comparative fault rule, the amount of damages a plaintiff can receive may be reduced or even denied based on what percentage of fault the jury assigns to each party.
Compensation Details
- Insurance Payout: You’ll receive the Actual Cash Value (ACV) of your car, less any deductible, from your insurance company. The insurance payout is first used to clear any outstanding loan balance on the vehicle.
- Loan Surplus or Shortfall:
- If the payout exceeds the loan balance, the surplus is paid to you.
- If the payout is less than the loan balance, you remain liable for the difference.
Consulting a lawyer can be beneficial, especially in complex scenarios where the fault is disputed, or insurance offers may not cover all losses. A lawyer can help navigate the claims process and negotiate with insurance companies to secure a fair settlement.
Steps to Take If Your Car is Totaled in Texas
Handling a totaled vehicle in Texas requires a unique approach compared to other insurance claims. Consider following these six steps if your car is declared a total loss.
Important Note: Before proceeding, make sure all individuals involved in the accident are safe, and the vehicle is moved off the road if possible. If you have just been in a fatal car accident, immediately call 911, regardless of your vehicle’s condition.
1. Report the Accident
Immediately contact your insurance company to report the accident. This initiates the claims process. It’s also good practice to notify the other driver’s insurance if they were at fault, as their liability insurance may cover your losses.
2. Assess the Damage
Your insurance company will send an adjuster to evaluate your car and determine if it’s a total loss. They will calculate the actual cash value (ACV) based on various internal sources and formulas.
3. Understand Your Payout
Review your insurance policy to understand the coverage details and applicable deductible. If the ACV offered by your insurance seems low, you can negotiate by providing evidence of your car’s higher value through quotes or sales prices of similar vehicles.
4. Handling the Vehicle
If the car is deemed a total loss and you accept the insurance payout, you’ll need to sign over the title to the insurance company. Remember to remove all personal items from the vehicle.
5. Financial Considerations
If you have a loan or lease, coordinate with your lender to address any remaining balance. If applicable, gap insurance can cover the difference between the insurance payout and what you still owe.
6. Replace Your Vehicle
Use the insurance settlement to help fund the purchase of a new or used vehicle, keeping your budget and needs in mind.
Being involved in an accident and totaling your car is undoubtedly challenging. However, understanding the process and knowing what steps to take can help you manage the situation more effectively and get back on the road sooner.
Contact Us at The Stewart Law Firm Today!
If your vehicle has been totaled in Texas, knowing what to do and securing the right legal support is vital. At The Stewart Law Firm, we understand the emotional and financial toll this can take. Our compassionate team in Austin is ready to guide you through the legal process with the care and advocacy you deserve.
Contact us at (512) 326-3200 to schedule an initial consultation where we can start working towards your recovery and justice.
