If you were in a serious car accident and your motor vehicle sustained severe damage, there is a high possibility that your insurance company will decide to total your car. While this can happen to anyone, a lot of people do not have their car loan paid off before an accident. And sometimes people are upside down on their cars, meaning that they owe more than the car is worth. Insurance companies do not and will not pay more than the car is worth.
Insurance companies are only obligated to pay for the current market value of your car (see kbb.com to check the numbers), meaning that the insurance company will pay the actual value of the car at the time of the accident. If your car loan is larger than what your car is worth at the time of the accident, you could be left still paying for your totaled car unless you have a coverage called gap insurance. If you have gap insurance, then that insurance company will cover the balance of your loan. You still will not have money for putting down on a new car, but at least you will not owe money on a car that you no longer have.
If you were involved in an accident because of someone else’s negligence and carelessness, you may be entitled to compensation from that person’s insurance company for property damage and personal injury, as well as obtaining coverage from your own insurance company to cover any losses not covered by the at fault party’s insurance company. To ensure that you receive the proper amount of coverage and that your rights are respected, seek guidance from an experienced personal injury attorney like Kim Welch Law. Kim Welch Law provides advice, guidance, and assistance for injury clients who also have a property damage claim at no charge for the property damage portion of the claim.
When Is a Car Considered Totaled in Las Vegas, Nevada and surrounding areas?
A motor vehicle is totaled when an insurance company deems that the cost to repair the car to drivable conditions is higher than the current value. For each state, there is a threshold to which a vehicle is considered a total loss. In Las Vegas, Nevada and surrounding areas, the law requires that the damage reach 65% of the car’s current value for it to be totaled.
Nevada law establishes a clear threshold for when a vehicle is considered a total loss. Under Nevada Revised Statutes (NRS) 487.790, a car is declared a total loss if the cost of repairs exceeds 65% of its fair market value immediately before the damage occurred. This total loss threshold (TLT) is one of the lower thresholds in the country, meaning vehicles in Nevada are more likely to be deemed total losses compared to states with higher limits. The fair market value is typically determined using industry-standard valuation tools such as Kelley Blue Book, the National Automobile Dealers Association (NADA) guide, or insurance company assessments. https://legalclarity.org/nevada-total-loss-threshold-when-is-a-car-declared-a-total-loss/
The actual cash value of the vehicle depends on the following factors:
- The age of the car
- The market value of the year, make, and model
- Condition of the car before the accident
- Mileage on the car
- The resale value of similar cars in the area
When the insurance company calculates the car’s value, they will run the numbers and decide if it is worth saving the vehicle. If not, then sadly, your car will be deemed a totaled loss. Each state varies as to what percentage of the value of your car that will deem it a total loss based on the total of damages, but for Nevada it is 65% as detailed above.
Owing on Your Auto Loan After Your Vehicle Is Totaled
In many cases, the current value of your car is less than when it was purchased. Along with interest rate and other factors, the amount that an insurance company will give you for the totaled car might not pay off the current auto loan. These are a few options and some advice for those who still have money left on their auto loan or are upside down and owe more than the car is worth:
Confirm Your Actual Cash Value by Checking the Value Yourself
When you still owe on your vehicle loan, checking your actual cash value is incredibly important. The insurance company will send an adjuster to determine the value, but double-checking through sites like Kelly Blue Book and finding out the dealer trade-in amount can give you a relatively accurate estimate of your actual cash value.
Continue Your Car Loan Payments
While going through the insurance claim process, you should continue to pay your car loan payments. The balance on your loan not paid off by the actual cash value or other claims like gap insurance will be your responsibility to pay for or finance the purchase of a new one.
Contact a Personal Injury Lawyer
When faced with complex legal decisions and negotiations with insurance settlements, a personal injury lawyer can assist with collecting evidence, advocating for your rights, and working so you are properly represented. If you are in an accident resulting from someone else’s carelessness, a personal injury lawyer may assist with making sure you are correctly receiving just and fair compensation.
Discover Experienced Personal Injury Lawyers at Kim Welch Law
A lot goes into handling car accident claims and sustaining damage on your motor vehicle because of another individual’s negligence is stressful and frustrating. At Kim Welch Law, we provide our clients with knowledge gained from years of combined experience, including working for the insurance industry for over a decade, to guide those that have been in a car accident through their personal injury and property damage claims.
To learn more about our practice areas or schedule a free consultation with one of our personal injury lawyers, visit kimwelchlaw.com and fill out our online contact form or call (888) 590-5510.
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