Let’s say you were involved in a car accident that was not your fault and the insurance company is saying that your car is a “total loss.” What does that mean and what happens next? What happens if the insurance company wants to give you less for your car than you think it’s worth? In this article, we answer these common questions.
Texas is a fault state, so if the other driver was at-fault for the accident, the other driver’s insurance company will be the one that pays you. However, “how much” will they pay is the next question. It depends on the other driver’s policy limits. You see, insurance companies only pay up to a driver’s policy limits, so if the other driver is underinsured, the next place to look for additional compensation is your collision coverage, if it’s part of your policy.
So, Your Vehicle is a ‘Total Loss’
Your car was totaled in the accident. After looking at the mangled mess, you were not only happy to walk away alive, but you knew nothing could be done to repair your vehicle; it was beyond repair. The insurer says your vehicle is a “total loss” and for good reason. Total loss means it’s not worth repairing the vehicle because the cost of repairs would exceed a certain percentage of the vehicle’s current market value. Usually, the benchmark is 80%.
Will you get what you paid for the vehicle? Will you get what you owe on the auto loan? Unfortunately, insurance companies only pay plaintiffs for the fair market value of their vehicles. Even if you owed say, $20,000 on your auto loan, but the fair market value of your vehicle is $12,000, the insurance company is only required to pay you the $12,000. That means you’re on the hook for the remaining $8,000 on the auto loan. This is where Gap Coverage comes in handy.
“What if I believe the insurer is trying to give me less than what my car is worth?” In that case, your only options are to:
- Accept the offer
- Try to negotiate with the insurance company
- File a lawsuit against the insurer
The best way to protect your interests and your wallet in a car accident claim is to hire an attorney from our firm to represent you. To get started, contact The Zendeh Del Law Frm, PLLC and schedule your initial consultation.
