If you’re involved in a car accident, you’re probably hoping that your insurer will pay to restore your precious ride back to its pre-crash glory. But, it doesn’t always work that way. Sometimes, the unthinkable happens: your car is deemed a “total loss” or, in simpler terms, “totaled.”
What does “totaled” mean, you ask? It’s when the repair cost for your vehicle exceeds its worth. Some states even have laws making insurers total a car once damages hit a certain value percentage.
The experience of having your car totaled can be quite disheartening, and navigating through the reimbursement process could be quite a whirlwind. Fear not! Let us enlighten you on what happens when your car is totaled in an accident and provide some valuable tips to secure the right value for your claim.
How the process works
When your auto insurance concludes that your car is totaled, it won’t be repaired and returned back to you. Instead, you receive a payout of the actual cash value (ACV) minus any applicable deductible, while your insurer acquires ownership of the damaged vehicle. Many call this process a “forced sale,” as your insurance company essentially buys your wrecked car instead of fixing it.
To initiate this procedure, gather these essential documents:
1. Vehicle bill of sale (or sales receipt)
2. Odometer statement
3. Certificate of title
4. Power of attorney
The bill of sale and odometer statement helps determine the payout for your claim, while you’ll need the certificate of title to transfer ownership of the vehicle to your insurer.
Though optional, appointing a power of attorney allows your insurance provider to handle the title transfer independently, so you need not fret about playing mediator between the Texas Department of Motor Vehicles (DMV) and your carrier during any bureaucratic bumps along the way.
Determining your vehicle’s worth
Ever wondered how to figure out the value of your car after it’s been totaled? Well, it depends on a few factors. Usually, your insurance company will calculate the Actual Cash Value (ACV) by assessing your vehicle’s pre-accident condition and comparing it to similar used vehicles in your area. Keep in mind, this is different from the book value, which might not truly represent current market rates.
To get a better understanding of this process, it’s a good idea to have a chat with your insurer. Make sure they’re comparing apples to apples – cars of the same model, similar features, and comparable mileage – to get the most precise valuation for your ride.
Did you recently put some serious money into your car for repairs or upgrades? If you’ve done something significant like replacing the transmission or opting for a new paint job, inform your claims adjuster and have those receipts handy. They may see the value in what you’ve done, but if you feel their valuation isn’t fair, don’t be shy – speak up! Explain why you think the value should be higher. If you still can’t reach common ground and your policy includes an appraisal clause, consider using it.
Invoking the appraisal clause means that both you and your insurer will get independent appraisers to evaluate the actual cash value of your vehicle. If they can’t agree on a number after providing their individual judgments, a third appraiser will step in as an umpire to help settle the dispute.
Optional GAP insurance
Once your car’s worth is determined, you’ll get your settlement either via a check or through direct deposit into your bank account. Pretty simple, right?
But if you still have some debt on your car, things get a bit interesting. A check might have both your and your lender’s name on it, so you might need to give the green light for your insurance company to pay the lender directly. If the insurance amount doesn’t cover all your debt, you’ll have to dig into your pocket to settle the remaining amount.
Except… if you’ve got this fantastic thing called Guaranteed Asset Protection (GAP) coverage! With GAP by your side, you don’t need to worry about the difference between your outstanding debt and insurance payout. Just remember that GAP may come with some extra costs when obtaining the loan and you’ll still be responsible for paying any deductible.
But wait, there’s more! Your policy may include auto replacement assistance, allowing you to swap out your ride for a spiffy upgrade or at least something similar.
And here’s the cherry on top: having an accident won’t affect your credit score! But watch out—unpaid loans certainly will. So do yourself a favor and make sure that auto loan gets squared away.
If you think your car has been totaled in a motor vehicle accident, contact us today
Named one of the “Best Car Accident Lawyers in Dallas” by Expertise.com, Brian Brunson is Texas personal injury lawyer who is dedicated to helping clients who have suffered a car, truck, or motorcycle injury through the negligent or wrongful conduct of other drivers. In addition, his professionalism is unmatched and his 5-star, A+ rating by the Better Business Bureau and client reviews speak for themselves.
We proudly serve the Dallas-Fort Worth metroplex and surrounding areas, our office supports the legal needs of a wide variety of clients. Let the Law Office of Brian Brunson be your advocate in your time of need and help you put your life back together. If we can’t win or settle your case, you don’t pay a dime! We know it can be daunting to take that first step after you’ve been hurt. Contact Brian Brunson today via email or call us toll-free at 1-844-41-WRECK. We can help, when no one else will.