What To Do if an Insurer Won’t Pay for a Totaled Car

You should always consider yourself fortunate if you get into a car accident and don’t suffer any severe physical injuries. Of course, dealing with car damage is not anyone’s idea of fun. When the damage is significant enough to involve an insurance claim, an adjuster will be assigned to determine the extent of your damages.

That adjuster might determine that your car is deemed totaled. What happens if an insurer won’t pay for a totaled car? That is when you need to involve an auto insurance dispute lawyer like you’ll find at the Law Office of Matthew L. Sharp.

We have a lot of experience taking on insurance companies that act in bad faith.

Before you decide to move forward with a bad faith insurance claim, it will help you understand what a totaled car assessment is all about and your options if your insurer won’t offer a fair settlement.

What Is a Totaled Car?

Every state has different definitions for what is considered a totaled car. In Nevada, a car is deemed totaled if the cost to repair the car would exceed that car’s fair market value by 65%. In other words, if your car is valued at $5,000 but costs $12,000 to repair, it would be considered totaled.

If the cost of your repairs is less than 65% of the value, you will be offered the money to cover the repairs.

The fair market value is based on your car’s value at the time of the accident. Most insurance companies will use resources such as Kelley Blue Book to determine that value. The older the vehicle, the more it depreciates.

It’s extremely rare that a car owner would ever get the amount they paid for the car unless the accident happened close to the purchase date.

Payments for a Totaled Car

An insurance company that acts in good faith will present you with a settlement offer for your totaled car based on their estimate. Whoever gets that money depends on the ownership status of your vehicle.

Financed Car

If you get into an accident while you’re still paying off the loan, the finance company still maintains an interest in the car. In other words, you owe them for the loan, whether you can drive the car or not.

In that scenario, your insurance company will send the settlement to the insurance company to pay off the loan. Whatever funds are left over will go to you. If you owe more on the loan than what your car was worth, you would be responsible for paying the difference. The exception would be if you have GAP insurance.

That would cover the shortfall so that you wouldn’t be out of pocket. However, you wouldn’t get any additional funds.

Owned Car

If you own your car outright without any liens, you’ll receive the total amount of the settlement. You could use those funds as a down payment on another car.

When You Disagree with the Insurance Company

What if the settlement amount that your insurance company is offering is not a number you agree with?

First of all, if you cash any check from the insurance company, they will consider the case closed. You won’t be able to ask for more funds. If there is a dispute, you have the following options:

Getting a Second Appraisal

After the insurance company offers the value of your totaled car, you are entitled to get your own appraisal. If your appraisal returns significantly higher, you can negotiate with the insurance company for a better settlement. This is an area where an experienced car accident attorney can be a big help. They can take on the negotiations on your behalf.

You can add additional documents to support your appraisals, such as receipts for recently purchased tires, brakes, or transmissions. Those would have added value to your car if you were to sell it.

Buying Back the Totaled Car

If the insurance company declares your car to be a total loss, you could buy it back at its salvage value. For example, the insurance company will offer you $10,000 for the value of the car.

However, its salvage value might only be $2,000. You can deduct that $2,000 off the settlement and take back ownership of the car to make your own repairs. The caution is getting into a situation where you end up paying more for the repairs. Again, the matter will be closed if you accept any offer from the insurance company.

When You Should File a Lawsuit

Getting into a dispute with an insurance company is going to delay your potential settlement and prevent you from moving on from the accident. That is why you need a strong advocate on your side, like you’ll find at the Law Office of Matthew L. Sharp. We can present evidence that backs up a fair assessment to the insurance company.

Call to set up a consultation to discuss your issues with your insurance company.