Getting in a car accident is traumatic, especially when your collision results in injuries and property damage. Dealing with the insurance company adds another layer of stress to your recovery process. The goal of the insurance is to pay out as little compensation as possible.
One of the ways insurance companies pay you less than you deserve is by declaring your vehicle a total loss when it is clearly not damaged beyond repair. Understanding how the total loss threshold in Texas works can help you obtain the most satisfactory results in your motor vehicle accident claim. Our Pearland car accident lawyers at J.D. Silva & Associates can help you understand the claims process and get the compensation you deserve after your car accident.
Texas Total Loss Threshold
A total loss threshold is when a motor vehicle’s loss value reaches a certain percentage of its market value. In other words, it is the point where it is more costly to repair your damaged vehicle than it is to replace it. A vehicle’s total loss threshold can be calculated by a simple percentage threshold or total loss formula.
Each state has a formula or specific percentage at which it declares your vehicle a total loss. Texas uses a simple percentage threshold. The total loss threshold in Texas is 100%, meaning that a vehicle must be declared totaled if the cost of repairing it is more than 100% of its actual cash value (ACV).
According to the Texas Administrative Code, the actual cash value of your vehicle is determined as of your auto accident date. It is based on the retail value of your vehicle according to the National Automobile Dealers Association (NADA) guide or an equivalent used car guide, such as Kelley Blue Book. Your vehicle’s ACV is based on several factors, discussed below.
Considerations When Assessing Your Vehicle’s Actual Cash Value
Insurance companies consider certain factors when determining whether to declare your vehicle a total loss after a car accident. Typically, the company will send out an adjuster to inspect your vehicle. The adjuster will consider the following factors when evaluating your motor vehicle accident claim:
- Your vehicle’s make and model
- The age of your vehicle
- The mileage on your vehicle
- The general condition of your vehicle before and after the crash
- Any optional equipment with which your vehicle is equipped
- Previous accidents in which your vehicle has been involved
It is wise to have a general idea of your vehicle’s ACV prior to accepting any auto accident settlement offer from the insurance company. It is strongly recommended that you consult with a car accident lawyer in Pearland prior to speaking with an insurance adjuster. The personal injury attorneys at J.D. Silva & Associates are knowledgeable regarding the total loss threshold in Texas and can communicate and negotiate with the insurance company on your behalf.
Declaring Your Vehicle A Total Loss in Texas
In some collisions, it will be obvious that your vehicle is a total loss. However, sometimes a vehicle does not have to look like it has been damaged in an car accident to be considered totaled. For instance, if a vehicle is damaged in a flood, it may not have visible damage, but it can still be considered a total loss based on the extent of repairs needed to get it back on the road.
To qualify for a total loss settlement in Texas, there must be insurance coverage that will cover your loss in the event of an accident. The following coverages may be applicable to your auto accident:
- Comprehensive coverage: Applies to damage from vandalism or a weather-related accident
- Collision coverage: Applies to an accident for which you are at fault
- Liability coverage: Applies to an accident wherein another driver was liable
- Uninsured or underinsured coverage: Applies to an accident where the at-fault driver was not insured or does not have adequate coverage
Sometimes the total loss amount the insurance company offers you, based on your vehicle’s ACV and salvage value, is not enough to buy a replacement vehicle. This is often the case when you have a loan or lease on your vehicle. The insurance company will pay your finance or lease company what you owe them before paying you any leftover balance.
Negotiating a Texas Total Loss
While you may agree with the insurance adjuster’s assessment that your vehicle is a total loss, you also may not agree with their valuation. In some instances, you may believe your vehicle is worth more than what they purport. If this is the case after your car accident, you can negotiate with the insurance company if you are not satisfied with the amount offered for your vehicle.
To successfully negotiate with the insurance adjuster, you must demonstrate that the settlement amount they are offering you is not enough. There are certain factors you can use to support your claim that your vehicle is worth more than the insurance company is offering. For example, your vehicle may be worth more if it has optional features or upgrades, excellent maintenance history, and / or new tires.
Your best option for negotiating the value of your vehicle is by retaining a Pearland car accident attorney. Consulting with a lawyer can help you if the insurance company is offering you less than the cost of the damages you have suffered in your wreck. We can negotiate the value of your car to get you maximum compensation for your car accident lawsuit.
Options for When Your Texas Total Loss Payment is Not Enough
If the insurance company does not offer you enough money for your totaled vehicle to purchase a replacement, you may need to consider using any optional add-on insurance coverages you have. These optional policies can include new car replacement and gap coverage. New car replacement will replace your total loss vehicle with a comparable vehicle, and gap coverage will pay for any remaining balance owed toward your financed or leased vehicle that has been declared totaled.
If you are unsatisfied with the insurance company’s payout after your car accident, you can also opt to keep your totaled vehicle. You could potentially receive compensation for a portion of the repairs and still keep your vehicle, or you could try to make more money by selling your car’s parts yourself. If you choose to keep your totaled vehicle, you will need to apply for a salvage title, which may make it difficult to insure your vehicle and / or sell it later.
Another option after receiving an unsatisfactory offer from the insurance company for your total loss vehicle is to file a lawsuit. You may be able to collect compensation from the party liable for your auto accident for both your vehicle damage and any injuries you received. Another option may be to file a legal claim against the insurance company for bad faith if it can be proven that it knowingly offered you an unfair amount for your totaled vehicle.
Get Help for Your Total Loss Vehicle from a Car Accident Attorney in Texas
After an accident, you are not obligated to accept the insurance company’s valuation of your vehicle. You are entitled to present them with evidence showing your vehicle’s value prior to your crash and repair estimate. The skilled Pearland car accident lawyers at J.D. Silva & Associates can help you collect the evidence you need to negotiate a better total loss offer for your vehicle.
You should never negotiate with the insurance company without the assistance of a professional. Contact us today for help communicating with the insurance adjuster after a car accident. We understand the Texas total loss threshold and how to increase the compensation you receive from the insurance company after your collision.