How Is a Vehicle Considered “Totaled”?
When a vehicle is damaged in an accident, many clients can obtain compensation to have it repaired. However, when a vehicle is totaled, our clients typically receive a check, which they can then use to purchase a new set of wheels.
In Nevada, we have a statute that defines when a wreck qualifies as a “total loss vehicle.” We advise our accident clients about how they can get their cars fixed, and we would be happy to talk with you as well.
Defining a Total Loss
Nevada Revised Statute § 487.790defines what qualifies as a “total loss.” Put simply, a vehicle is totaled when the cost of repairs is equal or greater than 65% of the fair market value of the vehicle before the accident.
For example, if your car was worth $10,000 before the crash and needs at least $6,500 in repairs, then it is totaled. If it only needs $5,000 in repairs, it does not qualify as totaled under our laws.
The key is determining how much your car was worth before the crash. This will depend on many factors, such as the make and model, along with the mileage and general condition of your vehicle. Cars typically depreciate 20% in their first year and 10% every year after that, at least for the first 5 years. Your insurance company probably has a formula in place that will help them determine your car’s value before the crash.
Many people wrongly assume that their car’s value is the same that it was at the time they purchased it. Unless you got into an accident right after buying your car, then this amount is rarely relevant.
Exceptions to the Law
There are many exceptions, which you can read by visiting the relevant statutory language. For example, the cost of repairs does not cover:
- Painting any part of the vehicle
- Replacing electronic parts in accordance with manufacturer specifications
- The cost of towing the vehicle
The term “totaled” does not cover any vehicle that is 10 years or older and which requires replacing only the hood, trunk lid, fender, and/or other parts that can be bolted, such as doors or grill assembly. So a really old vehicle that needs to have the trunk lid replaced is not totaled, even if the cost exceeds 65% of the fair market value.
Making a Claim
An accident claim involving vehicle damage usually involves having a claims adjuster view the vehicle. The adjuster can note the condition of the car and try to determine its fair market value before the crash.
The adjuster then might request that you take the car to a body shop in their network to get an estimate for the cost of repairs. Based on the estimate, the adjuster will determine whether the vehicle qualifies as a total loss. If so, you will receive a check and the insurer will take possession of the vehicle from you.
Keeping a Totaled Vehicle
Some people want to keep their totaled vehicle. What happens in this situation?
You won’t receive the full amount that you would if you did not keep the vehicle. Instead, your insurer will probably pay you the car’s cash value, less any deductible that is due. They will also deduct the amount you could have sold your car for at a salvage yard. Remember, even totaled vehicles often have some value for scrap and parts, so by keeping the totaled vehicle you are keeping something that is worth at least a little bit of money.
Let’s say the fair market value of your vehicle is $12,000. Your deductible is $2,000, so there is only $10,000 to pay you. If you decide to keep the totaled car and it is worth $1,000 at a salvage yard, then you get $9,000 in total from your insurance company.
You can use that money to have your totaled vehicle repaired. You must find a body shop to work with, and you are responsible for the full costs. If those exceed the amount you got from your insurer, you are fully responsible for them. You can also choose to sell your totaled vehicle on your own to a salvage yard and use the money for whatever you want.
Should you have a totaled vehicle repaired? Some experts argue against it. They point out that it is hard to assess the damage, and once you begin replacing damaged parts you might realize that you have to fix more than you initially thought. This is particularly true of older cars that might have corrosion damage. Other damage, like cracks in the frame, are also harder to see but would be expensive to repair.
Paying to Fix a Vehicle: What Insurance Do You Use?
If you were involved in an accident, you might wonder whose car insurance covers the cost of repairs. Generally, if someone else is to blame for your accident, then their liability insurance policy should cover the cost. In Nevada, every driver should carry at least $20,000 in property damage insurance, which covers damage to another person’s vehicle.
You might also be able to use your comprehensive or collision coverage to pay for vehicle repairs. Collision is no-fault insurance that pays for repairs if you hit another vehicle. Because it is no-fault, you can be at fault for the accident and still tap your collision insurance.
Comprehensive insurance covers damage caused by something other than a collision. For example, if your car is vandalized or damaged in a storm, then you can make a claim on your comprehensive policy.
In Nevada, both comprehensive and collision are optional. If you have a car loan, however, then your lender probably requires that you carry both, which protects them until you pay off the loan. Go through your paperwork and check.
Contact Naqvi Law Today
Property damage often goes along with expenses related to bodily injuries. At our law firm, we can represent injured motorists who are trying to make a claim with an insurer. Contact us today to schedule a free, confidential review.