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Summary
In Nevada, a vehicle is considered totaled when the cost to repair it exceeds 65% of its actual cash value.
Table of Contents
When Is a Car Considered Totaled
Under NRS 487.790, a car is considered totaled or a total loss in Nevada when the repair cost exceeds 65% of its fair market value before the car accident.
However, it's important to understand that the total loss threshold will vary by state, and in some cases, the state allows the insurance company to utilize a lower threshold.
What Happens If Your Car Is Totaled in a Motor Vehicle Accident
When damage caused by a car accident results in your vehicle being totaled, the insurance company will play a significant factor in the claims process and in obtaining a settlement.
Damage Assessment
The insurance company will send an insurance agent to analyze the damaged car and estimate a repair cost by consulting with a body shop or other vehicle experts.
In addition to determining repair costs, the insurance company's agent will calculate the car's actual cash value (ACV) and check if the damage exceeds it.
Determining If the Vehicle Is a Total Loss
Using either the total loss percentage set by state law or your insurance company, it will be determined if your vehicle will be considered a totaled car.
Settlement Offer
Depending on your car insurance coverage, the insurance adjuster will offer you an insurance payment based on your vehicle's ACV before the auto accident.
The settlement offered should compensate you for the vehicle's fair market value before the accident minus any deductibles you owed.
If the settlement the insurance company offers seems unfair, contact an experienced car accident attorney from our law firm by calling (702) 566-3600 to learn if you're entitled to more.
Vehicle Salvage
Once a settlement is agreed on and insurance pays for the total losses, the insurance company will typically take possession of the totaled car and sell it to a salvage yard.
However, you can opt to keep your totaled car, but the insurance company will subtract the potential salvage profits from your settlement and apply a salvage title to your vehicle.
What to Do When Your Car Is Totaled and You Still Owe Money on It
If the insurance company declares your car totaled and you still owe money on a car loan or lease, you should take the following steps:
- Compare Your Insurance Payout to Your Loan Balance: See if your insurance settlement is more than your loan balance, and if so, you can pay off your loan and keep any remaining funds. However, if your settlement is less than what you owe, you may be financially responsible for the difference through a loan gap.
- Utilize Gap Insurance (If You Have It): If you have gap coverage as a part of your auto insurance plan, you can use it to cover the difference between your car's ACV and the loan amount you still owe.
- If You Don't Have Gap Coverage: If you don't have gap coverage, you may be forced to pay the remainder of the loan out of pocket.
- Coordinate with Your Lender: When dealing with a totaled vehicle and unpaid loans, it's important to keep in touch with your lender and see if anything can be worked out to mitigate financial damage.
Whose Insurance Company Will Pay for a Totaled Vehicle
When determining whose insurance company pays for a totaled car, it's crucial to understand that it almost entirely relies on liability, which, in short, is the at-fault party in the accident.
If You Are at Fault
If you caused the accident that resulted in your car being totaled, you'll have to use your insurance to pay for your totaled car.
If your insurance policy includes collision coverage, insurance covers the totaled vehicle regardless of who the at-fault driver was in the accident.
If you don't have collision insurance, you may have to use other insurance coverage options, such as uninsured/underinsured motorist coverage, or pay out of pocket for the damages.
If You Are NOT at Fault
If another driver was at fault for the total loss of your vehicle, their property damage liability coverage should pay for your totaled car.
However, if the driver does not have car insurance, you may have to use your own collision coverage to recover compensation.
What Should You Do with a Totaled Car
When dealing with totaled cars, there are numerous options you can take to deal with it, including:
- Donate the Car (Could result in a tax deduction)
- Sell the vehicle to a scrap or repair shop
- Accept the full insurance payout and have the insurance company take possession of the vehicle
- Attempt to have the damaged vehicle repaired
What Is the Total Loss Law in Nevada?
Nevada state laws for total loss are outlined under NRS 487.790 and state that a vehicle is considered a total loss when the costs to repair it exceed 65% of its fair market value.
If a vehicle meets the 65% criteria insurance companies must declare the vehicle as a total loss and the owner must obtain a salvage title before they attempt to sell or rebuild it.
To learn more about Nevada's total loss law, consult with a Las Vegas car accident lawyer today by calling (702) 566-3600.
What Is the Formula for Total Loss
When insurance companies want to determine whether a vehicle is totaled, they use the following total loss formula: Costs of repairs + Salvage Value > Actual Cash Value (ACV).
Here's what each variable in the total loss formula means:
- Costs of Repairs: An estimate of how much it would cost to repair your car to its state before the accident.
- Salvage Value: An estimate of how much your totaled car would sell at a salvage auction.
- Actual Cash Value (ACV): The true market value of your car before being totaled, considering factors such as selling price, age, mileage, and condition.
Example of the Total Loss Formula
If the actual cash value of a car is $12,000, and it gets into an auto accident resulting in repair costs of $9,000, and it's discovered that the car's salvage value is $2,500, the formula will be:
- $9,000 + $2,500 ($11,500) > $12,000
Due to the costs of repairs plus the salvage value being less than the actual cash value, the car may not be considered totaled unless it exceeds your state's set total loss threshold.
Can You Get a New Car After a Total Loss
Yes, it's completely possible to get a new car after a total loss.
However, when getting a new car following the old one being totaled, you should:
- Cover Any Loan Gaps: If the insurance claim settlement doesn't cover what you owe on any auto loans, you'll have to use loan or lease gap coverage or your own funds to pay the remainder.
- Use the Insurance Payout Toward a New Car: It's highly recommended that after you cover any loan gaps, you use the settlement as a down payment for a new car.
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Rodney Okano Car Accident Lawyer is a Las Vegas personal injury law firm with over 20 years of experience helping clients obtain maximum compensation following injuries from accidents such as car crashes, worksite injuries, and slips and falls. Over those years, The Rodney Okano Car Accident Lawyer Law Firm has become an experienced law firm that can ensure exceptional results for any of its clients.
