Car collisions can result in a wide range of physical damages. The most minor accidents can result in simple fender-benders, scratches, chipped paint, or bashed-in bumpers. More serious accidents may result in consequential damage. In some cases, your car might even be deemed “totaled.”
But what exactly does it mean for your car to be totaled? This distinction has important implications for your insurance claim, so it’s important to know what does or doesn’t qualify as a totaled vehicle.
The definition of a totaled vehicle is actually determined by the state and can vary from one state to the next. For our purposes, we’ll focus on what constitutes a totaled vehicle in the State of Texas.
When Does Your Car Count as Totaled in Texas?
In the Lone Star State, a car counts as totaled (that is, a total loss) when the car’s actual cash value (ACV) is less than the value of repair costs. Here it’s crucial to note that the total repair cost includes all parts and labor needed to get the car back up and running, but it does not include sales tax, nor the cost to repaint the vehicle.
What makes this distinction so important? In Texas, insurance companies use this basic definition to help them determine when it’s worthwhile to pay for vehicle repairs, or when it’s in everyone’s best interests just to scrap your car and send you a check to put toward a new one.
Another key point: We tend to think of cars being totaled in serious collisions, but even a minor fender-bender can result in a total loss if it’s an older model that has a very low ACV. And even if the damage to your car looks very minor, hard-to-find or expensive replacement costs may render it a total loss.
What is the Actual Cash Value of a Vehicle?
We’ve mentioned the concept of ACV a couple of times now, but what exactly does this term entail?
Basically, ACV is a calculation of the vehicle’s original value, minus any value lost from depreciation. Cars depreciate more and more over time, which is why it’s more likely for older models to be totaled; their ACV can be so low that even a mild scrape-up can prove more costly to repair than the vehicle is actually worth.
Can You Dispute Whether Your Car is Totaled?
When you file a car insurance claim, your insurance company will use an internal/confidential formula to determine whether the car qualifies as a total loss. In some instances, you may actually disagree with their assessment, and wish to dispute it so that you can get your car repaired rather than scrapped.
In these instances, it is usually wise to consult with a car accident attorney, who can advise you about your rights and help you reach a resolution with your insurance company. With any questions about a totaled car claim in Texas, we invite you to contact McLaurin Law Firm at your convenience.
