How Insurance Companies Determine if a Car is Totaled in Texas

A totaled car isn’t the state of a vehicle — it’s a determination made by the insurance companies whether they’ll pay for repairs or the vehicle’s value. 

When there’s a car accident, your insurance company will be responsible for repairing it. However, if they conclude that it would cost more to fix it than the car’s resale value is worth, they will determine it is a total loss or totaled. 

This will all be determined by an insurance company’s appraiser. This means that their assessment will decide if your car is fixed or you get the vehicle’s cash value, which could go toward a new car. 

So what will an insurance company’s appraiser qualify as a totaled car in Texas? 

How Do Insurance Companies Calculate Total Loss After a Wreck?

To calculate total loss, insurance companies have a simple formula: The resale price of the vehicle — the costs of repairs = x

If x is a negative number and the repairs are more expensive than the price of the vehicle, it’s considered a total loss. 

But precisely how do insurance companies calculate total loss after a wreck? 

First, they’ll need to know the resale price of the car. Many factors will determine this during an appraisal. Those include:

  • History of accidents. Car accidents diminish the value of a vehicle. Any accidents before the current one will factor into the value. If your vehicle was in better or worse condition than vehicles of a similar make, model, and year, this will impact the value.
  • Vehicle model. Some makes and models will retain their value longer than others, even after an accident.
  • Age. As soon as you drive a new vehicle off the lot, the car’s value depreciates. By the first year of ownership, the value decreases 20-30%. The older your car, the less it’s worth.
  • Mileage. The more miles a car has, the lower the resale value. Even a younger car’s value can be low if it has more miles than average.

Now that the resale value is determined, a mechanic will inspect the car. An expert will determine the necessary repairs and the costs for each. The two values are compared, and only if the vehicle is worth more than the cost of the repairs, the insurance company will pay to repair. However, the estimate might not be in your best interest. Have an attorney on your side to ensure you get the best deal in settling the claim. 

Why You Need an Attorney

Theoretically, this system benefits both the vehicle’s owner and the insurance company. If repairs cost more than the vehicle’s value, the insurance company gets to pay less, and the owner can put the vehicle’s worth towards a new car. 

However, the appraisal is done by the insurance company’s experts. This means that they may determine a lower value than an objective appraiser would, leaving you with less than you deserve. 

Having an attorney shows the insurance company that you are serious about settling your claim fairly. An attorney can stand up for you, gather evidence to show the actual value of your vehicle, and help determine a fair settlement amount. 

Your attorney and the insurance company can negotiate a total loss claim just as with personal injury claims. Your attorney will present your case to negotiate for the highest value possible. The higher the number, the more beneficial it is to you. 

This way, you get proper compensation that you can put towards your new purchase. 

If you’ve been injured by the negligence of another, you could hire any accident attorney near you, or you can hire double board certified car wreck lawyer. Joe Stephens has been defending injury victims in Texas for over 3 decades from negligent individuals, companies, and greedy insurance companies. As a veteran personal injury lawyer in Katy, TX, Joe handles all cases personally, and his staff is always available to answer questions.

What to Do After the Accident

If you are dealing with a totaled car after a wreck, it’s likely you’ve been injured in an accident. When you’re involved in a severe car accident, you should be checked out by a medical professional.

Immediately after the accident, hire an attorney to handle your case. An attorney can answer all the questions you have, including: 

  • How do insurance companies calculate total loss after a wreck?
  • What compensation you should negotiate for
  • What about personal injuries? 

They’ll work with you throughout the entire legal process to ensure you’re receiving fair compensation for your car damages and injuries.

If You Were Injured in a Car Wreck Call West Houston Injury Attorney Joe Stephens Now

Property damage and personal injury claims can be complicated, and a wrong move can result in thousands of dollars less for your final settlement. So make sure you have an experienced attorney representing you for your insurance company claims to get the best outcome. Call today and get a free case consultation with Joe Stephens. 

The Stephens Law Firm, Car Accident Lawyers handles auto accident lawsuits across Texas, including these Houston cities.