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How Auto Insurance Companies Determine a Total Loss

auto-insuranceThe United States is a car nation. Almost every driver owns a car or truck. We depend on them to get us to our jobs and elsewhere. We love our cars. We name them and can be very sentimental about them. However, insurance companies are not emotional. If you are involved in a crash, sentiment will not play a part in a Houston auto accident compensation settlement. The amount you are offered might not be enough to replace your car if the insurer considers it to be a total loss.

Houston auto accident settlements are based on the actual cash value (ACV) of the vehicle. If the cost to repair it is more than the car’s value, the insurer is likely to call it totaled. This is especially true if the car is an older model. Body work can be very expensive, which is why insurance companies deem a car totaled even if it could be repaired. A serious accident could require a new hood, grill, fender, bumper and other parts. Even after a minor crash, it can cost quite a bit to restore a newer car to its former condition. Some insurers consider a car totaled at a threshold percentage of the ACV, such as 75 percent.

Your insurance company will have a claims adjuster examine your car, but some damage is hard to detect until the chassis is inspected. You might need to get a repair estimate from a shop that the insurer trusts and has worked with previously.

If your insurance company decides to cover the repairs, they will only pay to fix the damage caused by the accident. Any pre-accident damage will remain as it was before the wreck.

To establish their settlement offer, your insurer will check a resource like the Kelley Blue Book, which factors in the make, model, trim package, age, condition and mileage to determine the vehicle’s fair market value. If it was already dented or damaged, the ACV will be decreased. In the event that you receive a full “totaled” settlement, you must turn the vehicle over to the insurer, and it will be sold in its current condition at an auto auction.

There is no cut-and-dried rule. Each case is unique, and insurance companies have been known to make surprising decisions regarding totaled vehicles. In some cases, Houston car crash attorneys can successfully argue that the vehicle is not a total loss and is worth repairing. Then, the insurer could be required to pay for the repairs.

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