2021-Totaled-Car-910When you are in a car accident, your insurance company has to evaluate the damage done to understand what kind of compensation to award you. There are times when it simply isn't worth it for the company to pay for the repairs to the car and they decide to call it a total loss. In regular terms we call it being totaled.

What does this mean for you though? It's possible that this evaluation can complicate things for you. It's not always to the benefit of the awardee to have their car totaled and then collect the payout.

In this article, we will go over what it means when your car is totaled and how to deal with it.

When is a car considered totaled?

There is a formula that insurance companies use to determine when to consider a car a total loss. The problem is that the formula varies from state to state. Let's use Texas as an example state as their system is not unique.

In Texas, and some other states, the car is considered totaled when the cost of the repairs, plus restoration will exceed 100% of the value of the car prior to the accident. They'll take what the Blue Book value of the car was considering the age, condition and mileage as factors and give it a value.

Then, when they add up the cost of the repairs, plus the paint job or body work to get it to look as it did before the crash. This is the official stance. There are also times when an insurance company will want to total the car even if the cost of the repairs is less than the value of the car.

This is when it can get complicated for you if you want to keep the car and have it repaired. You'll need a car wreck attorney in Houston on your side to get through to the insurance company when this is the case.

Do you still pay a car loan on a totaled car?

The insurance company will pay the value of the car to the lender to pay off the car if it is totaled. If the value of the car is more than what you owe then a check will likely be made to your lender who will then send you a check for the difference. You'll have to come to an agreement with the lender as to how this should happen.

However, given the fact that cars depreciate considerably, there is a chance that you will owe more money than what the insurance company decides the car was worth. In which case, you still have to finish making the payments to the lender for a car that you no longer have.

Unfortunately, if you want to keep the car, it is very difficult to do so as the title of the vehicle has to be changed to a salvage vehicle which makes fixing it very difficult. Many repair shops won't attempt to fix a salvaged vehicle.