My Car Is A Total Loss, Do I Have To Give It To The Insurance Company?

Following a car crash, the insurance company is going to send out an adjuster to inspect your vehicles damage and evaluate the cost to conduct the repairs. If the cost of the repairs exceed 65% of the total value of the car, under Nevada law, the car is considered a total loss. The total loss means that the insurance company will not pay to have the car repaired.

When deeming the vehicle a total loss, the insurance company is required to compensate you for the market value of your vehicle prior to the car crash. For example, let’s say that the market vehicle of your car was $10,000 before the car crash. After the car crash, the cost to conduct the repairs to your vehicle are estimated to be $7,000. In that scenario, under Nevada law, the vehicle is to be considered a total loss. Accordingly, instead of the insurance company repairing the vehicle, the insurance company pays you an amount equal to the market value of the vehicle, $10,000.

After the vehicle is deemed a total loss you generally have two options: (1) give the vehicle to the insurance company and take the check for the total loss value or (2) keep the vehicle and the total loss value, less the value of the salvaged title. Yes, when your car is deemed a total loss, YOU CAN KEEP YOUR CAR. You do not have to give it to the insurance company. However, the amount you receive will be less.

When you keep your car after it is deemed a total loss, there is technical transaction that is played out in the back ground. Let me explain this by continuing with the above example, let us say the market value of car before the car crash is $10,000; then, let’s say that after the car crash, the market value of your vehicle $1,000, what the insurance would get for the car at a junk auction. In this example, if you decided to keep the car, you would get $9,000 (market value pre crash – market value post crash). However, in keeping the car, you would have to exchange your title for a salvaged title.

Why would you want to do this? Because maybe you have resources, connections, or the knowledge to repair the vehicle with the funds that will be paid to you by the insurance company.

There are several details in determining the market value of the car and legal and economic implications of obtaining a salvaged title. If you have any questions, please do not hesitate to reach out to me.