What if My Car is Totaled in an Indianapolis Car Accident?

It is unfortunate, but it happens too often in serious car accidents in Indianapolis. Your car is totaled in the car accident, which is the fault of the other driver. You still owe a fairly large balance on your car – however, you are not offered the full amount to pay off your car loan. What do you do now?


What Does “Totaled” Mean?


First of all, let’s talk about how insurance companies determine if your car is “totaled.” The insurance company will evaluate the actual cash value of your car by determining and calculating specific variables, including:


  • Mileage on the odometer;
  • Condition of your car; and
  • Make, model, and year of your car.


There are cases when insurance companies declare a vehicle totaled, even when the cash value of the car is more than the cost of repairs. In some states, insurance companies have the leeway of making the decision at their discretion whether or not the car is totaled. In other states, however, the decisions of insurance companies are regulated and monitored by the state. But, this is just one part of the determination regarding the final amount you will be paid.


The state of Indiana has legislation that requires the threshold of total loss of a vehicle to be at least 70 percent before it will issue a salvage title. What that means, in layman’s terms, is that the amount of money it will cost to repair the vehicle must be equivalent or greater than 70 percent of the calculated actual cash value of the vehicle. For example, if your insurance company determines that your vehicle is valued at $5,000, the total cost of repair must be equal to or greater than $3,500 in order for your insurance company to declare it a “total loss.”  


Fault-Based Insurance State – Who Pays the Claim?


Who is responsible for paying for the claim? This is where things get more complicated. Indiana is considered a fault-based state regarding car accidents and insurance. Therefore, if you are found at-fault for the accident and you have full-coverage insurance, your auto insurance company is responsible for paying the claim. However, if another driver is found at-fault for the collision, their insurance company will be responsible for paying the claim to you.


Indiana follows the 51 percent Bar Rule as well, meaning that if a driver is found at-fault, they cannot recover any compensation for the accident and damages if their percentage of fault is determined to be 51 percent or more. Not all car accidents are considered one driver’s fault, which means that one driver can be found to be 75 percent at-fault, while the other driver is found 25 percent at-fault. Determination of fault is crucial in the equation when requesting the total cash value of a vehicle. As long as the driver is found 50 percent or less at fault, they can recover compensation for their damages. In that case, the driver would only be paid 50 percent of the “totaled” amount.  


What if the Cash Value Determined By the Insurance Company Is Low?


If you feel you have been offered a lower figure than expected for the actual cash value of your car, you can obtain estimates and quotes from several used car lots or car dealers and attempt to negotiate a higher payout. Make sure you get the copy of the estimate or quote signed by the dealer or salesman who provides it to you. Then, take those quotes and estimates to your – or the other driver’s – auto insurance company’s adjuster (whoever was found at fault) and try to negotiate a higher offer.


What if the Amount Offered Does Not Cover My Loan?


If your vehicle is deemed totaled and you still owe money to a loan company, you will be required to pay off the balance of your loan first. Normally, the amount that the insurance company settles on will be paid toward the balance of your loan before you can think about putting the money toward another vehicle. The reason why this happens is that the insurance company is essentially purchasing your totaled car from you, therefore it will demand the title for your car in exchange for the check for the actual totaled amount.


However, if the amount the insurance company offers you for your totaled car is less than the total amount to pay off the balance of your loan, it will cause problems. Obviously, you will not be able to pay off the loan, hence you also will not be able to provide the insurance company with the title to your vehicle, as the loan company will still have a lien on your car until the total amount of your loan is paid off. In this case, you will need to renegotiate the amount offered to you for the value of your car, which means proving to the insurance company that your car is worth more than they are offering, proving that the loan amount is more than the insurance company offered you, and working out a settlement amount that works for everyone involved.


If you have a bodily injury claim and are currently facing a situation in which your vehicle has been totaled and your loan balance is more than the insurance company is saying your car is worth, the experienced Indianapolis auto accident lawyers at the law offices of Rowe & Hamilton can assist you with negotiating a just payout from the insurance company. This is a service we offer for our personal injury clients at no charge. We have handled negotiations between insurance companies, lenders, and vehicle owners to ensure a fair property damage settlement. Call our offices today to find out how we can help you on both your bodily injury and property claims.  

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