Property Damage

Cogburn Law
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Madeleine Jones
September 11, 2013

           What happens when your vehicle is damaged to the extent that the cost of repairing it costs more than the value of your car?  If you are lucky, you will never encounter this situation, but in the event you do there are some terms and definitions you will need to understand.

            You may hear the term “total loss”.  In Nevada, this term means a vehicle that has been damaged to a point where the estimated cost of repair exceeds 65% of the fair market value of the vehicle immediately before it was damaged. 

            By way of example, if the fair market value of your car was $15,000 the day before it was damaged, but the estimated cost of repairs is $9,800, then your car would be considered a total loss.

            If the vehicle is a total loss, then the insurance company must pay you the actual cash value of your vehicle. The problem is your idea of actual cash value might differ from the insurance company’s idea of actual cash value. Be warned that actual cash value is not the Kelly Blue Book value.  Instead, insurance companies use appraisers or computer programs to determine the value and typically the number will fall somewhere between the price if purchased from a dealership and the price if purchased from a private party.

            If you have put extra upgrades into your vehicle, it is important to keep receipts for these upgrades so you can provide this information to the insurance company to help increase the value of your vehicle. This does not mean you will recoup every dollar you put into upgrading your vehicle, but it will factor into the overall actual cash value calculation.

            Remember, the idea is to recoup as much money as you can so that you can replace your damaged vehicle with a similar vehicle.

             If you’ve been in an accident and have additional questions, contact Cogburn Law Offices today. We can help.