When a car is totaled in Nevada, it means the cost of repairing it exceeds its market value. This can be a distressing situation, particularly when determining who receives the insurance payment. Understanding this process is crucial, whether you’re the car owner, a lender, or the outright owner of the vehicle. We’ll guide you through the steps and clarify who gets the insurance check when a car is totaled in Nevada.

What Does It Mean When a Car Is Totaled?

In Nevada, a car is considered totaled when the cost to repair it is more than 65% of its market value. Insurance companies use this threshold to determine whether repairing the car is worth it or if it should be deemed a total loss. Once a car is declared Toataled, the insurance company will pay out the market value of the car, minus any deductibles, instead of covering the repair costs.

The Role of Insurance in a Totaled Car Situation

When your car is totaled in Nevada, the type of insurance you have plays a key role in how your claim is processed and who receives the payout.

• Insurance Coverage: If you only have liability insurance, it won’t cover the cost of your vehicle’s damage. On the other hand, if you have comprehensive or collision insurance, these policies are designed to cover the market value of your car at the time of the accident, minus any applicable deductibles. This means that the insurance payout you receive is intended to reflect what your car was worth before it was totaled.
• Payment Distribution: The insurance payout typically goes to the party with a financial interest in the vehicle. If your car is financed, the lender usually receives the insurance check first. This is because the lender technically owns the vehicle until the loan is paid off. Once the lender has paid what you owe on the loan, any remaining balance will be sent to you. However, if you own the car outright, the insurance company will send the entire payout directly to you.

Who Gets the Insurance Check When a Car Is Totaled in Nevada?

When a car is totaled in Nevada, who receives the insurance check depends primarily on whether the car is financed or owned outright.

• Financed Car: If your car is financed, the lender holds a financial interest in the vehicle until the loan is fully paid off. In this situation, the insurance company will usually send the check directly to the lender. The lender will use the insurance payout to pay off the remaining balance on your car loan. For example, if the insurance payout is $15,000 and you owe $10,000 on the loan, the lender will take the $10,000 to clear the loan, and any remaining amount, in this case, $5,000, will be sent to you. If the payout is less than the amount owed on the loan, you would be responsible for covering the difference unless you have GAP insurance, which covers the shortfall.
• Owned Car: If you own the car outright, meaning there is no loan or lien on the vehicle, the insurance check will be sent directly to you. For instance, if your car is valued at $18,000 and it is declared a total loss, the insurance company will issue a check for $18,000 directly to you. This gives you full control over how to use the funds, whether it’s to purchase a new vehicle or cover other expenses.

In short, the lender receives the insurance check first if there is a loan on the car, and any leftover funds are sent to the car owner. If the car is owned outright, the entire check goes directly to the owner.

What Happens If the Insurance Payout Is Less Than the Loan Amount?

Sometimes, the insurance payout may not be enough to cover the remaining balance on your car loan. This can happen if the car’s market value has depreciated significantly. In such cases, GAP (Guaranteed Asset Protection) insurance can be a lifesaver. GAP insurance covers the difference between the car’s market value (what the insurance company pays) and the amount you still owe on your loan.

If you don’t have GAP insurance and the insurance payout is less than the loan amount, you’ll need to pay the remaining balance out of pocket. This situation is commonly referred to as being “upside down” on your car loan.

Dealing with a Totaled Car When You Own It Outright

If you own your car outright and it’s totaled, the process is more straightforward. The insurance company will send the check directly to you, and you can decide how to use the funds. Many people use the insurance payout to purchase a new vehicle, but you have the flexibility to use the money as you see fit.

It’s important to carefully review the insurance company’s offer before accepting it. If you believe the offer is too low, you can negotiate with the insurance adjuster. Providing documentation such as recent maintenance records, receipts for upgrades, and comparable sales of similar vehicles can help you justify a higher payout.

What to Do If You Disagree with the Insurance Company’s Offer?

If you believe the insurance company’s offer is too low, you have the right to dispute it. Start by asking for a detailed explanation of how they arrived at the payout amount. Compare their offer with the value of similar cars in your area.

If necessary, gather additional evidence to support your claim. This might include getting an independent appraisal or providing documentation that shows your car was worth more than the insurance company’s offer. If you’re still unable to reach a satisfactory agreement, consulting with a car accident attorney may be your best option. An attorney can help negotiate with the insurance company and ensure you receive a fair settlement.

Contact Our Experienced Car Accident Attorney in Nevada Today!

If you’re struggling to get a fair settlement or if you believe the insurance company is not offering what you deserve, it’s essential to seek legal advice. At Moss Berg Injury Lawyers, we specialize in helping Nevada residents with car accident claims, including disputes over insurance payouts. 

Our experienced attorneys can guide you through the process, protect your rights, and work to ensure you receive the compensation you deserve. Don’t wait—contact us today for a free consultation.