Will Insurance Pay Off Your Car Loan After a Total Loss in Nevada?
If your car is totaled in an accident, one of the biggest questions is simple:
Will insurance pay off your loan?
In most cases, the answer is no.
Insurance typically only pays the actual cash value of your vehicle, not what you owe on it.
If you have questions about your situation, Solis Torres Law can help. Call 702-522-5555 for a free consultation.
What Does Insurance Pay When Your Car Is Totaled?
When a vehicle is declared a total loss, the insurance company pays:
the fair market value of your car before the accident
not the remaining balance on your loan
This value is based on:
age of the vehicle
mileage
condition before the crash
comparable sales in your area
If you owe more than the car is worth, you are responsible for the difference.
When Is a Car Considered Totaled in Nevada?
Under Nevada law, a vehicle is considered a total loss when:
the cost of repairs exceeds 65% of its fair market value
This is known as the total loss threshold (TLT) and is relatively low compared to other states.
What Happens If You Still Owe Money on the Car?
This is where many people get caught off guard.
If your loan balance is higher than the vehicle’s value:
insurance pays the vehicle value
you still owe the remaining loan balance
This is commonly called being “upside down” on your loan.
What Is Gap Insurance?
Gap insurance covers the difference between:
what your car is worth, and
what you still owe on your loan
If you have gap coverage:
the remaining balance may be paid off
you avoid paying for a car you no longer have
However, gap insurance does not provide money for a new down payment.
What If Someone Else Caused the Accident?
If another driver was at fault, you may be able to recover:
property damage (vehicle value),
personal injury damages, and
other related losses
However, even in these cases, insurance still focuses on vehicle value, not your loan balance.
What You Should Do After a Total Loss
1. Verify Your Car’s Value
Do not rely only on the insurance company.
Check:
Kelley Blue Book
comparable listings
dealer values
2. Continue Making Loan Payments
Until the claim is resolved, you are still responsible for the loan.
Missing payments can damage your credit.
3. Review Your Insurance Policies
Check if you have:
gap insurance
underinsured motorist coverage
additional protections
4. Speak with an Attorney
If the accident was not your fault, an attorney can:
challenge low valuations
pursue additional compensation
protect you during negotiations
Why Insurance Companies Undervalue Vehicles
Insurance companies aim to minimize payouts.
Common issues include:
undervaluing comparable vehicles
ignoring upgrades or condition
using unfavorable market comparisons
If you accept their first offer, you may leave money on the table.
Talk to a Las Vegas Car Accident Attorney
If your car was totaled and you still owe money, you need to understand your options.
Call Solis Torres Law at 702-522-5555 for a free consultation.
No fee unless there is a recovery.
FAQ
Does insurance pay off my car loan if my car is totaled?
No. Insurance pays the vehicle’s market value, not your loan balance.
What if I owe more than my car is worth?
You are responsible for the remaining balance unless you have gap insurance.
What is the total loss threshold in Nevada?
A car is typically totaled when repair costs exceed 65% of its value.
Can I negotiate the value of my car?
Yes. You can challenge the insurance company’s valuation with supporting evidence.
Should I keep paying my loan during the claim?
Yes. You should continue payments until the claim is resolved.
