How Do You Know If Your Car Meets the Total Loss Threshold in Oklahoma?
In 2021, there were more than 66,000 crashes in Oklahoma. Nearly one in three of those were minor fender-benders on city streets – but that doesn’t mean no damage was done. Even minor crashes can result in damage to both the individuals and vehicles involved. And if your car is an older or more affordable model, it could even be declared totaled under Oklahoma’s total loss threshold.
What Is the Total Loss Threshold in Oklahoma?
In Oklahoma, the total loss threshold is 60% of the vehicle’s fair market value. This means that if the “actual documented cost of repairing the vehicle for safe operation on the highway [exceeds] 60% of the fair market value,” the vehicle is considered “totaled.” The fair market value of the car refers to how much it would have been worth immediately before the damage occurred.
As an example, if your car is worth $12,000 just before the accident, but it needs $7,500 in repairs, it will be considered totaled under Oklahoma law. This is known as a simple percentage threshold. Some other states use a total loss formula, which also takes into account the car’s salvage value or diminished value
Total loss laws vary from state to state, but most use threshold systems to account for internal damage to the car that you may not see until repairs begin. Oklahoma’s 60% total loss threshold assumes that when a car has this much damage, it’s likely to have even more problems down the line.
How Does the Insurance Company Determine a Total Loss?
To figure out whether a car meets the total loss threshold in Oklahoma, the insurance company needs to determine two things:
- The cost of repairs
- The fair market value of the car just before the accident
To determine the cost of repairs, the insurance company will send out an adjuster to assess the damage and assign a dollar amount. This is the same process they’ll use for any insurance claim.
According to Oklahoma law, insurance companies can use the following strategies to determine the fair market value:
- The cost of a comparable motor vehicle sold in the local market area in the prior 90 days, when available
- One of two or more estimates from qualified dealers within the local market area when a comparable vehicle is not available
- The cost of a comparable motor vehicle as quoted in the latest edition of the National Automobile Dealers Association Official Used Car Guide or another nationally recognized guidebook
If the adjuster estimates a cost of repairs that is higher than the fair market value, your car meets the total loss threshold in Oklahoma. The insurance company will declare your car totaled, you’ll sign some paperwork, and they’ll cut you a check for the fair market value.
What If You Disagree with the Insurance Estimate?
When your car is totaled, the insurance company pays you, as the policyholder, the fair market value of the car, minus your collision deductible. The car’s title is signed over to them, which means they become the owner. Then, they’ll usually resell it at an insurance auction. That allows them to not only avoid paying for the repairs, but possibly even make a profit.
This means that insurance companies may have a reason to declare that your car meets Oklahoma’s total loss threshold, even if it doesn’t. They also may be motivated to underestimate the fair market value, so they don’t have to pay you as much for the vehicle. It’s important to know that if your car is declared totaled, you can get your own appraisal of its value and challenge the insurance company’s offer.
What Happens When Your Car Is Totaled?
Oklahoma’s total loss threshold is one of the lowest in the nation, so totaled cars are common here. Here’s what happens after an accident and once your car is declared totaled.
Determining Fault
In Oklahoma, the person (or their insurance) who was more than 50% at fault for the accident is responsible for the losses involved. However, determining fault can take a while, and most of us need our cars on a daily basis. Even if you’re not at fault in an accident, you might choose to pay your deductible to get the ball rolling. You can then get reimbursed if you’re determined not at fault.
Knowing Your Car’s Value
Car insurance companies will usually offer you the lowest possible “fair market value” they’re able to get. You should always research the value of your car independently. It’s easy to look up the value on Kelley Blue Book or Edmunds. If possible, you should also have your car towed to an auto body shop you trust. They can give you an estimate of the repair cost, and you can then also have it independently appraised.
Settling the Claim
Investigating whether your car meets the total loss threshold in Oklahoma can take a while, so don’t wait to file a claim. However, it’s also important not to take the first settlement offer from the insurance company if you don’t think it’s fair – especially if you still owe money on the loan. Think of it this way: The insurance company says your car’s fair market value is $4,000. If you have a $500 deductible and still owe $3,000 on the car note, you’re down to just $500 to buy a new car. But if your car is really worth $6,000, you’ll have $2,500 to buy a new car. That’s a big difference.
The Bottom Line
If you’ve been in a car accident, you need all the help you can get to recover compensation. Remember: Whether it’s for auto repair, fair market value, or personal injury claims, insurance companies want to pay you as little as possible. They may declare that your car meets Oklahoma’s total loss threshold when it doesn’t, offer you a low settlement, or even deny your entire claim.
It’s almost always in your best interest to work with an experienced car accident attorney to help with all aspects of your case. Get your free case evaluation from the Oklahoma Injury Guy and get the compensation you deserve for your vehicle and your injuries.