What Happens When My Auto Insurance Claim Totals My Vehicle in Texas?
Q&A Guide for Texas Drivers
If you’ve recently been in a car accident or a major hail storm and your insurance company has declared your vehicle a total loss, you’re likely wondering what comes next. Here’s a simple Q&A guide to help you understand the process, your options, and what terms like “salvage title” actually mean—specifically for drivers in Texas.
Q: What does it mean when my car is “totaled”?
A: When your car is considered “totaled” or a total loss, it means the cost to repair the vehicle is more than its actual cash value (ACV) or a certain percentage of it. In Texas, if the cost of repairs plus the salvage value exceeds the vehicle’s ACV, insurance companies will generally declare it a total loss.
Q: What is the process after my vehicle is totaled?
A: Here’s what typically happens:
- Claim evaluation: The insurance adjuster inspects your vehicle and determines the damage.
- Valuation: They calculate your car’s ACV, which is what the car was worth just before the accident.
- Offer: You’ll receive a settlement offer based on the ACV, minus your deductible if you’re at fault or using your own coverage.
- Title transfer: If you accept the offer, you’ll usually sign over the title to the insurance company.
- Payout: You receive a check, which you can use to buy another vehicle.
If you still owe money on your car loan, the payout will first go to your lender. If the payout is less than what you owe, gap insurance (if you have it) can help cover the difference.
Q: What are my options if my car is totaled?
A: You typically have two options:
- Accept the settlement and surrender the car: Most drivers go this route, especially if the car is undriveable.
- Keep the car: You can keep the car, but your payout will be reduced by the car’s salvage value. You’ll then receive a salvage title and will be responsible for repairs, re-inspections, and applying for a rebuilt title if you want to drive it again legally.
Q: What is a salvage title?
A: A salvage title is a type of vehicle title issued when a car has been declared a total loss. In Texas, vehicles with salvage titles cannot be legally driven on public roads until they’ve been repaired, passed inspection, and converted to a rebuilt title.
A vehicle with a salvage or rebuilt title usually has a much lower market value and can be harder to insure, though liability insurance is typically still available.
Q: Can I dispute the insurance company’s valuation?
A: Yes. If you believe the settlement offer is too low, you can:
- Provide documentation like recent photos, service records, or comparable local listings.
- Hire an independent appraiser.
- File a complaint with the Texas Department of Insurance if needed.
Final Thoughts
Getting your car totaled can feel overwhelming, but understanding the steps and your rights helps. If you’re in Texas, knowing your options with salvage titles, payouts, and disputes ensures you make the best decision for your situation.
Need help understanding your total loss settlement? Contact Dan Baze Agency.
