If you get into a car accident and the insurance company declares your vehicle a “total loss,” that means that your vehicle costs more to fix than to replace. Keep in mind that insurance companies not only consider the cost to repair the vehicle, they often:
- include costs like the cost to pay for a rental car while yours is being repaired; and
- deduct the amount they would receive for selling the vehicle as salvage.
You may be wondering what your next steps are, and what options you have to get back out on the road ASAP.
If you agree with the insurer:
If you agree with the insurance company’s assessment that your car is a total loss and what it’s worth, you will sign over the title and send it to the company. Typically, the company will then pay the lienholder first. If you owe less than the car is worth, you will get the difference.
*️⃣ If you plan on buying a used car, read our tips before you buy.
In some instances, you may have the option to keep your car — this is called owner retained salvage. With this option, the company deducts the amount they would get for selling the car as salvage from your claim payment.
The company is required to notify the state that your car is a total loss, and you kept the car. Texas law requires certain steps to be taken before the car is driven on the road again. Visit the Texas Department of Motor Vehicles (TxDMV)’s website for more information.
*️⃣ Keep in mind that a car with a salvage title is worth less and might be harder to sell and insure in the future.
If you disagree with the insurer about the value of your car:
You may disagree with the amount the insurer decides your car is worth. You can try to negotiate with the company to change the amount they will pay you for your car. Ask how they determined what your car is worth and make sure all the information used to calculate that value, such as options, mileage, condition, and any deductions, is correct.
You can also get quotes from used car dealers and view prices online for similar vehicles. Remember that the asking price is typically more than the car will sell for.
If you have custom parts, upgrades, or recent maintenance, the company probably won’t pay more. However, you can still submit receipts for consideration because some things such as a rebuilt motor can add value.
If you can’t come to an agreement on the value of your car, you have other options. You can ask to speak to a claims supervisor or request appraisal. If you think the company has treated you unfairly, you can also file a complaint with the Texas Department of Insurance (TDI).
If you disagree with the insurer that your car is a total loss:
You may also disagree that your car is a total loss and want to repair it. If this is the case, and your car is repairable, let the insurance company know ASAP. Be aware that many insurance policies include language that allows the company to decide if your car is a total loss. In some instances, you may have the option to keep your car — this is called owner retained salvage. With this option, the company deducts the amount they would get for selling the car as salvage from your claim payment.
*️⃣ If you are going to repair the car, keep in mind that the repair estimate is just an estimate and often additional damage is found once the repairs begin. If the repairs cost more than what you were paid, you will be responsible for the additional amount. Also, a car with a salvage title is worth less and might be hard to sell and insure in the future.
The company is required to notify the state that your car is a total loss, and you kept the car. Texas law requires certain steps to be taken before the car is driven on the road again. Visit TxDMV’s website for more information.
If you can’t come to an agreement on the value of your car, you have other options. You can ask to speak to a claims supervisor or request appraisal. If you think the company has treated you unfairly, you can also file a complaint with TDI.
*️⃣ To learn more about auto insurance, visit The Basics, Shopping Guide, and Know Your Rights sections of our website.