The Texas Car Accident Law Guide: What is the Total Loss Threshold?

Key Takeaways

• Texas is an at-fault state, meaning the driver who causes an accident may be responsible for the damages.
• Texas uses a modified comparative fault rule, so you might still recover damages if you’re 50% or less at fault.
• A vehicle may be declared a total loss when repairing it no longer makes financial sense compared with its pre-accident value.
• Total loss insurance payouts are typically based on the vehicle’s actual cash value before the accident.
• You might be able to keep a totaled car in Texas, although its salvage value can reduce your settlement.
• After a total loss, you can generally use the remaining insurance money toward your next vehicle.

If you’ve ever been in a car accident, figuring out what to do next can be really confusing. Who pays for the damage? What happens if your car can’t be repaired? And what if you and the other driver can’t agree about who caused the crash in the first place? Texas auto accident laws help answer all these questions and determine how insurance claims are handled.

In general, Texas drivers are responsible for accidents they cause, and insurance can help cover vehicle damage, medical bills, and other accident-related expenses. However, the amount you can recover and how your claim is handled will depend on the circumstances of the accident and the specific insurance coverage involved. Keep reading, and we’ll break down some of the Texas car accident laws you’re most likely to encounter after a crash.

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Texas Auto Accident Laws

The state of Texas has several laws that can impact what happens after a car accident. Drivers must be able to show financial responsibility for accidents they cause, which most people do by carrying liability insurance. The minimum liability coverage in Texas is $30,000 for injuries to one person, $60,000 for injuries per accident, and $25,000 for property damage. This is commonly referred to as 30/60/25 coverage. 

Texas auto insurance policies also include certain protections unless you decline them in writing. These include Personal Injury Protection (PIP), which can help with medical expenses and lost income, and uninsured/underinsured motorist coverage, which can help if you’re hit by someone who doesn’t have enough insurance.

Texas law also gives drivers certain rights when dealing with an insurance claim. For example, you generally have the right to choose where your vehicle is repaired rather than being required to use a repair shop picked out by your insurance company. There are also rules that govern how insurers handle and respond to claims. Having an understanding of these basic laws can make it much easier to know what to expect when dealing with repairs, injuries, and insurance after a crash. 

Is Texas a No-Fault State for Car Accidents?

No, Texas isn’t a no-fault state when it comes to car accidents. Texas uses a fault-based system, which basically means the driver who causes an accident can be held financially responsible for the other driver’s injuries and property damage. In most cases, the injured driver can file a claim against the at-fault driver’s insurance.

Texas also follows a modified comparative fault rule. This means you might still recover compensation if you were partly responsible for the accident, as long as you were 50% or less at fault. However, your compensation can be reduced based on your percentage of responsibility. 

What Should You Do Right After a Car Accident in Texas?

Being in an accident can leave you understandably shaken and also confused about what to do next. Knowing the basic steps can keep everyone involved safe and make the insurance process easier as well.

1. Stop and check for injuries. Pull over somewhere safe if you can, turn on your hazard lights, and check yourself and your passengers for injuries.
2. Call 911 if necessary. If anyone is injured, the accident is serious, or the vehicles are creating a dangerous situation, call 911. Even when the injuries aren’t immediately obvious, having the accident documented can be helpful.
3. Exchange information. Get the other driver’s name, contact information, driver’s license number, insurance information, and vehicle details.
4. Take plenty of photos. Use your phone to get a picture of the vehicles, damage, license plates, road conditions, traffic signs, and the overall accident scene.
5. Talk to witnesses. If anyone saw what happened, ask for their name and contact information. Their account could become very important if there is a disagreement about who caused the accident.
6. Be careful about admitting fault. Stick to the facts when talking with the other driver, police, or insurance companies. You might not have all the information needed to know exactly what caused the crash.
7. Notify your insurance company. Report the accident as soon as reasonably possible and provide the information you’ve collected.
8. Keep records after the accident. Save any repair estimates, medical bills, towing receipts, rental car expenses, insurance correspondence, and other documents related to the crash. These records can make it much easier to keep track of your losses if you end up filing a claim.

Texas Underinsured Car Insurance Coverage

Underinsured motorist coverage can help when the driver who caused the accident has insurance, but not enough to pay for all your losses. For example, if your medical bills and other covered damage exceed the at-fault driver’s liability limits, your own underinsured motorist coverage might help cover some of the difference.

Texas insurance companies are required to offer uninsured/underinsured motorist coverage, although drivers can decline it in writing. The amount you can recover will depend on your policy limits and the specific circumstances of the accident.

Texas Car Accident Report Laws

While not every minor fender bender in Texas requires a formal crash report, the more serious accidents generally do. Here’s what you need to know:

• Call the police for serious accidents. You should contact law enforcement when someone is injured or killed, or when the accident involves significant property damage.
• The $1,000 rule applies to police reports. If an officer investigates a crash involving an injury, death, or at least $1,000 in apparent property damage to any one person, the officer is required to prepare a written crash report.
• The officer files the report. The investigating officer must submit the report to the Texas Department of Transportation within 10 days of the accident.
• Keep all your own records. Even if an accident doesn’t result in an official crash report, take photos, exchange information with the other driver, and document what happened. This information can end up being very useful when filing an insurance claim 

Guide to Texas Salvage Titles

What is the Texas Total Loss Threshold?

Texas doesn’t have one set percentage that automatically determines when a car is totaled. Under Texas law, a vehicle generally meets the definition of a salvage vehicle when the cost to repair it is greater than what the car was worth right before the accident. However, an insurance company may decide to total a car before repair costs reach its full value if fixing it simply doesn’t make financial sense.

How Is the Value of a Totaled Car Determined in Texas?

When a car is totaled in Texas, the insurance company generally looks at its actual cash value (ACV) right before the accident. This is essentially what the vehicle was worth at that time, rather than what you originally paid for it or what it would cost to buy a brand-new replacement.

To determine the value, insurers consider the vehicle’s age, mileage, condition, make and model, features, and the value of similar vehicles in the local market. If you think the insurance company’s valuation is too low, it’s a good idea to review the valuation report and look for comparable vehicles in your area that support a higher value.

Texas Insurance Appraisal Law

If you think your own insurance company has undervalued your car or isn’t offering enough for a covered loss, you might be able to request an appraisal. If your policy includes an appraisal clause, you and your insurer typically each choose an appraiser to determine the value of the loss. If the two appraisers can’t agree, a neutral umpire may be brought in to help settle the difference.

Keep in mind that the appraisal process generally applies to disagreements with your own insurance company and is used to determine how much a covered loss is worth. It doesn’t typically decide whether your policy covers the claim in the first place, and it generally isn’t an option for resolving a disagreement with the other driver’s insurance company.

How to Use an Insurance Check to Buy a Car

If your car is totaled, you can usually put the insurance money toward your next vehicle. Once any remaining loan balance on your totaled car has been paid and taken care of, you can use what’s left as a down payment or even buy another car outright if the settlement is large enough. 

Just keep in mind that your insurance payout is generally based on what your car was worth before the accident, not what it will cost you to replace it. So, if the car you want costs more than your settlement, you’ll need to make up the difference.

Understanding Texas Car Accident Laws

Dealing with a car accident is stressful enough without having to figure out Texas insurance laws, fault rules, repair costs, and total loss requirements all at once. Knowing what your car is worth, what your insurance might cover, and what options you have if your vehicle is totaled can make the whole process much easier.

Once the insurance claim is behind you, the next step is getting back on the road. If that means it’s time for a new vehicle, come see us at Tipton Hyundai in Brownsville. Our team can help you explore all your options, find a vehicle that fits your needs and budget, and make moving on from your old car as simple as possible. If you need a new vehicle, we have a huge selection of cars and trucks for you to choose from. We serve everywhere near the Brownsville area and the state of Texas, from San Benito to Corpus Christi and Houston. Plus, we can help you with all your auto mechanic needs as well. 

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Frequently Asked Questions About Totaled Cars in Texas

What is considered a total loss in Texas?

A vehicle may be considered a total loss when the cost to repair it is close to or greater than its pre-accident value. Insurance companies generally compare the vehicle’s actual cash value with estimated repair costs and may also consider its salvage value.

How is a total loss calculated in Texas?

Insurance companies typically determine the vehicle’s actual cash value immediately before the accident and compare it with the estimated cost of repairs. The vehicle’s age, mileage, condition, features, and local market value can affect the calculation.

Can you keep a totaled car in Texas?

Yes. You may be able to keep a totaled car in Texas. The insurance company will generally subtract the vehicle’s salvage value from your settlement, and Texas title requirements may apply before the vehicle can legally return to the road.

What will insurance pay for a totaled car in Texas?

Insurance generally pays the vehicle’s actual cash value before the accident, subject to the policy and any applicable deductible. If you still have a loan, the lender may be paid first.

Do you get sales tax, title, and registration fees with a total loss settlement in Texas?

Sales tax, title, and registration fees may be included in some Texas total loss settlements. What you’re entitled to can depend on the type of insurance claim, your policy, and the circumstances of the accident.

Can you use a total loss insurance check for anything?

Generally, if the settlement is paid directly to you and there are no lenders or other restrictions, you can decide how to use the money. If you still owe money on the totaled vehicle, the lender may need to be paid first.