What does it mean when a car is totaled in Texas?

What does it mean when a car is totaled in Texas?

The Texas Department of Insurance (TDI) describes how a car in Texas can be considered totaled. TDI says some companies might total a car even if the cost to fix it is lower than its value.¹ TDI says insurance companies pay for repairs or replacement of a car only up to its actual cash value.² TDI defines actual cash value as the cost to replace the car, minus depreciation.² TDI says that if the company totals a car, it pays the car’s value minus depreciation.² TDI describes when an insurance company will likely consider a car totaled this way:

If the cost to repair the car is about the same or more than the value of your car, the insurance company will likely consider it totaled.

What will an insurer pay for a totaled car in Texas?

Topic	What TDI says
Payout	The company pays the car’s value minus depreciation.2
Replacement with a new car	The company will not pay to replace the car with a new car that is the same make and model.2
A loan on the car	The payout might not be enough to pay off a loan on the car.2

Can an owner ask about or negotiate a totaled car’s value in Texas?

TDI says a policyholder can ask the insurance company what source it used to decide the car’s value.¹ TDI says a policyholder who thinks the car is worth more than the insurance company decided can try to negotiate.¹

What does TDI say when an owner keeps a totaled car in Texas?

TDI says that when an owner keeps a totaled car, the insurance company subtracts the car’s salvage value from the amount it was planning to pay.¹ TDI says that after the car is repaired, the owner needs a new title from the Texas Department of Motor Vehicles before driving it.¹

What the sources do not state

The sources used here do not state a fixed repair-cost percentage that makes a car totaled.

Next step

TDI explains totaled cars on its My car was totaled page. The filing lookup tool is where to look up filing details for a situation.