After an Austin car accident, the company insuring the at-fault driver usually must pay for repairs to the vehicle.
When an Austin auto collision results in major damage to a vehicle, sometimes the insurance company declares that an automobile is totaled.
The term totaled stands for total loss.
It means the cost to repair your vehicle is more than the value of your vehicle right before the accident.
Under Texas Transportation Code Section 501.091(15), insurance companies can declare a vehicle is totaled (or is a salvage vehicle) when it is so damaged (or missing an important component) that the cost of repairing it is more than the actual cash value of the vehicle before the accident.
In the case of Canal Ins. Co. v. Hopkins Towing, the Texas Court of Appeals ruled that an insurance company can declare a vehicle is a “total loss” if:
The Court’s ruling restates the Texas law that a damaged vehicle can be considered totaled if repairing it costs more than the vehicle was worth before the accident.
Texas Transportation Code Section 501.091(15)(a) states that the cost of repairing the vehicle includes:
However, under the Texas Transportation Code, the repair costs do not include sales tax.
The Texas Transportation Code states that a vehicle is totaled if fixing it costs more than the car is worth. But insurance companies do not have to follow this.
In Texas, insurance companies can declare a vehicle is totaled, even when repair costs are less than its actual cash value.
If you were in an Austin auto accident and the insurance company says your vehicle was totaled, you can accept their decision.
If your vehicle is totaled, insurance companies will usually offer to pay you what they decide is the actual cash value (also called the fair market value) of your vehicle at the time it was damaged.
There are several Texas laws that determine how a damaged vehicle’s actual cash value is decided.
Insurance companies and Texas law defines actual cash value as the value of the vehicle (purchase price), minus any loss in value, known as depreciation.
In the case of U.S. Fire Insurance Co. v. Williams, the Texas Court of Appeals stated that the term actual cash value (used in Texas laws) is the same as fair market value.
After an Austin auto accident, if a vehicle is totaled, the owner may be able to receive money from the at-fault driver (or that driver’s insurance company.)
The insurance company or court sets the value of the totaled car at the time of a car accident. This includes the automobile’s depreciation in value.
After you purchase a car, its value begins to go down.
Even a used automobile that has not been driven much usually cannot fetch the actual purchase price of a new vehicle:
When an insurance company or court determines the purchase price of a vehicle at the time of a car accident, this will be reduced by the vehicle’s depreciation. The insurance company may consider:
Actual cash value is almost always less than the amount you purchased the car for, especially if you purchased it new. The longer you have owner the vehicle, the higher its depreciation (the less it is worth under the law.)
You usually cannot include any special or sentimental value of the automobile. It will be valued at the price that someone else would have paid for the car before the accident.
If you do not believe your automobile should be declared totaled, you can either:
After an Austin auto accident, if you want to try and repair a vehicle the insurance company determined was totaled, you should notify the insurance company.
The insurance company will usually subtract the salvage value of the vehicle from the amount of money the insurer is paying for your property damage.
Salvage value is the amount of money the vehicle is worked if it was scrapped and salvaged for its parts and materials.
If you repair a vehicle the insurance company declared was totaled, the vehicle may be issued a salvage title.
Salvage titles are a special kind of vehicle registration in Texas with limits on how it can be sold. It can be difficult to sell a vehicle with a salvage title in Texas.
If the vehicle has been properly repaired, you can apply for a proper title to replace the salvage title. In Texas, this is usually known as a rebuilt vehicle.
If you were in an Austin auto collision and want to challenge the insurance company’s valuation of your vehicle in court, under Texas law you can file a lawsuit to recover for the damage caused by the at-fault driver.
Winning a lawsuit or even negotiating a settlement usually requires understanding:
This is not easy to do on your own. You may want to speak with an Austin auto accident attorney before trying to negotiate with the insurance company.
If you were in an auto accident in Austin and suffered a property loss like a severely damaged vehicle, speak to an Austin personal injury attorney at Justinian & Associates to understand and protect your rights.
The Austin auto accident lawyers at Justinian & Associates have represented hundreds of injured victims in a position similar to yours. We know the system, and will fight to make sure you receive all the compensation you are entitled to under the law.
Call, text or email us for a free consultation with a seasoned Austin personal injury attorney. Tell us your story, and we will explain your options under Texas state law and Medicare regulations. There is no obligation.
And unless we get you money for your injuries, you owe us nothing. Your rights can be lost if you wait. Call us for a free consultation.