Total Loss Vehicle: What It Is and How To Protect Yourself


In serious accidents, it often becomes pretty apparent if a vehicle will be totaled, but there are other instances that aren’t always so clear. A total loss vehicle takes on its designation and when it does, it can affect your insurance claim, the vehicle’s title, and your options. It can also become a financial burden if you are not prepared.

Understanding what it takes to declare a vehicle totaled can help drivers in Texas make informed decisions when dealing with an insurance claim, purchasing a vehicle, and just trying to make sense of it all in the aftermath of an accident. Learn more about total loss vehicles and how to protect yourself.


What Does Total Loss Vehicle Mean?

After an accident, when a vehicle costs more to repair than it does to replace, it’s considered a total loss vehicle. Such vehicles are also often referred to as being totaled. Auto insurance in Texas can help you protect against such losses.

Drivers need to understand that on top of the costs to repair, your insurance carrier will also take into consideration the cost of providing you a rental car while your vehicle is in the shop as well as take into account how much they would receive if the vehicle were sold as salvage.

Your options after a total loss will depend on a mix of personal factors and your insurance coverages. But the continued increase in the cost of labor and materials is meaning the threshold for having a totaled vehicle is becoming wider and wider.


Is a Vehicle Totaled if the Airbags Deploy?

Airbags deploying alone do not indicate whether or not a vehicle is totaled. It all comes down to cost and while more severe accidents will often feature deployed airbags, smaller accidents can also trigger these safety features.


How Much Hail Damage To Total a Vehicle?

In Texas, the total loss threshold for a vehicle being declared totaled is 100%, meaning it’ll cost more to restore it than to replace it. But it’s difficult to say exactly how much hail damage would total a vehicle because each vehicle is different in features and the cost it would take to repair it.

A vehicle that isn’t high in value may receive a smaller amount of damage, but it could still be enough to declare it a total loss vehicle because the parts and labor would surpass its value.

Another vehicle may incur a significant loss but its value could be higher than the cost to repair, therefore, it would not be considered a totaled vehicle.

Then again, luxury and high-valued vehicles can rack up expective repair bills even with more minor incidents because there are specialty parts and labor involved in restoring them to normal.

Situations may vary but the criteria remain the same. If the cost to repair your vehicle exceeds the amount to replace it for your insurance carrier, your vehicle will be declared totaled.


Buying a Total Loss Vehicle With a Clean Title

A total loss vehicle with a clean title is an oxymoron, we’re afraid to report. You can’t buy a total loss vehicle with a clean title because a total vehicle will lose its clean title in the aftermath of the accident it was involved in.

This misconception is often attributed to people mixing up the idea of a clear title and a clear title. Learn the difference before you end up buying a total loss vehicle unknowingly:

  • When a vehicle has a clean title, it will have never been in an accident causing it to become totaled.
  • Vehicles with a clear title are automobiles lacking a financial lien which might prevent the vehicle from being sold.

Knowing the difference can help you plan accordingly and buy vehicles with an informed party. Sometimes such mix-ups can be a miscommunication, however, beware that sellers could be mixing these terms as a way to sell you a vehicle that has had serious damage in its lifetime.


How Does a Total Loss Work on a Financed Vehicle?

Dealing with a total loss vehicle on a financed vehicle can lead to different places for different drivers. The reason for this boils down to the type of coverage you have with your auto insurance policies and who causes the accident. Let’s break down the different scenarios drivers might face:


Liability Coverage & Collision Coverage

Drivers with both liability and collision coverages can protect against losses to their vehicles. But how your collision coverage reimburses you depends on your policy:

  1. If you have a policy with actual cash value (ACV), then you’ll receive a payment equal to the difference between your vehicle’s replacement cost value and depreciation.
  2. Replacement value collision coverage will pay you enough to replace your vehicle.

Both of these scenarios will only play out after you have paid your deductible and some costs may still exist following a wreck.

Collision coverage works regardless of who is at fault, so, either way, you would be protected with this level of protection.

Additionally, a popular multi-policy approach known as “full coverage” will combine liability, collision, and comprehensive coverages into one. Comprehensive covers the vehicle for things other than a collision i.e. hail, theft, fire, etc.  As a term of your loan, it is often required that drivers maintain full coverage for its duration.


Liability, Collision, and Gap Insurance

The biggest key here is understanding gap insurance in Texas. Remember, with liability and collision alone, some expenses may remain as you still may owe a note for either your totaled vehicle or a more expensive note with your replacement vehicle.

Gap insurance helps drivers mitigate such expenses even further by stepping in and paying for the remainder of their note after an accident. Even if you are at fault, gap coverage will reimburse you after an accident.


Can You Dispute a Total Loss Vehicle in Texas?

No, in general, the determination of whether or not you have a total loss vehicle after an accident will be out of your hands. Disputes aren’t a viable option for drivers in Texas because of state laws and regulations for auto insurance companies.

However, you can dispute the value of your vehicle during the process. According to the Texas Department of Insurance (TDI), you’ll need to prepare to provide this in the following ways:

  • Show disparities by getting quotes from used car dealers.
  • Use online prices and comparable pricing from similar vehicles advertised in your area.
  • Be sure to note the value of any custom or special features for your vehicle.

If negotiations fail even after bringing in such data, you can pursue legal routes, however, these are often costly and time-consuming.


Can You Insure a Total Loss Vehicle in Texas?

Many auto insurance carriers won’t insure vehicles with rebuilt or salvaged titles, however, that doesn’t mean you can’t find affordable coverage. If anything, this is a prime example of when one of the secrets to finding cheap auto insurance comes in handy.

Drivers in Texas will need to shop around and compare rates to not only find a company willing to insure their vehicle but also to save money and gain vital coverage they may need.

There is no shortage of car insurance companies willing to insure a total loss vehicle, but without comparison shopping, you can’t be sure that you aren’t overpaying for your coverage.

Conducting due diligence for any driver is important, particularly if you are looking to insure a vehicle that has been totaled previously.


How To Protect Against a Total Loss Vehicle


Having a totaled vehicle can be a disaster. Not having your means of transportation can affect your work life, social life, and any other aspect of your life. When it comes to walkable cities in the U.S., Texas doesn’t fare well and all drivers need to be aware of this fact.

Financially, you’ll have to deal with getting a rental vehicle, replacing your vehicle, purchasing a new one, or repairing your vehicle, should you choose that route.

Drivers would do well to also remember that just because your vehicle is deemed a total loss, doesn’t mean that your note goes away. One of the worst feelings in the world is having to pay for a vehicle that can no longer be used all while needing to purchase another form of transportation.

All of these scenarios can deliver unwarranted stress to your life and excess hurdles you’ll need to clear. Having the right car insurance policies can help you mitigate these losses and the team at Freedom Insurance Group is ready to help.

We work with more than 25 top-rated insurance carriers allowing our clients to not only enjoy more insurance solutions but also better savings. By comparing your coverage needs among our network, we can deliver the best coverage at the lowest cost for your protection.

Everyone needs liability coverage to stay legal in Texas but we also help drivers protect themselves with options including gap insurance. Through bundling and discounts, we provide personalized coverage and apply the best savings to your policy.

Drivers in Texas save 40% on average when switching to Freedom Insurance Group. Give us a call today or use our free, online auto insurance quote tool to learn how much you can save on your coverage.

Contact Us

Freedom Insurance Group
3861 Long Prairie Rd Ste 110
Flower Mound, TX 75028
Phone: (972) 798-3769


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