When we think about someone who has been in a car crash or automobile accident, we tend to focus on what their injuries were and what medical care they will need. Many Texans who have been in car crashes, however, find out that the worst part of the wreck was not their injuries. Instead, the worst part was settling their insurance claim for their vehicle (also known as a “property damage” settlement).

The law in Texas is not favorable to Texas motorists in disputes between the consumer and an insurance company over the damage to their vehicle in an automobile collision. The burden of proving whose fault the wreck was, the value of their car, and the extent of the losses are all on the consumer.

Many consumers are not familiar with the cost of repairs of an automobile or the replacement value of their vehicle. The insurance company, on the other hand, has trained adjusters who are specialized in handling nothing but property damage claims. 

Generally, the motorist’s primary concern is whether or not their vehicle is repairable, or it is going to be a total loss. However, the insurance company has many other issues to worry about before they even consider whether they are going to repair or replace your car.

Liability is first and foremost. Even if the police report shows that the insurance company’s driver was at fault, the insurance company will still argue that you are partially responsible for the collision. You failed to keep a proper lookout or failed to timely apply the brakes. If an insurance company only accepts 70 or 80 percent responsibility for the wreck, then they are only going to pay 70 or 80 percent of the cost to repair or cost to replace your vehicle. Many times, it can take days or weeks for the insurance company to determine whether or not they are accepting full responsibility or only partial responsibility.

The second problem generally arises when the insurance company is slow to accept responsibility for the car wreck.  If your car is wrecked and disabled, then it will probably be towed to a wrecker yard. The average wrecker yard fees per day for a car are $15.00 to $20.00.

When they do finally accept responsibility for paying for the cost of repairing or replacing the car, they may refuse to pay the storage fees. They will tell the motorist that it is their duty to move the car to minimize storage costs. If the insurance company’s investigation and decision to accept liability has been slow, the storage fees can be several hundred dollars. 

The other person’s insurance company has accepted full responsibility for the collision. What are their obligations to me?

The next thing to look at is whether your car is repairable or a total loss. Many people don’t understand the difference. Under Texas law, the test is what a reasonable person would do under the same or similar circumstances. If the cost of repairing the car is more than the car is worth, the law assumes that that the person would replace the car. If the cost of repairing the car is less than the fair market value of the car, the law assumes that person would repair it.

This is the same rule the insurance companies follow, except with some modifications. Most insurance companies will declare a car a total loss if the cost of repairing it is approximately 70% of the car’s fair market value. They do this because they know if the car is repairable they will have to pay rental costs, and there may be hidden damages.

Many consumers ask if they have any choice in this decision, and the answer is generally no. If the insurance company declares your car a total loss, then it’s your burden to prove that the cost of repairs is less than the fair market value. If the insurance company wants to fix your car and you want it totaled, then again it’s your burden to prove that the cost of repairs will be more than the fair market value.

Many consumers are upset if their car is severely damaged but not totaled. They feel that once a car has been damaged, it is never the same and therefore they do not want their car repaired nor do they want it back.  Unfortunately, this is not the law in Texas. If a mechanic feels they can repair your car back to its pre-collision state, then the insurance company has the right to have it repaired.

If the insurance company determines that your car is repairable, then what are your rights? Do you have the right to a rental? Can you pick where the car is repaired? Can you determine the parts that are used?  The answer is sometimes.

The insurance company has decided that my car is repairable. What are my rights now?

If your car is repairable, then the insurance company does owe you for the loss of use of your vehicle while it is being repaired. Some insurance companies will simply put you in a rental at their cost and have the rental company bill the insurance company directly. Other insurance companies will tell you to go to rent a car, and they will reimburse you what they think is the fair rental rate.

In renting a car, the insurance companies often insist that you rent the smallest and cheapest vehicle. This is not the law. You have the right to rent a vehicle that is equal to the vehicle that was damaged. If your car was a large SUV or a pickup truck, the insurance company cannot insist you rent a small car.

Motorists need to also be aware that the insurance companies are responsible for paying the costs of renting a car. If there are additional fees such that extended coverage that you choose to have, the insurance will not pay these.

If you choose not to rent a car, the insurance company still has to reimburse you for loss of use of your vehicle.  There is no requirement that you rent a car. If your car is repairable and you have lost the use of it, the insurance company owes you for that loss of use.  That loss is normally $20.00 to $30.00 per day.

Next, in selecting a repair shop, you have the right to determine where your car is repaired. However, you need to understand that the insurance company is only responsible for paying the costs of repairs. They are not responsible for making sure the repairs are done properly. The insurance company is not responsible if the repairs are not done well or to your satisfaction. It is, therefore, important that you select a reputable service facility.

In repairing your car, does the insurance company have to use the original manufacturer’s parts? The answer is no.  They can use after market or even used parts. The only right the motorist has is to say that he insists upon the insurance company using manufacturer’s original equipment, but he is responsible for the difference in cost between the original equipment and the parts chosen by the insurance company.

Now that the car is repaired, does that end the insurance company’s obligations with regard to the repairs? That will depend upon the facts and age of the car damaged.

Many times, if the damage is to a newer car, the consumer may be entitled to make a claim for diminished value. Diminished value means that even if the car is properly repaired, the value of the car has been diminished simply because it was in a collision. Many insurance companies object to this type of claim, but many courts have upheld it if the car is a newer car.

My car is a total loss.  What are my rights?

Unfortunately in Texas, once a car or any property is declared a total loss, the rights of the owner are limited. The only thing that the owner is entitled to recover is the fair market value of the vehicle plus tax, title, and license. This, in theory, allows the consumer to go out and buy a replacement vehicle.

Many consumers assume that the insurance company has the obligation or duty to replace their car. That is not the law in Texas. Once the insurance company pays what they believe is the fair market value, their obligation ends.  They have no duty to find a same or similar car for the consumer.

This can create many hardships for Texans. If a car owner has an older model vehicle with high mileage but is otherwise well maintained, the offer that they get for that vehicle may not allow him to buy another vehicle in the same mechanical condition. Instead, they may end up only being able to afford a used car that may or may not have been well-maintained.

Also, if the vehicle is a total loss, the insurance company does not have to provide the owner with a rental car.  The reason for this is that the legislature assumes that if a person’s car was a total loss, then the responsible insurance company would immediately come forward with a check for that consumer to purchase another vehicle and therefore no rental is necessary.

Unfortunately, as noted earlier, it may take days or weeks for the responsible insurance company to accept that responsibility. During that time, the owner of the totaled vehicle may be without any transportation.

The law is the same even if the vehicle is used for work. If the vehicle that is totaled is a commercial vehicle and the owner cannot do his job, the lost income or profits are not recoverable.

The one right a consumer has when his car or truck is declared a total loss is the right to keep the vehicle.    This normally occurs when an older model car or truck sustains body damage but is otherwise mechanically sound. In that circumstance, the owner can elect to retain his vehicle. This is called retaining the salvage. Normally after the vehicle is totaled, the insurance company will sell the car as salvage to recoup some of their losses. If the consumer elects to keep the vehicle, the insurance company will simply pay the consumer for the loss less what is considered the salvage value.

If you, or someone you know, have been injured in a car wreck and need an attorney to help with your property damage settlement, call Roberts & Roberts. We can help. The call costs you nothing… it could mean everything.

About The Author

Justin Roberts

Justin is a personal injury attorney at Roberts & Roberts. He focuses his practice on mass tort litigation, where he specializes in helping individuals who are harmed by recalled or unsafe pharmaceutical drugs and medical devices. Justin was named a “Rising Star” by Texas Super Lawyers in 2021, 2022, 2023, and 2024, and has been recognized as a “Top 40 Under 40” attorney by The National Trial Lawyers, The American Institute of Trial Lawyers, and The American Academy of Attorneys. He is a Fellow of the Texas Bar Foundation, a Fellow of The National Association of Distinguished Counsel, and a Member of the Texas Bar College honorary society.

See author's posts