Texas Car Accident Property Damage Guide

Two men arguing after a car accident in Cypress TX

Basic Property Damage Information

This guide aims to address common inquiries about your rights and the expected procedures with insurance companies concerning your property damage claim. Dealing with a property damage claim following a motor vehicle accident can be challenging, necessitating your immediate attention and proactive measures. It is advisable to capture photographs of the property damage whenever possible.

Typically, when an accident is caused by another individual, their insurance company is responsible for covering all expenses related to your property damage claim. However, this reimbursement often occurs after the availability of the police report, which may take 30 to 90 days. If you possess collision insurance coverage, there might be instances where you are required to utilize it to address the costs linked to your property damage claim. In such cases, your deductible would need to be paid when retrieving your vehicle from the repair shop. In the event of a total loss, if you have a deductible, it will be subtracted from the check issued to cover the vehicle’s value.

Resolving a property damage claim can take one of two routes:

  1. Repairs are conducted on the vehicle.
  2. The vehicle is deemed a total loss. a. In instances where the cost of repairs surpasses the actual value of the vehicle. b. In total loss scenarios, the Fair Market Value (FMV) of the vehicle is determined and offered as a settlement for the property damage claim.

Setup the Claim

To begin the property damage claim process, you must set up the claim with either the at-fault driver’s insurance carrier or your own insurance carrier. In some cases, involving your own insurance becomes necessary, particularly if you maintain collision and/or rental car coverage. If the at-fault driver’s insurance company acknowledges liability, the property damage claim can be established through their insurance. However, if you have collision coverage on your own policy and encounter uncooperative behavior from the at-fault driver’s insurance, opting to have your insurance company handle the property damage claim is often a faster, easier, and more convenient solution. When utilizing your collision coverage, you will typically be required to cover the collision deductible.

If the at-fault driver is uninsured, the recourse is to use your own collision coverage, and you will be responsible for the associated deductible.

**It’s crucial not to be pressured into providing a recorded statement to the other insurance carrier to facilitate your collision claim. This request can be a tactic to potentially establish fault against you, and exercising caution is paramount.

Mitigation of Damages in Texas

In Texas, mitigation of damages refers to the legal obligation of individuals to take reasonable steps to minimize or prevent the escalation of potential losses or expenses resulting from a particular event or situation. This duty is based on the principle that individuals should not needlessly incur costs that could have been reasonably avoided. In accordance with Texas law, individuals are obligated to actively mitigate (avoid incurring unnecessary monetary expenses) all damages. This responsibility extends to various actions, including but not limited to promptly removing your vehicle from a storage or tow facility that charges fees and returning any rental vehicle in a timely manner.

Mitigation of damages can apply to various situations, including but not limited to:

  1. Vehicle Damage: If your vehicle has been damaged in an incident, you are expected to take prompt action to mitigate damages. This may include timely removal of the vehicle from storage or tow facilities that charge fees. Failing to do so could result in the imposition of additional costs for which you may be held responsible.
  2. Rental Vehicles: If you are provided with a rental vehicle as part of an insurance claim or legal settlement, there is an expectation to return the rental vehicle in a timely manner once it is no longer required. Keeping the rental vehicle longer than necessary may be considered a failure to mitigate damages, potentially leading to financial consequences.
  3. Property Damage: In situations involving property damage, individuals are generally expected to take reasonable steps to prevent further damage or loss. This may include securing damaged property or initiating repairs to prevent additional deterioration.

Failure to fulfill the duty to mitigate damages in Texas may have consequences, and individuals could be held responsible for unnecessary expenses that could have been avoided through reasonable actions. It’s essential to be aware of and comply with these obligations to mitigate potential financial liabilities.

Towing/Storage Fees

  • If your vehicle was towed from the accident scene, it was likely taken to a private storage lot that imposes daily fees. These fees can accumulate rapidly, resulting in potential out-of-pocket expenses for you.
  • The responsible party’s insurance or your own insurance, provided you have collision coverage, should cover reasonable towing and storage charges. It is important to retain all receipts and submit them to the relevant insurance company for reimbursement.
  • In cases where the at-fault driver is uninsured or their insurance company denies liability, and you lack collision coverage, you assume personal responsibility for settling the fees to release your vehicle from the storage lot. This responsibility remains regardless of your perceived fault in the accident, as Texas law mandates a duty to mitigate (reduce) damages. If your vehicle remains in a fee-charging storage lot for an extended period, it may become challenging to recover these fees from any insurance company. Additionally, if the vehicle stays in the lot for 30 days or more, you risk losing ownership of your vehicle to the storage facility.

Rental Vehicle

In the event of a motor vehicle accident where liability is undisputed, you can secure a rental vehicle either through the at-fault party’s insurance carrier or your own carrier, provided you have rental coverage on your policy. This option is available while your vehicle undergoes repairs or while the fair market value (FMV) for a total loss is determined.

  • It’s important to note that the insurance company typically does not cover any additional insurance associated with the rental vehicle. Your existing insurance coverage should extend to the rental vehicle, but it’s advisable to contact your insurance carrier to confirm your specific coverages. If you lack collision coverage, you may be required to pay for additional insurance (such as Collision Damage Waiver or Liability Damage Waiver) on the rental vehicle, typically ranging between $8 and $20 per day. The insurance company’s obligation is to restore you to the position you were in before the accident, and if you did not have collision coverage previously, the law does not mandate its provision for the rental vehicle through CDW or LDW.
  • The payment method for the rental vehicle varies depending on the insurance company’s policy. Some employ the direct bill method, where the insurance company pays the rental car company directly. Others operate on a reimbursement policy, meaning you pay for the rental vehicle, and the insurance company reimburses you. The rental car company usually requires a credit card to secure payment. Since insurance companies often have partnerships and discounts with rental car agencies, it’s advisable to inquire with the adjuster handling your property damage claim about the recommended rental vehicle provider.
  • Ensure the rental vehicle is returned in accordance with the insurance company’s instructions to avoid non-reimbursable out-of-pocket rental expenses. In cases where obtaining a rental vehicle is delayed or not utilized, compensation for the “loss of use” of your vehicle may be applicable for each day you are without it.

Total Loss

If the cost of repairing your vehicle exceeds its fair market value (FMV), the insurance company will categorize it as a total loss and offer you the FMV, also known as the Actual Cash Value (ACV). Determining the FMV involves computerized searches by insurance companies, considering similar vehicles advertised on local websites, private owner listings, and evaluations by local dealerships. Upon receiving a total loss offer, you have the option to either accept it or present evidence supporting a higher value for your vehicle. Additionally, you are entitled to recover prorated licensing fees and sales tax on the total loss value.

For older vehicles, recent repairs may be challenging to recover in the total loss settlement. While major improvements like new tires or an engine may have a minimal impact on the vehicle’s value, providing receipts for such enhancements to the insurance company could potentially result in a higher total loss offer. Scheduled maintenance and common repairs generally do not increase the vehicle’s value.

It’s crucial to note that the FMV remains unaffected if you are “upside down” on your vehicle loan, meaning you owe more than the vehicle’s fair market value. In such cases, the insurance company is only obligated to pay the FMV, and if you owe more, you are responsible for the difference. If you find yourself in this situation, exploring options with your finance company, such as rolling over the balance into a new loan, may be considered.

When accepting a “total loss” settlement, the insurance company acquires your vehicle. If you wish to keep the wrecked vehicle, you can repurchase it from the insurance company at its salvage value. The adjuster deducts the salvage value from the total loss settlement, allowing you to retain ownership.

Salvage Title and Restored Salvage Title Information

To retain a salvaged vehicle, the registered owner must obtain a Salvage Title (for an inoperable vehicle) or both a Salvage Title and a Restored Salvage Title (for an inoperable vehicle or one restored to operable condition). These titles, issued by the Department of Motor Vehicles, inform potential buyers of the vehicle’s history as a total loss.

To obtain a Salvage Title for a non-operable vehicle, the registered owner must provide the following to the Department of Motor Vehicles:

  1. The vehicle’s title (properly endorsed).
  2. A lien release from the lien holder, if applicable.
  3. The vehicle’s registration certificate or card, if applicable.
  4. Photo identification.
  5. The vehicle’s license plates (or a notarized statement if lost or stolen).
  6. The appropriate fee.

For a vehicle that can be driven or repaired, a Restored Salvage Title must be obtained after repairs. This involves a physical inspection to confirm roadworthiness and submission of the appropriate fee. Once restored, a temporary operating permit allows the vehicle to be brought to the Department of Motor Vehicles for the final physical inspection before the issuance of the actual Restored Salvage Title.

In Texas, obtaining a Salvage Title or a Restored Salvage Title for a vehicle involves specific processes and requirements. Here’s an overview of the information and steps related to Salvage Titles and Restored Salvage Titles in Texas:

Salvage Title Explained:

  • Inoperable Vehicle:
    • If the vehicle is not operable or not intended for future operation, the registered owner must take the following items to the Department of Motor Vehicles (DMV):
      • The vehicle’s title (properly endorsed).
      • A lien release from the lien holder, if applicable.
      • The vehicle’s registration certificate or card, if applicable.
      • Photo identification.
      • The vehicle’s license plates.
      • If there are no plates, the owner must supply a notarized statement stating that the plates were lost or stolen.
      • The appropriate fee.
  • DMV Process:
    • The DMV issues a Salvage Title for the inoperable vehicle, indicating that it has been declared a total loss.

Restored Salvage Title Explained:

  • Repair and Inspection:
    • If the vehicle can be driven or repaired to operable condition, a Restored Salvage Title must be obtained after repairs.
    • The vehicle needs to undergo a physical inspection to confirm its roadworthiness.
  • Temporary Operating Permit:
    • Once the vehicle is restored to an operable condition, the registered owner obtains a temporary operating permit.
  • DMV Inspection:
    • The vehicle is then brought to the DMV for a physical inspection to confirm roadworthiness.
  • Restored Salvage Title Issuance:
    • Following the successful inspection, the DMV issues the actual Restored Salvage Title.

Important Considerations:

  • Documentation:
    • Ensure you have all required documentation, including the properly endorsed title, lien release (if applicable), registration certificate, photo identification, and license plates.
  • Fees:
    • Be prepared to pay the appropriate fees associated with obtaining either a Salvage Title or a Restored Salvage Title.
  • Compliance:
    • Adhere to the regulations set by the DMV to comply with the state’s requirements for salvage and restored salvage vehicles.
  • Vehicle History Disclosure:
    • Both Salvage and Restored Salvage Titles serve as indicators of the vehicle’s history as a total loss. This information is disclosed to potential buyers to make them aware of the vehicle’s past.

Always check with the Texas Department of Motor Vehicles to ensure that you are following the most up-to-date and accurate procedures for obtaining Salvage Titles and Restored Salvage Titles in Texas.