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Texas insurance glossary

Total loss

A vehicle is a total loss when the cost to repair it, sometimes with the salvage value added, meets or exceeds what the vehicle was worth before the damage.

Sources checked

The insurer pays the actual cash value rather than the repair bill, takes the vehicle, and the vehicle’s title changes: a totalled car in Texas goes to a salvage title, and a repaired one to a rebuilt title.

Two things follow that surprise people. The settlement is measured against the car’s value, not the loan, so a financed vehicle can leave a balance behind. And the deductible still comes out of it.

A total loss is a coverage outcome, not a description of the wreck. Cars that look drivable are totalled every day, because the threshold is economic.

Sources: TDI — home insurance glossary; TDI — automobile insurance guide (CB020). Verified .

A definition, not legal advice and not a quote. Rules and figures change; confirm your own situation against the source named above, or with us, before you act on it. Last checked .

See also

  • Actual cash value Actual cash value is what a vehicle was worth immediately before it was damaged, which is its replacement cost reduced by depreciation for age, mileage and condition.
  • Salvage title A salvage title is the Texas ownership document for a vehicle damaged badly enough that its repair cost approaches its value, or brought in on an out-of-state salvage document.
  • Rebuilt title A rebuilt title is the Texas title issued for a salvage vehicle that has been repaired and inspected, branded so that the history stays with the vehicle.
  • Gap insurance Gap insurance pays the difference between what a totaled vehicle was worth and what is still owed on it, where the loan balance is the larger number.
  • Diminished value Diminished value is the amount a vehicle is worth less after an accident than it was worth before it, even once the repair has been completed properly.

Where this is handled

Knowing what a coverage is called is not the same as knowing what is on your policy. One independent agency can read your declarations page with you and compare the markets that will write your record.

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