To the best of our knowledge a vehicle can be declared a total loss if the hail damage caused enough damage to a vehicle that the insurer finds it uneconomical to fix it in Texas as in other states. However we contacted both the TX DOT and Texas Department of Insurance to find out if a car could be totaled from hail damage in this particular state.
In Texas jurisdiction regarding salvage vehicles rest with the Department of Transportation (TXDOT).And the TX DOI of course has information on the insurance code and regulations regarding the totaling out of a vehicle from an insurance claim.
The TX DOI responded that any vehicle can be totaled if the cost of repair exceeds the vehicle's actual cash value (ACV), or exceeds the insurance company's measure to declare a total loss. Each insurance company establishes a percentage of damage in comparison to the ACV of a vehicle. If the measurable damage, from hail damage, an accident, etc, meets or exceeds the set percentage the company will automatically declare a total loss.
In the process of settling a claim an insurance company can make two different offers. The insurer can pay out the ACV to the owner of the hail damaged vehicle that has been declared a total loss and disposes of the vehicle or the insurer pays out the ACV minus the salvage value of the vehicle and the owner keeps the car. This latter choice is referred to as "retaining the salvage" or buying back from the insurance company however it does not mean that the car now has a salvage title.
Both the TX DOI and TX DOT noted that the rules for salvage vehicles are found in the Texas Transportation Code. Chapter 501, title 501.091 defines non-repairable and salvage titles. Here a Salvage motor vehicle is defined as a motor vehicle (regardless of the model year) that:
(1) is damaged or is missing a major component part to the extent that the cost of repair including parts and labor, exceeds the actual value of the motor vehicle immediately before the damage, or
(2) is damaged and comes into this state under an out-of-state salvage motor vehicle certificate of title or similar out-of-state ownership document that states on its face "accident damage," "flood damage," "inoperable," "rebuildable," "salvageable," or similar notation; and
(3) does not include:
(a) an out-of-state motor vehicle with a "rebuilt," "prior salvage," "salvaged," or similar notation, a nonrepairable motor vehicle;
(b) a motor vehicle for which an insurance company has paid a claim for the cost of repairing hail damage;
(c) a motor vehicle for which an insurance company has paid a claim for theft, unless the motor vehicle was damaged during the theft and before recovery to the extent that the cost of repairs exceeds the actual cash value of the motor vehicle immediately before the damage;
(d) the cost of materials or labor for repainting the motor vehicle; or
(e) sales tax on the total cost of repairs.
A nonrepairable motor vehicle is a motor vehicle (regardless of the model year) that:
- is damaged, wrecked, or burned to the extent that the only residual value of the vehicle is as a source of parts or scrap metal; or
- comes into this state under a title or other ownership document that indicates that the vehicle is nonrepairable, junked, or for parts or dismantling only.
So while a car can be found to be total loss due to hail damage, the state of Texas does not find it to be a salvage vehicle or grant it a salvaged title due to only hail damage.
If you need more information on insurance laws regarding how vehicles are declared to be a total loss in Texas contact the TX Department of Insurance. As for information on salvage titles and salvage vehicles and branded titles in Texas contact the TXDOT.
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