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Does the Insurance Company Have to Give Me a Rental Car if My Car is Totaled?

One question we’re frequently asked is, “If my car is a total loss from the wreck, does the insurance company have to provide me with a rental car?”

One of our car accident lawyers, Bruce Roberts, is here to answer this important question.

Unfortunately, in Texas, insurance companies do not necessarily have to give you a rental car if your car is deemed a total loss. Texas law states that if your car is repairable and has to go into the shop to be fixed, the insurance company must provide you with a rental vehicle. However, if your car is deemed a total loss, they are only required to pay you the fair market value of the car plus tax, title, and transfer fees, but not a rental car.

Understanding Total Loss in Texas

In Texas, a vehicle is considered a total loss if the cost to repair the vehicle exceeds the vehicle’s actual cash value (ACV) minus the salvage value. The Texas Department of Insurance provides guidelines on how insurance companies determine whether a vehicle is a total loss.

Your Rights and Options

When your vehicle is declared a total loss, the insurance company must compensate you for the vehicle’s fair market value. This includes:

• Fair Market Value: The amount your vehicle would have sold for on the open market just before the accident.
• Sales Tax: The applicable sales tax for the fair market value.
• Title and Transfer Fees: Fees associated with transferring ownership.

However, Texas law does not require the insurance company to provide a rental car in total loss situations. This can leave many drivers in a difficult position, especially if they rely heavily on their vehicle for daily activities.

When Must Insurance Provide a Rental Car?

When Insurance Must Provide a Rental Car

If your car is repairable and is in the shop for repairs, the insurance company must provide you with a rental car. This is covered under your policy’s rental reimbursement provision, provided you have opted for this coverage. This allows you to have a temporary replacement vehicle while your car is being fixed.

When Insurance Does Not Have to Provide a Rental Car

If your vehicle is deemed a total loss, the insurance company is not required to provide you with a rental car. A vehicle is typically considered a total loss if the cost to repair it exceeds its actual cash value minus the salvage value. In such cases, the insurer’s obligation is to compensate you for the fair market value of your vehicle, including sales tax, title, and transfer fees, but not for rental car expenses.

Understanding Rental Reimbursement Coverage

Rental reimbursement coverage is an optional add-on to your auto insurance policy that can provide a rental car when your vehicle is being repaired after an accident. Here are some key points about this coverage:

• Limits: The coverage typically comes with daily and total maximum limits. For example, it might cover up to $30 per day with a maximum of $900 per claim.
• Activation: This coverage is only activated if your vehicle is being repaired due to a covered claim. If your vehicle is declared a total loss, this coverage does not apply, and you will need to arrange for alternative transportation at your own expense.

Practical Steps

• Review Your Policy: It’s essential to understand the specifics of your auto insurance policy. Check if you have rental reimbursement coverage and what the limits are.
• Communicate with Your Insurer: If your vehicle is repairable, confirm with your insurance company the details of how they will provide the rental car and for how long.
• Consider Add-Ons: If you don’t already have rental reimbursement coverage, consider adding it to your policy for added peace of mind in future incidents.

What to Do If You’re in Dispute

If you find yourself in a dispute with the insurance company regarding the status of your vehicle, it is crucial to seek legal assistance. An experienced attorney can help you navigate the complexities of insurance claims and ensure that you receive fair compensation.

Our team of car accident lawyers is ready to assist you. We can help you understand your rights, negotiate with insurance companies, and, if necessary, represent you in court to ensure you get the compensation you deserve.

For more information on Texas auto insurance laws and your rights, you can visit the Texas Department of Motor Vehicles and the Texas Insurance Code.

Why Choose Us?

Choosing the right legal representation can make all the difference in your case. Here’s why you should consider our law firm:

• Expertise: Our attorneys specialize in personal injury and car accident cases, bringing years of experience to your case.
• Dedication: We are committed to fighting for our clients’ rights and ensuring they receive the compensation they deserve.
• Results: We have a proven track record of successful outcomes for our clients.

If you’re dealing with an insurance company that refuses to provide a fair settlement, don’t hesitate to reach out. Contact our car accident lawyers today to schedule a consultation.