What happens when my car is totaled?

The general principle is simple: when someone causes an accident, the insurance company for the at-fault driver is supposed to put you in the same financial position you were in before the accident.  Texas courts have interpreted this to mean that, when your car is totaled, you get the value of the car at the time of the accident.  Thus, the insurance company for the at-fault driver is supposed to appraise your car and pay you the car’s pre-accident value.  Unfortunately, this is usually less than what it will cost you to replace the car.  There are some car insurance companies that now sell replacement policies, so when your car gets totaled, you receive enough money to replace the vehicle (sometimes called “gap insurance”).  However, these policies are not standard, so if you want this kind of protection, you have to ask (and pay) for it.