Texas House passes bill to allow automatic issuance of salvage titles to flood damaged vehicles

HB 2112 by Rep. Ed Thompson (R-Pearland) allows the Department of Motor Vehicles to automatically issue a salvage vehicle title to vehicles that insurance companies have deemed a total loss due to water damage.

The vehicle owner is required to apply for a salvage title if the vehicle is retained after the insurance company determines that it is a nonrepairable or salvage vehicle. If the owner fails to do so, the vehicle may be sold to a buyer who is unaware of the previous water damage. After Hurricane Harvey, many flooded vehicles were sold to unsuspecting buyers. The bill addresses these issues by providing for the automatic issuance of a salvage vehicle title and by further defining what constitutes a flood vehicle.

If the entity is a lienholder in possession of the vehicle under Chapter 54, 59, or 70, Property Code, or Chapter 2303, Occupations Code, they must apply to the department for the appropriate title in accordance with Section 501.097 before offering the vehicle for public sale.

Following the unanimous vote of approval by the House, the bill was reported from the Senate Transportation Committee and is set for consideration by the full Senate.

Contact Jeff Huffman, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.