How to know if a Car is a Total Loss?

If your car has suffered a strong impact in an accident, it could be considered a total loss, although this will not always be the case. What does it depend on then? How to know if a car is a total loss?

In this article we will explain it to you.

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How to know if a car is a total loss

Generally, the process is as follows:

The first step in determining if a car is a total loss is to calculate its actual cash value (ACV) . But what is ACV? It is the actual value of the vehicle after taking depreciation into account.

On average, vehicles depreciate more than 20 percent the first year and about 10 percent each additional year for the first five years, according to Carfax data .

After that, the insurance company will estimate the market value of the car , based on the make, model and year, mileage and condition. It will also take into account the demand for that type of vehicle in the area.
Another factor used to estimate car value is the resale value of parts and metal. This is known as the salvage value.

If the cost of the repairs plus the salvage value equals or exceeds the ACV of your car before the accident, then it is declared a “total loss.”

Cars are typically totaled when damages exceed 65% to 70% of the vehicle’s market value. However, this can vary by insurance company and depending on some state regulatory factors.

Many states use a Total Loss Formula: The cost of the repairs plus the salvage value of the car must equal or exceed the pre-accident value of the car.


When we say that a car has been totaled, it means that it has been considered a total loss. Both terms mean the same thing.

Is a flooded car a total loss?

The insurance company will follow the same procedure as described above to determine if a flooded car is a total loss.

The company will not pay for repairs if they exceed the threshold that has been established to total the vehicle.

Depending on how much water has entered your car, and where, the damage could be serious.

A flood can cause problems with the car’s engine, electrical system, air bags, or other major components. A small flood can cause rust, mold and other problems.

Your insurance company will likely try to repair the vehicle if it appears to have only minor damage. However, the car may be a total loss if a mechanic checks it out and finds more damage.

Listen to the mechanic’s opinion on whether or not the car should be repaired. If he says the repair shouldn’t be done and your car wasn’t totaled, you should talk to the insurer again.

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Estimate your total car insurance payment

If you’ve been in an accident with your car, you may need to file a claim with your insurance.

If your car is labeled as totaled, it’s because the insurer has calculated that it would cost much more to repair the damage than to buy a similar car.

There is a procedure to follow to determine the amount of your auto insurance claim. If you want to do it on your own, follow these steps:

1. Get car information

The first thing you should do is write down the car’s year, model, and make . All of this information is in the owner’s manual. Also check the mileage of your car, you will be able to see it behind the wheel.

The less mileage you have, the more likely you are to get a higher value. It is also important to include information about other accidents the car has had , if it hasn’t, this will help as well.

2. Check the value

Once you know the features of your car, you can look up its approximate value through Kelley Blue Book , the National Association of Automobile Dealers, or Edmunds.

It is advisable to compare the prices on all these sites so that you can get the average value of your car.

During this investigation, you can also include any kind of extras that have been added to your cart, this should increase its original value. Items like stereo speakers and CD players;

for example, can lower the total loss.

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3. Perform the calculation

To the base price you found by averaging the combination of Kelley Blue Book, the National Automobile Dealers Association and Edmunds, add the values ​​of the various improvements you’ve made to the car.

After adding everything up, you should have pretty much the same estimate from the insurer. This means that you will receive in cash a figure very similar to this if your car is considered a total loss.

IMPORTANT: While you’re doing all of this, it’s important that you contact your insurance company and let them know of any improvements you’ve made to the car.

This is very likely to influence their calculations, and therefore the price they will pay for your car.
If the car is totaled but you can still drive it, all you need is a salvage title to get it back on the road.

How to know if a car is a total loss: frequently asked questions

Will the insurance company replace my car with a new one?

Not unless your company offers guaranteed replacement cost coverage on new cars.

Without this coverage, your company is only required to pay you the actual cash value of your car less the collision deductible . This cash value will be enough for you to buy a similar car.

Will my check be issued for the full amount?

If you own the car, you will receive the payment in a couple of days. If the car is rented, the full amount will go to the leasing company.

If you bought the car with a car loan and you haven’t paid it off yet, the amount owed will go to the finance company or to the bank and the rest to you.

Can I keep and repair my totaled car?

If you’ve been thinking about keeping your car after it’s been considered a total loss, you’re not alone. Sometimes, due to sentimental attachment, people want to buy and repair their cars after the accident.

However, before the owner takes possession of the car, the adjuster must take into account several factors.

First, you need to find out if state law allows it, and then you need to contact the salvage yard to find out what the fair market value of the car is.

Once the market value has been determined, it must be deducted from your settlement so that you can recover your car along with the salvage title.

With this title you will not be able to register your car until you make all the necessary repairs.

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Keep in mind that the stress and cost of repairing a total loss vehicle is enormous.

However, knowing the terms, state laws and the process to follow in this type of procedure will help you better manage the situation.

How to know if a car is a total loss: Summary

Your insurance company may decide your car is a total loss if:

  • cannot be repaired safely,
  • The repairs would cost more than the car is worth, or
  • State law requires the company to consider it a total loss based on the amount of damage.
    This can range from 50% of the car’s pre-accident value in Iowa to 100% in Texas.
    Typically, this is called the total loss threshold.

Many states use a Total Loss Formula: The cost of the repairs plus the salvage value of the car must equal or exceed the value of the car before the accident.

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