How do insurers decide whether to total my car?

A car insurance company's decision to total a car depends on the extent of the damage following an accident. Car insurance companies take into account several factors when deciding whether to total your car, including:

• Repair estimates
• List value
• Salvage value
• State laws, if applicable

While each car insurance company approaches the decision differently, many insurers declare the vehicle a total loss if the estimated cost of repairs plus the salvage value equals or exceeds the car's actual cash value.

The actual cash value is a car's fair market value – or, replacement cost less depreciation. Adjusters typically determine a car's actual cash value by looking to their company's proprietary database of values.

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Some insurers total the car if repair costs exceed a certain percentage of the car's actual cash value. Common thresholds for totaling a vehicle are 51 percent or 80 percent of the value, at the insurer's discretion.

Some states impose guidelines for the percentage at which a vehicle can be declared a total loss.

Defending your interests

There are steps you can take to either challenge the insurance adjuster's determination or to reclaim the totaled vehicle.

Challenging list value. According to the Insurance Information Institute, the policyholder is entitled to the pre-accident market price of the car. The book value, based on the car's make, model and year, may understate your vehicle's market value. You can argue that your vehicle is worth more than the standard listed price by submitting service and mileage records, as well as affidavits from mechanics.

Disputing an insurance assessment. To dispute the claims adjuster's assessment, you may hire an independent appraiser, contact a consumer representative at the state's department of insurance or, as a last resort, pursue arbitration or litigation.

Reclaiming a totaled vehicle. Most insurers allow owners to retain a totaled vehicle. In this case, you could collect the car's actual cash value minus your insurance deductible and any salvage value your insurance company forfeits by returning the car to you.

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