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If your car has been declared a "total loss," what does this mean, and what are your options?

your options for a totaled car Coping with the aftermath of a serious accident can be very stressful, especially when trying to deal with your insurance company and the loss of your vehicle. However, knowing the right questions to ask, and having a realistic understanding of the situation, can be very helpful. 

It's time to learn how to talk with your claim adjuster about a total loss. Here's what you're likely to face if your car has been totaled in an accident.

  • Your insurance company may decide your damaged car is totaled if repairs would cost more than the car is worth.
  • The condition of the body, interior and tires, and other additional parts or equipment you've added will help the insurance company to determine the cost of your car.
  • Usually, a damaged car is auctioned at a salvage yard, but you can keep it if permitted by state laws.
  • Your car insurance rates will spike up if you are at fault in the accident.

When is a damaged car considered a total loss?

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

  • It cannot be repaired safely
  • Repairs would cost more than the car is worth, or
  • State laws require the company to call it a total loss due to the amount of damage. This can vary from 50% of the car's pre-accident value in Iowa to 100% in Texas. This often called a total loss threshold. Many states use something called a Total Loss Formula: the cost of repairs plus the scrap value of the car must equal or exceed the car's pre-accident value.

Below you'll see total loss thresholds and Total Loss Formulas by state.

StateRuleLawWhat you should know
ALABAMA75%Ala. Stat. § 32-8-87(d)Damage to vehicle is greater than 75% of fair retail value prior to damage. Vehicle is “salvage” when (1) frame or engine removed and not immediately replaced, or (2) when insurer has paid a total loss on vehicle. Insurer buys the vehicle from insured for the FMV of the salvage and then applies to the state for salvage title.
ALASKATotal Loss Formula (TLF)Duty of insurance company obtaining title to unrepairable vehicle.Cost of repairing damage to the vehicle exceeds vehicle’s worth or insured value. No statutory definition of “salvage vehicle.” Vehicle is “wrecked vehicle” when so disabled that can’t be used for primary function without substantial repair or reconstruction. Insurance company which “totals” vehicle must mark the word “junk” on the title and surrender the title to the state. This is true for either an “actual total loss” or a “constructive total loss.”
Alaska Admin. Code tit. 2, § 92.170.
ARIZONATotal Loss Formula (TLF)A.R.S. § 28-2091(T)(4)Insurer determines if it is uneconomical to repair vehicle. It then is a salvage vehicle.
ARKANSAS70%A.C.A. § 27-14-2301(6)(B)Damage to vehicle greater than 70% of fair retail value prior to damage or vehicle is water damaged.
CALIFORNIATotal Loss Formula (TLF)Martinez v. Enter. Rent-A-Car Co., 13 Cal. Rptr.3d 857 (Cal. App. 2004).A vehicle is a total loss where the cost of repair exceeds the vehicle value prior to the repair of the vehicle.
Cal. Veh. Code § 544.“Total Loss” means either of the following:
Cal. Veh. Code § 11515(a) A vehicle, other than a non-repairable vehicle, that has been damaged to the extent the insurance company considers it uneconomical to repair, and is not repaired; or
(b) A vehicle determined to be uneconomical to repair, for which a total loss payment has been made by an insurer, whether or not the vehicle is subsequently repaired, if prior to or upon making the payment, the insurer obtains the agreement of the claimant to the amount of the total loss settlement, and informs the client that, pursuant to subdivision (a) or (b) of § 11515, the total loss settlement must be reported to the DMV, which will issue a salvage certificate for the vehicle.
California defines a salvaged vehicle as one that has been either totally destroyed or damaged beyond what the insurance company is willing to pay to fix it, so the owner never gets the vehicle repaired. Depending on its condition, one of several things may happen to the car.
The first of these is that the title is exchanged for a Salvage Certificate issued by the DMV.
COLORADO100%C.R.S. § 42-6-102 (17)(C)Cost of repairing vehicle exceeds retail fair market value. Retail value is determined by sources accepted by the insurance industry, which is usually when cost of repair exceeds market value.
CONNECTICUTTotal Loss Formula (TLF)C.G.S.A. § 38a-353Insurer must use NADA average and one additional approved source and constructive total loss is when cost to repair or salvage damage equals or exceeds the total value. Once declared “total loss” by insurer it is a “salvage vehicle.”
DELAWARETotal Loss Formula (TLF)21 Del. C. § 2512Insurer determines if vehicle is a total loss. It is then transferred as “salvage vehicle.”
DISTRICT OF COLUMBIA75%D.C. Code § 50-1331.01(12)(A)Damage to vehicle exceeds 75% of retail value prior to the damage. No salvage law in D.C.
FLORIDATotal Loss in Florida involves when and under what circumstances a salvage title is required. “Salvage” means a motor vehicle or mobile home which is a total loss. A vehicle is a total loss when:F.S.A. § 319.30(1)(t)However, carrier can declare vehicle a total loss depending on whether they believe settling for total loss requires less money than cost of repair. It is a business decision. If insured and insurer agree to repair, rather than replace, vehicle is not total loss. However, if actual cost to repair exceeds 100% of replacement cost, vehicle must be branded “Total Loss Vehicle.” Therefore, vehicle can be repaired up to 100% of ACV before branding of title is required by statute. The “80%” simply means that if the cost to repair a damaged vehicle is 80% of its value or more, then if the vehicle is declared a total loss by the insurance company, that the salvage title returned on the salvage will be a “Certificate of Destruction” in the insurer’s name and not eligible to be rebuilt.
Insured Vehicle: When carrier pays the owner to replace the vehicle with one of like kind or when it makes payment upon theft of vehicle.F.S.A. § 319.30(3)(a)(1)(a)(b)Insurance company does not have to “total” a vehicle if the costs of the repairs exceed 80% of ACV. The statute doesn’t require it, but most companies used it as a rule of thumb.
Uninsured Vehicle: When the cost, at the time of loss, of repairing or rebuilding the vehicle is 80% or more of the cost of replacing the damaged motor vehicle with one of like kind.
GEORGIATotal Loss Formula (TLF)Ga. Code Ann. § 40-3-2 (11)Vehicle is damaged to the extent that its restoration to an operable condition requires replacing two or more major component parts.
HAWAIITotal Loss Formula (TLF)Haw. Rev. Stat. § 286-48Insurer determines if a vehicle is repairable or whether it is a total loss, and must have material damage to vehicle’s frame, unitized structure, or suspension system, and cost of repairing damage exceeds market value.
IDAHOTotal Loss Formula (TLF)Idaho Code § 49-123(2)(o)Cost of parts and labor minus the salvage value makes it uneconomical to repair or rebuild.
ILLINOISTotal Loss Formula (TLF)625 I.L.C.S. § 5/3-117.1(b)Insurer determines when vehicle is salvage/total loss. Must not be from hail damage or a vehicle that is nine model years or older. Vehicle is “salvage” when insurer makes total loss payment.
INDIANA70%I.C. § 9-22-3-3Cost to repair vehicle is greater than 70% of fair market value prior to damage or the insurer determines it is impractical to repair and makes total loss payment.
IOWA50%I.C.A. § 321.52(4)(d)Damage disclosure requirements kick in at 50%. If cost to repair vehicle is greater than 50% of ACV then the vehicle must have a damage disclosure on the title and it becomes “wrecked or salvage vehicle.”
KANSAS75%K.S.A. § 8-197(b)(2)(B)Cost to repair vehicle is 75% more than the fair market value at the time immediately before it was wrecked.
KENTUCKY75%K.R.S. § 186A.520(1)(a)Cost of parts and labor to rebuild vehicle to pre-accident condition exceeds 75% as set forth in NADA price guide.
LOUISIANA75%La. R.S. § 32:702(13)Damage equivalent to 75% or more of the market value as determined by NADA.
MAINETotal Loss Formula (TLF)29-A M.R.S. § 602(19)Vehicle is “salvage” when insurer declares it a total loss or salvage title is issued. Owner transfers vehicle to insurer due to damage or owner determines it has no marketable value.
MARYLAND75%Md. Code, TransportationCost to repair vehicle exceeds 75% of the fair market value.
§ 11-152 (a)(1)
MASSACHUSETTSTotal Loss Formula (TLF)M.G.L.A. 90D § 1Insurer determines if it is uneconomical to repair the vehicle and the vehicle is not repaired.
MICHIGAN75%M.C.L.A. §257.217c(2)(b)(i)If cost of repair, including parts and labor, is between 75% and 91% of the actual cash value, then a salvage title is given. It then is a “distressed vehicle.”
MINNESOTA80%M.S.A. § 168A.151(b)(c)(3)Damage to late model vehicle (newer than six-years-old) or high value vehicle (over $5,000) exceeds 80% of its actual cash value.
MISSISSIPPITotal Loss Formula (TLF)M.C.A. § 63-21-33Vehicle cannot be more than ten-years-old, have a value of less than $1,500, or damage that requires replacement of five or few minor components. Also, applies to vehicle which requires replacement of more than five minor component parts according to insurer.
MISSOURI80%Mo. Rev. Stat. § 301.010(51)(a)Vehicle less than six-years-old and if damaged exceeds 80% of the fair market value.
MONTANATotal Loss Formula (TLF)Mont. Code Ann. § 61-3-211Insurer determines if the vehicle is a total loss. It is “salvage vehicle” if insurer decides it is uneconomical to repair, considering parts and labor.
NEBRASKA75%Neb. Rev. Stat. § 60-171(6)(a)Late model vehicle damage exceeds 75% of the retail value at the time it was wrecked, damaged, or destroyed. “Late model vehicle” means a vehicle which has (a) a manufacturer's model year designation of, or later than, the year in which the vehicle was wrecked, damaged, or destroyed, or any of the six preceding years.
NEVADA65%N.R.S. § 487.790(1)(b)Vehicle damage exceeds 65% of the fair market value.
NEW HAMPSHIRE75%N.H. Rev. Stat. Ann. § 261:22(VI)(b)Cost for vehicle repair is 75% or more of its fair market value prior to being damaged.
NEW JERSEYTotal Loss Formula (TLF)N.J.S.A. § 13:21-22.3Insurer determines if it is “economically impractical” to repair vehicle or cost of repairs is higher than the market value of the vehicle.
NEW MEXICOTotal Loss Formula (TLF)N.M.S.A. § 66-1-4.16(C)Insurer determines if it is uneconomical to repair vehicle.
NEW YORK75%15 NYCRR § 20.20(c)(ii)Cost for repair of vehicle made in 1973 or older is 75% or more of retail value prior to being damaged by a nationally recognized compilation of retail values.
NORTH CAROLINA75%N.C.G.S.A. § 20-71.3(d)Cost for vehicle repair is 75% or more of its fair market value prior to being damaged. Any vehicle totaled by insurance company must have title and registration card marked, “Total Loss Claim.”
NORTH DAKOTA75%N.D.C.C. § 39-05-20.2Vehicle damage exceeds 75% of retail value of vehicle determined by NADA. Glass and hail damage are excluded.
11 N.C. Admin. Code 4.0418
OHIOTotal Loss Formula (TLF)Ohio Rev. Code Ann. § 4505.11(C)(1)Insurer determines if it is economically impractical to repair vehicle.
OKLAHOMA60%47 Okla. Stat. Ann. § 1111(C)(1)Cost to repair damage to vehicle exceeds 60% of fair market value.
OREGON80%O.R.S. § 801.527(3)Damage to vehicle is equal to or more than 80% of retail market value.
PENNSYLVANIATotal Loss Formula (TLF)75 Pa. Cons. Stat. Ann. § 102Extent of repairs to vehicle would exceed the value of the repaired vehicle. Doesn’t include antique or classic cars.
RHODE ISLANDTotal Loss Formula (TLF)R.I.G.L. § 31-46-1.1Insurer decides if a vehicle is totaled, there are two classifications, A and B. A is the vehicle is good for parts only and B is the vehicle is repairable.
SOUTH CAROLINA75%S.C. Code Ann. § 56-19-480(G)Cost of repairing the vehicle exceeds 75% of the fair market value of the vehicle.
SOUTH DAKOTATotal Loss Formula (TLF)S.D.C.L. § 32-3-51.19Insurer or self-insurer determines a total loss.
TENNESSEE75%T.C.A. § 55-3-211(9)(A)Damage to vehicle equal to or more than 75% of retail market value as determined by current published retail costs.
TEXAS100%Tex. Transp. Code § 501.091(15)If total cost of repairs exceeds ACV of vehicle, then it is a salvage vehicle.
UTAHTotal Loss Formula (TLF)U.C.A. § 41-1a-1005Insurer makes decision whether a vehicle is declared a non-repairable vehicle. Or, two or more major components suffer major damage.
VERMONTTotal Loss Formula (TLF)Vt. Stat. Ann. Tit. 23, § 2001(14)Insurer makes decision whether a vehicle (less than 10-years-old) is declared a total loss.
VIRGINIA75%Va. Code Ann. § 46.2-1602.1Cost to repair late model vehicle exceeds 75% of ACV prior to vehicle being damaged, then vehicle is issued a non-repairable certificate or a salvage certificate.
WASHINGTONTotal Loss Formula (TLF)R.C.W.A. § 46.04.514Insurer determines whether cost of parts and labor plus salvage value has made it uneconomical to repair and vehicle must be more than six-years-old.
WEST VIRGINIA75%W. Va. St. § 17A-4-10(a)Cost to repair vehicle is greater than 75% of market value determined by a nationally accepted used car value guide.
WISCONSIN70%Wis. Stat. § 342.065(1)(c)Damage exceeding 70% of fair market value will render vehicle less than seven model years old a salvage vehicle. This only applies “If the vehicle is less than 7-years-old, is damaged by collision or other occurrence to the extent that the estimated or actual cost, whichever is greater, of repairing the vehicle exceeds 30% of its fair market value and was transferred to an insurer upon payment of an insurance claim.”
Wis. Stat. § 342.06(1)(hr)
WYOMING75%Wyo. Stat. § 31-2-106(v)For vehicle to be in pre-accident condition, labor to rebuild and parts exceed 75% of ACV of vehicle.

Source: These materials and other materials promulgated by Matthiesen, Wickert & Lehrer, S.C. may become outdated or superseded as time goes by. If you should have questions regarding the current applicability of any topics contained in this publication or any publications distributed by Matthiesen, Wickert & Lehrer, S.C., please contact Gary Wickert at gwickert@mwl-law.com. This publication is intended for the clients and friends of Matthiesen, Wickert & Lehrer, S.C. This information should not be construed as legal advice concerning any factual situation and representation of insurance companies and\or individuals by Matthiesen, Wickert & Lehrer, S.C. on specific facts disclosed within the attorney\client relationship. These materials should not be used in lieu thereof in anyway.

How does the claim adjuster decide how much my car is worth?

your options for a totaled car

Your adjuster will make note of your mileage, the condition of the body, interior and tires, and any additional parts or equipment you've added. (Receipts are always helpful.) Based on the pre-accident condition of your car, your adjuster will find similar models that are for sale in your area and will base the total loss estimate on these comparable cars. This is called the Actual Cash Value (ACV) of your car.

In addition, you can collect the cost of sales tax, title and registration in 34 states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New  York, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin. Even if you live in a state that doesn't require this payment, you should ask for it.

Ask your adjuster for the details of the specific cars that are for sale or were recently sold. If you feel that your car is worth more, explain why, or try to find a car for sale that's a better match to your car. Ask how to recoup the costs of sales tax, title and registration on the replacement vehicle.

Will the insurance company buy me a new car?

If your car is very new -- say, less than three months old -- most major insurance companies will replace it with a new car.

But beyond that point, some companies offer guaranteed replacement coverage at an extra cost, so you don't have to worry about how much you'll be paid—it will cover a new car. 

If you don't have this coverage, your company is required to "make you whole," as defined in your policy. This means your company will pay you the actual cash value of the car -- what it was worth the minute before it was totaled -- minus the deductible for the collision coverage on your policy.

An insurance company is not obligated to pay off your loan, only to pay you what your car was worth -- even if that leaves you thousands of dollars in debt. For that reason, many buyers add gap insurance to their coverage; it will pay off the balance due to the lender if (and only if) the car is totaled.

Ask your adjuster to explain the details of the total loss worksheet, so that you understand the full calculation, including how the deductible is subtracted from the total. Your payment should be enough to buy a car that's comparable to your old one.

How soon will I get a check?

Most companies will issue payment within a few days of finalizing the actual cash value. If you leased the car, payment goes directly to the leasing company. If you financed the car, the payoff amount goes to the finance company or bank and you get the rest. Of course, if you owned the car yourself, you get the full check.

Ask your adjuster when you can expect payment—and, if your company had given you a temporary rental car, ask how long you'll be allowed to keep it. Your adjuster should give you a reasonable amount of time to find a new car.

Can I keep my car and repair it myself?

Usually a damaged car is auctioned at a salvage yard and the insurance company keeps the proceeds of this sale. If you want to keep your damaged car, and it's permitted by state law, your company will get bids from salvage buyers to set the fair market value on the salvage—and will deduct this amount from your settlement.

Many states require the title to be changed to a "salvage title," which means you will not be able to register for plates until you complete the repairs and apply for a new title.

Ask your adjuster about the salvage laws in your state and then decide if it makes sense to keep your car and repair it. While your company may call it a total loss, it may be priceless to you.

You might not be able to buy collision and comprehensive coverage on a rebuilt-title car, though, as its value is hard for an insurance company to pin down.

How much does insurance go up after an accident?

You've just had a hands-on lesson in the value of car insurance. If your company didn't measure up, it's time to consider a change.

An at-fault accident will drive up your car insurance rates, whether you stay with your old company or find a new one. But no two companies view claims the same way.

Insurance.com commissioned Quadrant Data Services to analyze rates from six major insurance carriers after accident claims. Here are average rate increases for common accident claims, as well as for comprehensive claims for damage to your car from hail, flooding, vandalism, fire and animal collisions:

Accident or comp claimAverage % increaseAverage $ increase
1 At-fault bodily injury accident32%$459
1 At-fault property damage accident over $2K31%$450
1 At-fault property damage accident under $2K26%$366
1 comprehensive claim for over $2k3%$39
1 comprehensive claim for under $2k3%$39
2 At-fault property damage accident over $2k110%$1,572
2 comprehensive claims for over $2k8%$121

If the accident was your fault and your rates go up, you want to compare car insurance quotes from multiple providers to ensure you're receiving the best rate available.  For instance, you'll see below how much rates vary by insurance company after an accident claim -- and how much you can save.

Cheap car insurance companies for accidents

Based on Insurance.com's rate analysis, Geico is the cheapest car insurance  company for drivers with a recent accident claim. Here is how car insurance companies rank on price for those with an accident on their record.

Property damage under $2K$1,570$1,815$1,789$2,050$2,005$1,830$2,678$3,138$4,024
Property damage over $2K$1,578$1,815$1,816$2,050$2,450$2,523$2,631$3,138$4,024
Bodily injury$1,593$1,815$1,827$2,050$2,329$2,523$2,861$3,138$4,974
2 property damage accidents over $2k$2,507$2,374$3,743$2,626$3,391$3,195$4,235$5,902$5,299

By subtracting the lowest rate from the highest, you can see below how much you can potentially save by comparing rates after an accident, based on Insurance.com's data.

  • At-fault bodily injury -- $3,381
  • At-fault property damage under $2,000 – $2,454
  • At-fault property damage over $2,000 -- $2,446
  • Two at-fault property damage over $2,000 -- $2,792

Victoria and Foremost specialize in insurance for high-risk drivers, so it’s not surprising that rates are among the highest for those companies after an accident claim. If you were to calculate average savings for standard car insurance companies in the chart above, the saving would be as follows:

  • At-fault bodily injury – $1,268
  • At-fault property damage under $2,000 -- $1,108
  • At-fault property damage over $2,000 -- $1,053
  • Two at-fault property damage over $2,000 -- $1,861

Before you start shopping, understand how to compare car insurance.

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