Car Insurance How does an insurance company determine if a car is a total loss? View Carriers Please enter valid zip Compare top carriers in your area By Insure.com's Editor | Updated on May 25, 2023 The page is part of the topic how to keep your totaled car Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. Insurance companies determine if a car is a total loss when the cost of repairs exceeds a certain percentage of the car’s value. This evaluation involves several factors to decide the most cost-effective solution. Factors influencing total loss decision Repair costs – Insurers assess the cost of repairs by getting estimates from qualified mechanics. If repair costs approach or exceed a set percentage of the car’s value, it’s likely considered a total loss. Car’s value – Factors like age, mileage, condition, and market value determine the car’s pre-accident value (actual cash value or ACV). Safety and structural damage – Severe structural or safety damage might result in a total loss declaration, even if repair costs are below the threshold. State regulations – Laws in your state or country can affect the total loss determination process. The assessment process Damage evaluation – An adjuster inspects the vehicle’s damage and estimates repair costs. Comparison with value – Repair costs are compared to a predetermined percentage (typically 70-100%) of the car’s ACV. Decision and settlement – If repair costs exceed the threshold, the insurer declares it a total loss. You’re then offered a payment based on the ACV minus your deductible. Conclusion Understanding how insurance companies decide if a car is a total loss involves considering repair costs, the car’s value, safety concerns, and state regulations. Knowing these factors is vital to navigate the process more confidently in case of an accident. In case you missed it Best Car Insurance Companies of 2024 Car insurance rates by state in 2024 What is full coverage car insurance? How much does car insurance cost for seniors in 2024? A complete guide to adding a teenager to your car insurance policy in 2024 What to do after a car accident that’s not your fault Total warfare: What to do when your auto insurer totals your car Car insurance claims: Who gets the claims check? Used car insurance costs: Most and least expensive models to insure The Best Car Insurance for Bad Credit of 2021 The best car insurance companies for speeding tickets Car insurance after a DUI Guide to car insurance discounts Proper insurance coverage for college-bound children How to read actually understand your auto insurance policy Car Insurance Companies New driver insurance grace period: What you need to know How much do insurance agents make Autonomous cars: 5 delightful and 5 distressing things Busted! Part 1: How insurance companies spot bogus claims Insurance options for rideshare drivers 10 things that are illegal but shouldn’t be 1/1 On this page Factors influencing total loss decisionThe assessment processConclusion Get instant quotes now ! Please enter valid zip Get Quotes