insure logo

Why you should trust

quality icon

Quality Verified

At, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria.

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 regulationsLaws 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.


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.