Home Car insurance Total warfare: What to do when your auto insurer totals your car Total warfare: What to do when your auto insurer totals your car Written by: Michelle Megna Michelle Megna Michelle, the former editorial director, insurance, at QuinStreet, is a writer, editor and expert on car insurance and personal finance. Prior to joining QuinStreet, she reported and edited articles on technology, lifestyle, education and government for magazines, websites and major newspapers, including the New York Daily News. | Reviewed by: Penny Gusner Penny Gusner Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s. | Updated on July 19, 2021 Why you should trust Insure.com Quality Verified At Insure.com, 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. Your car suffered major damage in an accident. Now what? Do you buy a new one? Do you have it repaired? In most cases, that’s a decision that will be made by your car insurance company. If you disagree, you can try to work out a deal to pay for repairs. If you can’t agree, you can fight your insurer — but get yourself familiar with the claims process first. If the cost of repairing your vehicle exceeds a certain percentage of your car’s value before the accident, insurance companies will declare it a “total loss.” Some car insurance companies will total a vehicle if damages are at or above 51% its pre-accident value. Other insurers will total at 80%. State insurance departments often set guidelines for the percentage at which cars can be totaled. More specifically, your insurer will weigh the cost of repairs plus reimbursement expenses for a rental car against the car’s actual cash value. For example, your insurance company may declare your 15-year-old Buick a total loss if it suffers minor damage because the car’s value is already low and repairs are expensive. At the same time, major damage to a brand-new Lexus might not make it a total loss. Auto insurance claims adjusters usually determine a car’s actual cash value by using their company’s proprietary database of values. A car generally is considered to be a total loss when the estimated cost of repair plus the salvage value equals or exceeds its actual cash value. If the insurance company totals your car, it will pay you the car’s actual cash value, minus your deductible, and your car is then sent to a salvage yard to be auctioned off to the highest bidder and usually chopped up for parts. The insurance company keeps whatever money it got for the car in salvage. But there are exceptions, since claims are handled on a case-by-case basis in accordance with state regulations. Key Takeaways If you want to keep your totaled car inform your claims adjuster and insurer right away. Also, you will have to pay for the repairs yourself. To get your car back at the auction, you will require a special license for auto salvagers or auto dealers to attend the auction. You can also hire an independent appraiser to ensure you’re getting a fair assessment for your vehicle. If your totaled car hasn’t passed the motor insurance department test the insurance department may refuse to cover it. Options for keeping your totaled car What if you really love your car and you don’t want them to take it away? Maybe you don’t agree with your insurance company’s assessment of the damages. You have options on how to keep a totaled car, but they are limited. When you buy a car insurance policy, you sign a contract that states that you can’t force your insurer to pay out more than your car is worth. On the other hand, most states require insurance companies to follow the “made whole” doctrine, meaning you should be restored to the same financial position you were in prior to the accident. In 2018, about 19% of collision and liability claims in the United States resulted in the cars being totaled, according to CCC Information Services, a company that tracks auto claims for the insurance industry. Total loss frequency has increased about 1% year-over-year since 2013. This is primarily due to people driving older cars longer and rising repair costs that are increasing faster than vehicle values. If your car is declared a total loss but you want to have it repaired anyway, you should be able to retain it. Can your insurer decide to total your car despite your protests? In some cases, your insurer will work with you if you “elect to retain salvage” in accordance with their policy language and state law. Your insurer still has to pay you the car’s actual cash value, minus the deductible and minus what the company would have gotten for it at the salvage yard. If you want to keep the car, you should alert your claims adjuster and insurance company right away. You’re then going to have to pay for the repairs yourself. Make sure you think your decision through. If you decide to give up your car but then you change your mind, you’re going to have a hard time buying it back at auction. Can I buy my totaled car at auction? In most states, your car is gone for good once it goes to auction. Regulations vary, but in many places you won’t be able to attend the auction without a special license for auto salvagers or auto dealers. It’s good to call the auction house beforehand to see if you will need a license in order to bid on your car. If you do get your car back from your insurer, you’ll be left with a badly damaged car and perhaps only a fraction of the money needed to repair it. If the car is really beyond repair, you’ll be left with a carcass of a car and a check that’s not quite enough to buy you a new one. Totaling Tips You may be entitled to claim the costs of sales tax, title and registration fees when you buy a replacement car after yours is totaled. For more, read about recouping expenses after your car is totaled. What if the insurance check for your totaled vehicle is less than what you owe? To avoid being in the red, save yourself some grief and buy gap coverage when you purchase a new car. If the car is repairable, make sure you have all the necessary work done. Insurers can refuse to completely cover a car that’s been totaled if it hasn’t passed a department of motor vehicle (DMV) inspection — often a necessary step in getting your car back on the road. As long as it passes DMV inspection, however, you should have no problem buying insurance. Do I have to take the total loss settlement from my insurance company? People who complain about their total loss settlements generally don’t want their old, crashed cars back. Instead, they complain that their insurers didn’t give them enough money to buy a similar car. Your insurance company’s estimate of what a comparable car will cost may differ from your estimates. Your insurance company will look at many variables, such as the value of your car in its pre-accident condition, logged mileage, special equipment and features, and local market prices for that year, make and model. If you disagree with the insurance company’s assessment of your vehicle, you can hire an independent appraiser at your own expense to perform an inspection of your vehicle (contact a local body shop or garage to find one). Be sure to get a detailed inspection put in writing. Then present that information to your insurance company. If you still can’t come to an agreement on value, contact a consumer representative at your state’s department of insurance. This representative should investigate your case and can help you resolve the differences with your insurer. If you’ve exhausted all these measures with no satisfactory results, you have two options: arbitration or litigation. But before you decide to hire an independent appraiser, or even pursue the matter in court, you should weigh whether the fight to get more money for your vehicle is worth it. Total loss thresholds laws by state Here are the laws governing total loss thresholds in each state. This research was compiled in January 2020 by the law offices of Matthiesen, Wickert & Lehrer, S.C., which operates out of Hartford, New Orleans, Austin and Los Angeles. Enter a state in the search field to see the laws for that state. State Rule Law What you should know ALABAMA 75% 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. ALASKA Total 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. ARIZONA Total 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. ARKANSAS 70% 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. CALIFORNIA Total 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. COLORADO 100% 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. CONNECTICUT Total Loss Formula (TLF) C.G.S.A. § 38a-353 Insurer 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.” DELAWARE Total Loss Formula (TLF) 21 Del. C. § 2512 Insurer determines if vehicle is a total loss. It is then transferred as “salvage vehicle.” DISTRICT OF 75% 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. COLUMBIA FLORIDA Total 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. GEORGIA Total 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. HAWAII Total Loss Formula (TLF) Haw. Rev. Stat. § 286-48 Insurer 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. IDAHO Total 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. ILLINOIS Total 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. INDIANA 70% I.C. § 9-22-3-3 Cost 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. IOWA 50% 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.” KANSAS 75% 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. KENTUCKY 75% 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. LOUISIANA 75% La. R.S. § 32:702(13) Damage equivalent to 75% or more of the market value as determined by NADA. MAINE Total 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. MARYLAND 75% Md. Code, Transportation Cost to repair vehicle exceeds 75% of the fair market value. § 11-152 (a)(1) MASSACHUSETTS Total Loss Formula (TLF) M.G.L.A. 90D § 1 Insurer determines if it is uneconomical to repair the vehicle and the vehicle is not repaired. MICHIGAN 75% 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.” MINNESOTA 80% 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. MISSISSIPPI Total Loss Formula (TLF) M.C.A. § 63-21-33 Vehicle 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. MISSOURI 80% Mo. Rev. Stat. § 301.010(51)(a) Vehicle less than six-years-old and if damaged exceeds 80% of the fair market value. MONTANA Total Loss Formula (TLF) Mont. Code Ann. § 61-3-211 Insurer determines if the vehicle is a total loss. It is “salvage vehicle” if insurer decides it is uneconomical to repair, considering parts and labor. NEBRASKA 75% 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. NEVADA 65% N.R.S. § 487.790(1)(b) Vehicle damage exceeds 65% of the fair market value. NEW HAMPSHIRE 75% 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 JERSEY Total Loss Formula (TLF) N.J.S.A. § 13:21-22.3 Insurer determines if it is “economically impractical” to repair vehicle or cost of repairs is higher than the market value of the vehicle. NEW MEXICO Total Loss Formula (TLF) N.M.S.A. § 66-1-4.16(C) Insurer determines if it is uneconomical to repair vehicle. NEW YORK 75% 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 CAROLINA 75% 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 DAKOTA 75% N.D.C.C. § 39-05-20.2 Vehicle damage exceeds 75% of retail value of vehicle determined by NADA. Glass and hail damage are excluded. 11 N.C. Admin. Code 4.0418 OHIO Total Loss Formula (TLF) Ohio Rev. Code Ann. § 4505.11(C)(1) Insurer determines if it is economically impractical to repair vehicle. OKLAHOMA 60% 47 Okla. Stat. Ann. § 1111(C)(1) Cost to repair damage to vehicle exceeds 60% of fair market value. OREGON 80% O.R.S. § 801.527(3) Damage to vehicle is equal to or more than 80% of retail market value. PENNSYLVANIA Total Loss Formula (TLF) 75 Pa. Cons. Stat. Ann. § 102 Extent of repairs to vehicle would exceed the value of the repaired vehicle. Doesn’t include antique or classic cars. RHODE ISLAND Total Loss Formula (TLF) R.I.G.L. § 31-46-1.1 Insurer 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 CAROLINA 75% S.C. Code Ann. § 56-19-480(G) Cost of repairing the vehicle exceeds 75% of the fair market value of the vehicle. SOUTH DAKOTA Total Loss Formula (TLF) S.D.C.L. § 32-3-51.19 Insurer or self-insurer determines a total loss. TENNESSEE 75% 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. TEXAS 100% Tex. Transp. Code § 501.091(15) If total cost of repairs exceeds ACV of vehicle, then it is a salvage vehicle. UTAH Total Loss Formula (TLF) U.C.A. § 41-1a-1005 Insurer makes decision whether a vehicle is declared a non-repairable vehicle. Or, two or more major components suffer major damage. VERMONT Total 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. VIRGINIA 75% Va. Code Ann. § 46.2-1602.1 Cost 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. WASHINGTON Total Loss Formula (TLF) R.C.W.A. § 46.04.514 Insurer 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 VIRGINIA 75% 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. WISCONSIN 70% 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) WYOMING 75% 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. 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 firstname.lastname@example.org. 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 to appeal total loss loss payouts Landing in a courtroom over a totaled-vehicle settlement isn’t very likely, but knowing your options is an advantage that consumer advocates continually stress. Knowing how the claims process works, as well as what to do when you are not satisfied with it, will get you the most for your insurance dollars. Arbitration is a process in which you and the insurance company present your facts to a third-party arbiter. Arbitration can be binding (which means the arbiter’s decision is final) or non-binding (meaning you can still take the insurer to court if you are unsatisfied). Generally, this process for settling a complaint is less of a hassle and less expensive than a lawsuit. However, if you choose to enter arbitration, it’s a good idea to hire a lawyer. Insurance companies are represented by lawyers and you may be at a disadvantage without one to represent you. Hiring an attorney may increase the odds of a satisfactory outcome for you, but it will cost you money.