Glossary

What Is Total Loss?

When an insurer decides repair costs exceed a threshold relative to the vehicle's value, so they pay ACV instead of fixing the car.

Definition

A total loss occurs when an insurance company determines that repairing your vehicle is not economical — usually when repair costs approach or exceed a percentage of actual cash value. The insurer then offers a cash settlement based on ACV rather than authorizing repairs.

Why it matters for your claim

Total loss settlements are negotiable. If the insurer's ACV offer is below what similar vehicles sell for in your market, you can dispute it with comparable sales data and condition documentation.

Total loss thresholds vary by state and insurer (often around 70–80% of ACV).
You do not have to accept the first settlement offer.
Salvage value deductions may apply if you keep the vehicle.
Gap between insurer offer and market value can be thousands of dollars.

Common questions

Can I keep my car if it is totaled?

In many cases yes, as a salvage or rebuilt title depending on state law. The insurer typically reduces your payout by the salvage value of the vehicle.

Is a total loss related to diminished value?

They are different claim types. Total loss involves ACV of a destroyed vehicle. Diminished value applies when the car is repaired but worth less on the resale market.

Check if your total loss offer is fair

Compare your insurer's settlement to real market data and get documentation to dispute a low offer.

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