When Is a Car Declared Totaled in Insurance?

Several factors determine whether or not a vehicle is totaled.

After an accident, there are many things to think about, including what to do if your car is totaled. Before replacements or repairs, a decision must be made by insurors whether the car is totaled or not.

Definition

A car is considered totaled if the insurance company decides that it would cost more to repair the car than to replace it, the car cannot be repaired safely or if state laws require the company to define the car as a total loss due to extensive damage.

Actual Cash Value (ACV)

Insurance companies determine the Actual Cash Value (ACV) of the vehicle to determine whether it is totaled. This is done by noting the mileage and condition of the body, tires and interior. Based on this condition, the appraiser will find similar models being sold and base the total loss estimate on those comparable models. Insurance companies differ; some declare a vehicle totaled if repairs are 51 percent of the ACV, others might not declare it totalled unless repairs are closer to 80 percent.

Guaranteed Replacement Cost

Some insurance companies offer a guaranteed replacement cost, a feature for owners of newer cars that provides coverage for a new car. If a driver doesn't have this coverage, the insurance company will pay the actual cash value of the vehicle minus the deductible of collision coverage as defined by the owner's policy.

References

• Auto Body Stop Shop: When is a Car Totaled?
• Understanding Your Options for a Totaled Car