When Does an Insurance Company Total a Car? 7 Key Factors to Consider

When Does an Insurance Company Total a Car

Car accidents can be a stressful and overwhelming experience for anyone involved. It becomes even more complicated when you have to deal with an insurance company to determine the extent of the damage and whether your car can be repaired or deemed a total loss. But when does an insurance company decide to total a car? Let’s find out.

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What does it mean for a car to be “totaled”?

When an insurance company declares a car as “totaled,” it means that the cost of repairs exceeds a certain percentage of the vehicle’s actual cash value (ACV). This threshold varies among insurance companies but is typically around 70 to 75 percent.

Factors that determine whether a car is totaled

Several factors come into play when determining whether a car should be considered a total loss:

  1. Extent of damage: The severity of the damage is an essential factor in determining whether a car is repairable or not. If the car has suffered significant structural damage, it is more likely to be deemed a total loss.
  2. Vehicle’s value: The value of your car before the accident influences the decision. If the repairs cost more than the vehicle’s worth, it is more likely the insurance company will consider it totaled.
  3. Age of the vehicle: Older cars are more likely to be considered a total loss compared to newer ones because the cost of repairs for older vehicles tends to be higher relative to their value.
  4. Availability of parts: If the damaged car requires rare or hard-to-find parts, it may become more costly and time-consuming to repair, making it more likely to be declared a total loss.
  5. State regulations: Certain states have specific guidelines regarding when a car must be declared totaled, which can influence the insurance company’s decision.

What happens if your car is declared a total loss?

If your car is declared a total loss, the insurance company will provide compensation based on the car’s ACV. ACV is determined by considering various factors, including the car’s age, condition, mileage, and market value.

Once the ACV is determined, the insurance company will subtract the deductible (the amount you agreed to pay out-of-pocket) and any salvage value (the value of the car’s remaining parts) if the insurance company decides to keep the vehicle.

If you still have an outstanding loan on the car, the insurance company will typically pay the lender first. If there’s any remaining amount after settling the loan, it will be paid to you.

Is it possible to retain a totaled car?

In certain cases, you may have the option to keep your totaled car instead of turning it over to the insurance company for salvage. However, the insurance company will deduct the salvage value from the settlement amount to compensate for the vehicle’s remaining worth.

It’s important to note that keeping a totaled car can have its drawbacks. For instance, it may be challenging to find an insurance company willing to provide coverage for a car that has been declared a total loss in the past.

Frequently Asked Questions For When Does An Insurance Company Total A Car? 7 Key Factors To Consider

Q: How Does An Insurance Company Determine If A Car Is Considered Totalled?

A: Insurance companies calculate the total loss threshold based on the car’s actual cash value and repair cost.

Q: What Is The Actual Cash Value Of A Car?

A: The actual cash value is the car’s current market value, accounting for depreciation over time.

Q: How Can You Find Out The Acv Of Your Car?

A: You can research current market trends, consult online valuation tools, or seek professional appraisal services.

Q: At What Percentage Of The Car’s Value Is It Considered Totalled?

A: Generally, if the repair cost exceeds 70-75% of the car’s actual cash value, it is deemed totalled.


When an insurance company decides to total your car, it means that the cost of repairs is higher than a certain percentage of your car’s value. Factors such as the extent of damage, age, and availability of parts play a role in determining whether a car is repairable or deemed a total loss. If your car is declared totaled, the insurance company will compensate you based on the car’s actual cash value. Remember to consider the pros and cons of keeping a totaled car if you’re given the option.

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