When Is a Car Considered Totaled? (2024)

A car qualifies as totaled when its repair costs exceed its actual cash value.

Anna Baluch
Written byAnna Baluch
Photo of an Insurify author
Anna BaluchInsurance Writer
  • 4+ years writing insurance and personal finance content

  • MBA from Roosevelt University

Anna leverages her personal finance and insurance knowledge to create educational content that helps people make smart financial decisions.

Featured in

media logomedia logomedia logo
Katie Powers
Edited byKatie Powers
Photo of an Insurify author
Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

media logomedia logo

Updated May 1, 2024

Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.

The average cost to repair a vehicle is around $500–$600, but it can cost much more in some cases, according to AAA.[1] If you have a serious accident that totals your car, it doesn’t make financial sense to repair it.

Here’s what you need to know about totaled vehicles, including when a car qualifies as totaled and what you should do with it.

Find Car Insurance

Check quotes from 100+ top insurance companies

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

When is a car considered totaled?

Your car insurance company will total your vehicle if the cost of repairing your car exceeds its actual cash value (ACV), or fair market value. These interchangeable terms describe how much your car was worth at the time of the crash before the damage occurred. If the vehicle is unsafe to drive even after receiving some repairs, your insurer can total it.

Driving safely can help you reduce the risk of totaling your vehicle, but factors outside of your control — such as dangerous drivers or extreme weather conditions — can total your vehicle.

If your insurance company declares your car as totaled and you have the proper coverage, you should receive a payout for what your insurance company deems the car is worth, minus your deductible. For example: Let’s say your car is worth $6,000, and you have a $500 deductible. In this scenario, you can expect a $5,500 payout.

Total loss formula

Your insurance company may use the total loss formula when determining if your vehicle is a total loss, though some states require companies to implement total loss percentage thresholds for a vehicle’s ACV instead.

  • Total loss threshold: States that have a total loss threshold requirement often have an ACV percentage threshold of 70%–80%, but specifics vary by state. An insurer will deem a vehicle a total loss when the cost to repair it exceeds the set percentage threshold of its ACV.

  • Total loss formula: In states that don’t have a set percentage threshold, car insurance companies use the total loss formula. If the necessary repair costs exceed your vehicle’s ACV minus the car’s salvage value, then the insurer will deem your car a total loss.[2]

Calculating a car’s fair market value

The fair market value of the car is what the vehicle would be worth at car dealerships or private sales between a willing buyer and seller. To find the fair market value of your car, you can use an authoritative resource in the automotive industry, such as Edmunds, Kelley Blue Book (KBB), or the National Automobile Dealers Association Used Car Guide.

You’ll need to enter the most current information about your vehicle — such as its year, make, model, mileage, and overall condition — to receive the most accurate market value information for your vehicle.

For Example

Let’s say you drive a 2013 Acura RDX and have a car accident that results in major vehicle damage. The KBB Fair Purchase Price for this Acura model and year is $11,728. Your insurer will consider the estimated cost of vehicle repairs and the car’s salvage value. For this example, the vehicle salvage value is $8,000, and the estimated cost of repairs is $5,000.

Because the ACV ($11,728) minus the salvage value ($8,000) is less than the cost of repairs ($5,000), your insurer will total the vehicle.

When a car is totaled, by state

States have different thresholds for declaring vehicles a total loss — which can be a percentage of loss or the total loss formula (TLF). But car insurance companies can choose a lower threshold as long as they meet the state’s minimum.

Here are the threshold requirements by state.

Shop for Car Insurance

Insurify partners with 100+ top insurers for real-time quotes

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

What to do when your car is totaled

If you have a major car accident, do your best to remain calm and follow these steps after making sure everyone involved is safe.

  1. File an insurance claim. First, file a claim with your car insurance company. You may contact your car insurance agent or report the claim online. You’ll need to include the police report, explain what happened, and attach any photos or videos you captured of the damage. If applicable, you should collect the names and contact information of witnesses at the scene of the accident so you can provide them as well.

  2. Work with a claims adjuster. An insurance adjuster will likely come out to inspect your car in person. The inspection will inform them of the condition of your vehicle and help the auto insurance company estimate your potential claim payout. The company may have your car towed to a storage facility so that the adjuster can complete their work there.

  3. Collect your insurance payout. If the adjuster deems your vehicle a total loss, your insurer will let you know. You can expect a settlement check, minus your deductible. Note that if you have a lease or loan on your car, the car insurance company will pay the leasing company or lender the amount you still owe them if you have gap insurance.

Insurance coverages for a totaled car

Several types of optional car insurance add-ons can provide an insurance settlement for a totaled car. Learn more about these common coverages below.

  • illustration card https://a.storyblok.com/f/162273/100x100/31bb162db0/accident-forgiveness.svg

    Collision coverage

    Collision insurance can cover your vehicle repairs or replacement costs after an accident with another vehicle or stationary object, like a guardrail or fence, regardless of fault.

  • illustration card https://a.storyblok.com/f/162273/x/665da91bf7/comprehensive-coverage.svg

    Comprehensive coverage

    Comprehensive coverage protects your vehicle from non-collision damage, such as vandalism, fires, theft, or storm damage. If your insurer deems your car a total loss due to this type of damage, it’ll reimburse you for the actual cash value (ACV) of your vehicle, minus the deductible.

  • illustration card https://a.storyblok.com/f/162273/x/5285c4cd74/uninsured-or-underinsured-motorist-coverage.svg

    Uninsured/underinsured motorist coverage

    An uninsured/underinsured motorist auto insurance policy will cover you if you have an accident with a driver with insufficient coverage or no car insurance at all. If an uninsured driver totals your vehicle, this coverage can pay for its ACV, after you pay your deductible.

  • illustration card https://a.storyblok.com/f/162273/150x150/13c17bd678/car-service-96x96-orange_027-car-lift.svg

    Gap coverage

    Also known as guaranteed asset protection, gap insurance will protect you when your insurance settlement after a total loss doesn’t cover the outstanding loan balance on your auto loan. A gap insurance policy can be a real lifesaver if your vehicle faces damage beyond repair and you’re still paying off your loan.

Totaled car FAQs

Here’s some information to help answer your remaining questions about totaled vehicles.

  • How do you find the salvage value of a car?

    The salvage value of a vehicle will depend on your state as well as the year, make, and model of your car. While the amount varies by car insurance company, it’s typically about 75% of the market value.[3]

  • Is there any way to fix or keep a totaled car?

    It depends. You may have the option to repair or keep a totaled car. But you’ll likely need to get a salvage title if you have someone repair your vehicle.

  • What happens when your car is totaled but still drivable?

    If your totaled vehicle is still drivable, you’ll have to meet your insurance company’s requirements to keep driving it. You may need a rebuilt title in some cases, and you should get it checked by a mechanic at a repair shop to make sure it’s safe to drive.

  • When is a car considered totaled in Texas?

    The Texas Department of Insurance states that a car is a total loss when the cost to repair it and the salvage value is at least 100% of its ACV. Car insurance companies in the state may use a lower percentage threshold.[4]

Sources

  1. AAA. "Planning for Auto Maintenance and Repair Costs."
  2. Kelley Blue Book. "Totaled Car: Everything You Need to Know."
  3. Alabama Department of Revenue. "FAQ Categories / Tax: Salvage vehicles and rebult vehicle inspections."
  4. Texas Department of Insurance. "My car was totaled! Now what?."
Anna Baluch
Anna BaluchInsurance Writer

Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.

Katie Powers
Edited byKatie PowersAuto and Life Insurance Editor
Photo of an Insurify author
Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

media logomedia logo

Compare Car Insurance Quotes Instantly

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
4.8/5
Shopper Approved
ProgressiveLiberty MutualTravelers

Latest Articles

View all