Even the safest and most careful drivers have an accident at some point. It’s inevitable.
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How Much Damage Would Total a Car?
The smartest thing is to gain knowledge about it beforehand, so you wouldn’t be surprised when it happens because you are going to be stressed enough then.
The definition of a “Totaled” car
The word “totaled” comes from the insurance term “total loss,” and when your insurer says your car is totaled, they mean the cost of repairing the damaged insured property costs more than the actual value of the vehicle.
You may hear the term “Writing-off” instead of totaled; they are synonyms. So, if you hear your car has been “written off,” it means it’s totaled.
How much damage would total a car?
It really depends on your insurance company and which state do you live in. Each state sets the threshold or formula for declaring vehicles a total loss.
There are records showing that the insurance company will total a car even if the repair costs are less than the vehicle’s actual cash value because it can be challenging to determine the full extent of the damage before repairs begin.
What is a total loss formula?
22 states out of 50 didn’t assign a specific threshold percentage but, instead, use a total loss formula (TLF). The TLF is the cost of the repairs plus the scrap value of the vehicle, which should equal or exceed the actual cash value (ACV) of your car before the accident, so your vehicle will be totaled.
If that number comes in lower than the ACV, the insurer may decide to repair it.
These formulas can vary by the insurer, which means that one insurer may end up totaling the vehicle, and another may decide to repair it.
Cheap Car Insurance in New York
Here are the specific thresholds for each state:
Alabama 75%
Alaska TLF
Arizona TLF
Arkansas 70%
California TLF
Colorado 100%
Connecticut TLF
Delaware TLF
Florida 80%
Georgia TLF
Hawaii TLF
Idaho TLF
Illinois TLF
Indiana 70%
Iowa 50%
Kansas 75%
Kentucky 75%
Louisiana 75%
Maine TLF
Maryland 75%
Massachusetts TLF
Michigan 75%
Minnesota 70%
Mississippi TLF
Missouri 80%
Montana TLF
Nebraska 75%
Nevada 65%
New Hampshire 75%
New Jersey TLF
New Mexico TLF
New York 75%
North Carolina 75%
North Dakota 75%
Ohio TLF
Oklahoma 60%
Oregon 80%
Pennsylvania TLF
Rhode Island TLF
South Carolina 75%
South Dakota TLF
Tennessee 75%
Texas 100%
Utah TLF
Vermont TLF
Virginia 75%
Washington TLF
West Virginia 75%
Wisconsin 70%
Wyoming 75%
Let us explain it with an example; in New York, if a car got damaged 75% or more, it means that the car is totaled while it is considered repairable in Texas, where the threshold is 100%.
How “Cash Value” is calculated?
If your vehicle ends up totaled, you will be given the “actual cash value” (informal “ACV”) of now your totaled vehicle. How much your car would cost before it got totaled will be determined by the claim adjuster.
Claim adjusters work for insurance companies, and they will send them to deal with you. Unfortunately, 9 out of 10 times, the payout you will receive falls short of the true cost of replacing the vehicle.
A totaled car is never good news for either the driver or the insurance company.
What coverages will come in handy when you have a totaled car?
If you have the right kind of insurance coverage, maybe you can actually buy another car. Generally, there are two main car insurance coverage that comes in handy in these situations:
1. Collision coverage:
Collision coverage will cover damages done to your own vehicle if you’re involved in an accident with another car object, or you get into a single-car accident. If your car is totaled (totaled means the cost of repairs exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car.
2. Comprehensive coverage:
This insurance will cover the expenses of damages to your own vehicle that is caused by something other than an accident, like vandalism or a natural disaster.
Installing anti-theft and tracking devices can make this coverage more affordable. Still, comprehensive coverage can be costly, and it may not be necessary, especially if your car is easily replaceable.
How Much Does Insurance Increase After an Accident ?
What happens after an accident?
The first thing that must be done is to declare your car a total loss or to consider it repairable and get an insurance claim. If you are hit by, the driver who hit you is at fault, and their property damage liability insurance would pay for damage to your car.
An adjuster will be sent from your insurance company and examine the car and calculate the cost of repairs and your car’s pre-accident cash value. Your car’s make, model, year, options, mileage, and condition before the accident play key roles in calculating AVC. If the vehicle meets the required threshold, it will be totaled.
Tony Rached of Total Loss Appraisals in Alpharetta, Georgia, says:
“Insurance carriers that operate in multiple states have an internal mechanism for assessing total-loss levels to be consistent regardless of where the vehicle is located.”
Suppose your car is totaled, your insurer will require you to:
- Remove the license plate.
- Remove all personal items.
- Give your keys to your claims adjuster.
If you are financing or leasing a car, you will also have to:
- Notify your lender.
- If the accident were not your fault, you would get a rental car.
After all this, you must shop for a new car, and we recommend you to shop for a new insurance company as well because your rates will go up. Check out the article How Much Does Auto Insurance Increase After an Accident to find out more.
Also, don’t wait too long to shop for a brand-new ride because your rental car coverage is valid only for 30 days or until a settlement offer is made.
Mind the Gap
Gap insurance would be a lifesaver if you were financing the car. Gap insurance covers the difference between the amount your insurer pays out if your vehicle is stolen or considered as totaled and the price you paid for it.
Suppose you are financing or leasing a car and a bad accident happened, or your car got stolen, which resulted in a totaled vehicle. If you still have a loan or lease on it, you may end up owing more than the amount your auto insurance provider payout.
Insurers never give you the market value of your car because cars depreciate 10% of their value as soon as you purchase it and take it home. After only 12 months, the vehicle deprecates 20% and the longer time you have the car and the more you use it deprecates even more.
That’s why gap insurance was designed, and now most lenders require or advise you to get gap insurance.
Can you keep a totaled vehicle?
Yes, you can usually keep your totaled car. But your insurance company will most probably figure out the car’s “salvage” or “junk” value* and they will deduct that amount from what it pays you for the vehicle’s actual cash value.
*Your car’s salvage or junk value is the price of your totaled vehicle if sold to a salvage yard.
The settlement check will be a few hundred dollars less if you decide to keep your totaled car. Usually, salvage yards will pay no more than $1,000.
Notice: When you decide to keep a totaled vehicle, a special kind of title that needs to be obtained by the state’s motor vehicles department. It means you or your insurance company have to do some extra legwork.
