Total Loss — Insurance Claims Definition
Auto
When repair cost exceeds a threshold relative to actual cash value, or the vehicle is structurally unsalvageable, so the insurer pays ACV and takes salvage.
Total loss thresholds are often 70–80% of ACV but vary by carrier and state. The insurer pays ACV minus deductible and may retain salvage or allow owner buyback at salvage value.
Examples
A flooded vehicle has repair estimate $18,000 on a $15,000 ACV — declared a total loss; insured receives $14,000 after $1,000 deductible.
Common Mistakes
Disputes over ACV comps and aftermarket parts. Owner wants repair when economically totaled — carrier follows threshold rule.
