Your damaged vehicle may be declared a “total loss” when the cost of repairing it exceeds its actual market value. This claim is different from minor damage claims and will require more effort on your part. This article will examine how total loss works and, more importantly, how an insurer will define a total loss.
Actual Cash Value and Total Loss Claims
To receive an insurance payout for a vehicle, you need to have comprehensive insurance, collision insurance, or property damage liability.
Property damage (PD) liability is mandatory across all states, but you will only receive a payout if you file a claim against the other driver’s PD. However, the other driver would have to be proven the negligent party in the accident.
The easiest and fastest way to get payment from a total loss is via your own insurer if you have collision insurance. When it comes to collision claims, it does not matter whether it was your fault, but you still need to pay a deductible before the company covers your claim.
Once assuming that you have these coverages in place and you aren’t injured or currently seeking medical care, the first step after your vehicle is damaged is to file a claim with the insurer right after the accident. The company’s adjuster will schedule a visit to inspect the vehicle to assess the damage. This is where they will determine if the vehicle is a total loss.
If the adjuster estimates that the cost to repair the damaged vehicle is higher than what it is worth, in other words, repairs exceed its actual cash value or ACV; then it is labeled a total loss. That said, how exactly it is determined will vary.

What Will Happen If The Vehicle Is Declared A Total Loss?
If you have agreed with the vehicle being a total loss, here is what the insurer will require that you do:
- Leave the key to the vehicle with the adjuster
- Remove the license plates and other belongings
- Fill out all the required paperwork
- If the vehicle is leased, then contact the leasing company
The sooner you do all of the things above; the faster and smoother will be the resulting process. After the vehicle is designated a total loss, it is taken to the insurance company, which will notify the DMV of its status. Depending on where you live, the car can also be declared “salvage,” which means it may be sold to a buyer specializing in salvaging vehicles.
Final Word
You are well within your right to disagree with the vehicle being declared a total loss. In that case, you can negotiate with the insurance company’s adjuster. For instance, you can make a case that the company didn’t account for the modifications you made to the vehicle. You will also be required to provide documentation and proof showing the vehicle is worth more than what was previously estimated. If you think that the insurer didn’t adequately compensate you, hire a lawyer to represent you in court.
Contact us today for a free auto insurance quote from multiple providers in Southlake, TX.
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