If the cost to repair is more than the vehicle is worth to replace then it is considered totaled.
If the repairs of the vehicle exceed the value of the vehicle, then the vehicle is declared total loss.
Typically the value is 20% of the vehicle's value without salvage.
A total loss is when the cost of repairing the vehicle exceeds a pre-determined percentage of the vehicle's value. For example, if your vehicle is worth $10,000 and the damage exceeds $7,000, your vehicle may be considered a total loss (depending on the state and your insurance company's policy). A borderline total loss would be (in the same example) if the damage to your vehicle is close to, but not quite $7,000.
As of 2013, the best way to determine if the department of motor vehicles has issued a salvage title for a vehicle is on the title it will state that it is a salvage title. A salvage title is a note that states that the vehicle has been damaged or deemed a total loss.
Different insurance companies use different figures to determine whether or not a vehicle is a total loss or not. Usually it is between 70 to 80 percent of the value of the vehicle. There is usually a special total loss adjuster who handles these cases once the normal property damage adjuster has determined it to be a total loss. Within all insurance policies it spells out that your insurance company has the option of paying to repair your vehicle, replace the vehicle, or pay you the actual cash value of the vehicle. All of these cases will be less your deductible of course. If they pay you the full actual cash value of the vehicle then of course the vehicle belongs to them. Sometimes you can buy it back from them if you like. I always recommend that people do not buy the car back because of the issues involved with this. In order to be able to get a tag for it again you will have to repair it completely and it will have to be inspected by the state. After this you will receive a salvage title that shows the new owner and all future owners that it was a total loss at one time. This makes it worth far less than any others if you want to sell it in the future.
The term "total loss" is used in the auto insurance industry to describe a car that would cost more to repair than the value of the car itself. When an insurance company that your car, truck, SUV, van or other vehicle is a total loss, you have the choice to accept the insurance company's check to you for the value of your car or to dispute the valuation of the car and have the total loss determined by an arbitrator.How Insurance Companies Determine Total LossFollowing an accident, your insurance company will initially assign an insurance adjuster to your claim. The adjuster will inspect your wrecked auto and determine the extent of the damage. The adjuster will also use a formula that is established by each insurance company to determine whether the insurer should pay to repair the vehicle of if the cost of repairs would exceed the threshold that the company has set. Many insurers will consider the vehicle to be a total loss if the cost of repairing the vehicle and providing you with a rental car for the time period that the vehicle is being repaired exceeds fifty-one percent of the actual cash value of the vehicle. Other companies will call the vehicle a total loss if this percentage is eighty percent or greater.Even though a car may still be drivable, if the actual cash value of the vehicle is already low due to vehicle age or condition, the insurance company may prefer to total the car out and pay you the cash value of the car in lieu of paying for repairs. Typically, insurance companies use the so-called "blue book" value of the vehicle in determining cash value.Arbitration to Dispute Total LossIf you do not agree with the declaration of your vehicle being a total loss, you may have the right to arbitration. Check with your policy to determine if you have that right, or ask your agent. Not all policies provide a provision for arbitration. If it does, you can hire an independent arbitrator to examine your vehicle and make an estimate as to the cost of repairing the vehicle. If the insurance adjuster's valuation of the vehicle (and thus the payment you will receive) is less than you think it should be, or if your vehicle has sentimental value, then arbitration may be your best option.A good way to know if you are getting a fair shake from the insurance company is to look up the value of your vehicle online. There are several online authorities on the matter of blue book value, and it does not cost to look up the information.Settling UpOnce your vehicle has been declared a total loss, most people just accept the settlement check for the value of their vehicles. The settlement check typically includes the cost of registering and titling a vehicle that values at the same costs as your wrecked auto. The insurance company will keep your wrecked auto and sell it off to recoup some of the money that they paid out to you. Most "totaled" vehicles end up being sold to salvage or junkyards as scrap.
If it is a total loss then the insurance needs to pay the value of the vehicle.
The "total loss" threshold is determined by multiplying the credible retail value of the vehicle (usu. the "Blue Book" value) by some percentage, usually 80%. If the actual dollar cost to repair the vehicle would exceed this threshold figure, the vehicle is then declared a total loss. I don't believe that sales tax or other "fees" are included in the initial determination. So, for example, if your vehicle has a "Blue Book" value of $10,000 and the cost to repair it is greater than $8,000, it will be "replaced" rather than repaired. You should receive a check for $10,000 minus any deductibles plus the sales tax in your state of residence .
544. "Total loss salvage vehicle" means either of the following: (a) A vehicle, other than a nonrepairable vehicle, of a type subject to registration that has been wrecked, destroyed, or damaged, to the extent that the owner, leasing company, financial institution, or the insurance company that insured or is responsible for repair of the vehicle, considers it uneconomical to repair the vehicle and because of this, the vehicle is not repaired by or for the person who owned the vehicle at the time of the event resulting in damage. (b) A vehicle that was determined to be uneconomical to repair, for which a total loss payment has been made by an insurer, whether or not the vehicle is subsequently repaired, if prior to or upon making the payment to the claimant, the insurer obtains the agreement of the claimant to the amount of the total loss settlement, and informs the client that, pursuant to subdivision (a) or (b) of Section 11515, the total loss settlement must be reported to the Department of Motor Vehicles, which will issue a salvage certificate for the vehicle.
Regardless of what you paid for the vehicle, in most cases,if your vehicle is deemed a total loss, you will be paid the local market value of your vehicle. If you happened to purchase your vehicle for less than that, you lucked out:)
following is the formula for measuring net income or loss:Net income (loss) = total revenue - total expenses.
claims paid divided by total premium - tax
Basically when repairing it is more than the cost of the current value of the car.
Case Law Hanna vs. Lott states that when the car is totally destroyed, the measure of damage is the difference in the market value immediately before and immediately after the loss, and no additional recovery can be had for the loss of use of the chattel while it is being replaced. No loss of use is owed on a total loss vehicle.
If you read the 'small print' in your agreement you will very likely find you have granted them this authority. - In many cases, you can negotiate with them and get a payment, but keep the remains of the vehicle.
formula of "Net Gold loss
Normally if the estimated damage is 75% of the value of the vehicle, it will be considered a total loss. The reason for this is that there may be hidden damage that only appears after the repairs are initiated. This varies, depending on your insurance carrier.
AnswerAfter it's Repaired, it's called a " Salvaged Rebuilt Vehicle". before it's repaired it's called a total wrecked vehicle. Most insurers will not provide insurance for a total wrecked vehicle unless proven that the vehicle was prematurely declared a total loss.This would not apply to cars being rebuilt from the ground up, such as classics
You can't really avoid it unless you can find a place that will repair the vehicle at the amount the insurance company says it is worse. They have standards to determine a total loss that must be met.
If the insurance writes off the vehicle - they get YOUR title document - and THEY then forward it to the DMV informing them that the vehicle is scrapped.
Any vehicle, whether a total loss or not, has a value. A totaled vehicle, of course, has a significantly lesser value (assuming the actual total loss has already been settled with the vehicle owner). This value can be anywhere from 5 - 25% of the pre-loss value of the vehicle. If you decide to keep a totaled vehicle after settling with an insurance carrier, they can legally remove the salvage value from your settlement. It shouldn't be much, and you can request that they actually get a salvage quote from a salvage yard. The idea behind this is that you can't legally profit from a loss. In your case, if your totaled vehicle has a salvage value, and you're keeping the vehicle, the insurance carrier must deduct that salvage value. Otherwise, you will get a full settlement, and still retain a vehicle with some value. But...try working with the carrier on what that salvage amount is going to be. Sometimes they'll adjust it to get the loss settled, since you never "really" know what the salvage value is going to be until the vehicle is sold at a salvage yard auction.
The same as any other loss. Damages and repair costs are assessed and if determined a total loss the vehicle value is paid out. Lien-holders take first place on the payout.