When insurance decides the car isn't worth fixing.
A 'total loss' means your insurance company has determined that the cost to repair your vehicle exceeds a threshold (usually 70–80% of its actual cash value). Here's what that means in practice, how the payout works, and what your options are.
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Insurance carriers calculate Actual Cash Value (ACV) — your vehicle's market value just before the accident — and compare it to the repair estimate. If repair cost approaches or exceeds the threshold, they declare a total loss. Older or high-mileage vehicles often total at lower damage levels because the ACV is lower.
The insurance company pays you the ACV minus your deductible (and any salvage value if you keep the vehicle). They take the vehicle and salvage it. If you have a loan, the payout goes first to your lienholder; you get any remainder.
Yes. If you believe the ACV is too low, you can dispute with comparable sales data (CarMax offers, Kelly Blue Book, local listings). You can also retain the vehicle if you want to repair it yourself — though the title becomes 'salvage' and resale value drops.
Insurance has decided the cost to repair exceeds a percentage of the vehicle's actual cash value (often 70–80%). They pay you the value of the vehicle instead of repairing it.
Often yes. The insurance pays you ACV minus a salvage value, you keep the vehicle, and the title is rebranded 'salvage.' You can then repair it yourself — but resale is more difficult.
You're responsible for the difference unless you have gap insurance. Gap insurance pays the difference between ACV and your loan balance — worth considering if you have a newer vehicle or a long loan.