One of the most confusing and frustrating issues associated with automobile
accidents is whether or not a vehicle is going to be considered a total
loss, or “totaled”. Many of us have heard shocking stories
from friends or family about their vehicle being considered totaled when
they felt it shouldn’t have been, or vice versa. The process for
determining total loss on a vehicle is even confusing for many insurance
The process of determining whether a vehicle can be declared a total loss
involves the actual cash value (ACV) of the automobile, the cost of repairs,
and other factors. Many consumers are aware that a vehicle is typically
considered a total loss if the actual cash value of the automobile is
less than the costs of repair. Unfortunately, even this formula is not
Much of the confusion on this topic is due to each insurance company having
its own criteria for determining when to total a vehicle. There is not
one single source that all companies use to determine the actual cash
value of an automobile, which adds another complication. Each state has
different regulations as well.
In the state of Georgia, insurance companies typically make use of the
Total Loss Formula when determining whether or not to total a vehicle.
This formula adds the cost of repair to the vehicle’s salvage value.
This sum is then compared to the Actual Cash Value of the vehicle. If
the ACV is less than the sum of the repair costs and salvage values, the
automobile can be declared a total loss. This method depends highly on
licensed appraisers and cannot be predicted by anyone other than those
directly involved from insurance companies.
What Happens If My Vehicle Is Totaled?
In the event that the insurance company declares your vehicle a total loss,
you will be paid the actual cash value of your vehicle. This means that
whatever your automobile was worth prior to the accident. They will, of
course, subtract your deductible from this amount. Many insurance companies
will replace cars less than three months old with brand new vehicles,
but this is something that varies from company to company.
For detailed information about your insurance company’s policy on
totaling vehicles, contact their customer support. They are required to
provide you with any information that you request.