When Is A Vehicle Considered Totaled?

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 specialists.

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 always reliable.

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.