What Is an Insurance Total Loss Claim?

If you have recently been involved in an accident and filed an insurance claim with your carrier, there are many confusing words and processes that could be unfamiliar to you but will have a significant impact on the outcome of your claim.

Losing your vehicle and hearing that the insurance company is not planning to invest in repairs can be a shocking discovery and one that you likely wish to understand better.

One of the most common questions presented by consumers in this situation is what it means when the company tells you that you have an insurance total loss. A car will be declared as a total loss when the estimated cost of repairing the vehicle would be more than the actual cash value of the vehicle itself.

A car insurance total loss claim is different from filing a minor car accident property damage claim and requires more work on the part of the insured individual.

In order to be covered for a total loss on the vehicle, you will need to have property damage liability or collision or comprehensive insurance in your active policy. Property damage liability is mandatory in each state across the country. It kicks in when the other driver negligently caused the accident and their insurance company covers the damage.

Most frequently, those covered under a car insurance policy will seek payment for total loss through their own insurance carrier which can be done under the umbrella of collision insurance. When filing a claim under collision insurance, it does not matter if you were at fault.

The next phase in the process of an insurance total loss claim involves an adjustor. The claims adjustor will inspect the vehicle directly to assess damage and it is at this point in time that the designation of total loss will be made.

What verifies a total loss depends from one state to another. Some states use what is known as a total loss formula and others use a total loss threshold. The total loss formula means that the expected cost of repair in addition to the salvage value of the vehicle exceeds the actual cash value, enabling the insurance company to claim it a total loss.

In a total loss threshold state, however, the damage must go beyond a named percentage of the vehicle’s value to be classified as a total loss. Some people misinterpret the distinction of the car being named as a total loss as an insurance company pay out or gift of sorts. But there are opportunities to negotiate an insurance total loss.

The first step that people can take in identifying whether or not the insurance company is acting fairly in classifying the car as a total loss is to review their own insurance policy carefully. If the details about when a car is classified as a total loss are not included in that policy directly, contact the insurance company to ask them.

Join a Free Total Loss Car Accident Class Action Lawsuit Investigation

If you were insured under an auto insurance policy, experienced a total loss car accident, and were not reimbursed for sales tax and other fees by your insurance company in the last 5 years, you may qualify to join a total loss car accident class action lawsuit investigation.

Learn More