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What Does a Total Loss Vehicle Mean?

Howry, Breen & Herman, LLP

Were you in a car accident recently and the insurance adjuster said your car was a total loss? Hearing that your car is a “total loss” sounds bad, but what does it really mean?

There are three insurance definitions of a “total loss” vehicle:

  • Repairing the vehicle would be unsafe, usually due to some sort of catastrophic damage that makes key parts unstable or prone to combustion.
  • Vehicle repairs would likely cost more than the vehicle’s estimated market value.
  • Vehicle damage meets or exceeds the relevant state’s total loss definition.

In most cases, a total loss is when the repair costs exceed the vehicle’s market value. For example, it might cost $5,000 to replace damaged components of a 20-year-old vehicle that likely only sell for $3,000 worth of scrap metal. The insurance company won’t authorize repairs in that situation if it could save money by paying the policyholder just the sell price.

Some states have total loss definitions that include a certain total value of repairs. For example, a vehicle could be a total loss if it needs $10,000 in repairs, regardless of whether or not it is still technically drivable. Many states like Texas use a basic definition, though, which states that a damaged vehicle is a total loss as soon as its repair costs exceed the market value.

Did you get hit by a reckless driver in Austin, Texas who totaled your vehicle? You could be offered just the market value of your car, which is probably much lower than what you really need to get back on your feet. To fight for a fair amount of compensation, team up with Howry, Breen & Herman by contacting us onlinenow.

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