When Do Insurers Decide Your Car is a “Total Loss”?

“Total loss” is just a catchphrase for something all owners of cars in need of repair consider at some point: When does the cost of the repairs needed surpass the actual remaining value of the vehicle?

Your car insurance provider asks itself the same question whenever you get into a bad wreck, with a few added variables. The insurer looks at cost of repairs + salvage value (the worth of the remaining parts) + the amount of money you’ll need to be reimbursed for renting a car during the repair process. If this number exceeds the post-repair value of the car, the insurer will determine it a total loss.

Serious car accidents can cause all sorts of headaches -- real and psychic -- and total loss is one of them. The thin silver lining is that your car insurance should cover the lost car. Most policies pay the actual cash value of the vehicle, minus your deductible.

Another “convenient” aspect of total loss is that insurer will often take ownership of the vehicle. Basically, you don’t have to deal with the car anymore. The title gets transferred to the insurance carrier and then it works directly with the salvage buyer.

If you disagree with the insurer’s total loss determination you do have a bit of recourse. You could have the car appraised by a damage expert -- but at your own cost. This appraisal will likely cost hundreds of dollars, which will only add to -- or subtract from -- from your numbers game. On the other hand, if you believe your car should be declared a total loss and your provider disagrees, don’t forget to include costs such as towing and rental fees when filing your claim to nudge the numbers in your favor.

There’s not much pleasant about a big car accident. You can take a bit of solace knowing that total loss is a security net for insured vehicles. But filing the claim and resolving it to your satisfaction can take a lot of effort. And then of course there’s the issue of getting a new car.