Knowing the Total Loss on Car Insurance

Calculate the total loss on your car insurance by comparing the cost of repairs to the cash value of the car. If the repair costs are higher, your car insurance company will declare it a total loss.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Jul 8, 2020

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Here's what you need to know...

  • You can easily find out what your total loss is in the case of an accident
  • To do so, simply compare how much repairs would cost and what the current actual cash value of your car is
  • Your insurance company will probably use a couple of methods to determine if your vehicle is a total loss or not

Even though your insurance company will determine if your car is a total loss and what it is worth, it is a good idea to determine it yourself, as you may not agree with the insurance company’s assessment and may want to contest their offer.

You can compare car insurance rates right now just by filling in your ZIP code in the box above.

What does total loss refer to?


When you get in an accident, the insurance company will get estimates for how much it would cost to repair and restore the vehicle to its pre-accident condition. Then your provider will determine what the actual cash value of the vehicle is.

One of the sources used for this is the Kelley Blue Book. This resource lists the fair market prices of cars based on the following information:

  • Make
  • Model
  • Year

If the repair costs are equal to or more than the actual value of the vehicle, it is determined to be a total loss. When it is a total loss, your insurance company will just write you a check for your car rather than pay for it to be repaired.

Your car may also be determined to be a total loss if it cannot be physically or safely repaired to its condition before the accident occurred.

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What if the payment the insurance company offers doesn’t seem to be enough?

Car insurance companies are in the business of making money. One of the ways that they try to save money is by offering an amount for your car that is lower than what it really is.

Many people will accept the check because they believe the insurance company or don’t want to go through the work of negotiating or fighting the payout.

Always do your research to determine what your car is really worth.

If your calculations are more than what they insurance company offers, you do not need to accept their original offer and you can negotiate a different amount.

Why may your car be worth more than the insurance company determines?


There are a number of things that may increase the value of your car so that it is worth more than the Kelley Blue Book value. In this case, it is important to have documentation and receipts to prove that it has these improvements.

You may have added things to the vehicle that will ultimately increase its sale value. This may include a high-quality entertainment system with speakers. It can also include a sun roof, new wheels, and tires, or remote starter system.

Your car may also be worth more if you have kept it in pristine condition.

This includes keeping up with regular maintenance such as oil changes and tire alignment, as well as keeping it neat and clean.

If you have made those improvements to your vehicle, it would be worth more than what the Kelley Blue Book says it is worth.

You will want to communicate to your agent and insurance adjuster about these additions to your vehicle, as they may increase what the insurance company will pay you for the car.

How do you contest what the insurance company offers for your vehicle?


If you still don’t agree with how much the insurance company wants to pay for your vehicle, you do not have to accept the check. Often insurance companies will offer an amount that is lower to take into consideration negotiations from you.

If you feel that the offer from your insurance company is lower than it should be you can send a letter to your insurance company and adjuster explaining what you think the amount should be and why.

Include all documentation and paperwork such as accident documents, pictures, maintenance paperwork, and receipts of improvements you have made to the vehicle.

You will hear back from the insurance company with either a rejection of your request or a higher offer. If they reject your request you may want to bring in a third party to make its own estimates.

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