What is Total Loss Valuation and How Do Insurance Companies Determine Your Car’s Worth?

03/07/2025

Can you imagine being in hospital with broken bones while trying to discuss the details of your accident with an insurance representative at the same time? Unfortunately, these are challenges we face in today's modern world.

But it doesn't stop there—don't be surprised if you find yourself amid confusing legal jargon and unfamiliar terminology. If your car has been damaged, one such term you might come across is total loss valuation. Simply put, this is how your insurance company determines if your vehicle is worth repairing. But what does it mean exactly, and how do car insurance companies calculate total loss value?

If you want to receive a fair payout, understanding the total loss valuation process is necessary. This article will break down how insurance companies value totaled cars when they decide to declare a vehicle a total loss, and the tactics they use to minimize payouts.

How Is Total Loss Calculated?

So when do insurance companies total a car? A car is typically considered a total loss when the cost to repair the damage exceeds a certain percentage of the car's actual cash value (ACV). This percentage can vary by state but often ranges between 70-80%. A total loss calculator is used to determine the value of your car before the accident. Factors that can be considered are the car's make, model and year, mileage, and market demand for the vehicle.

The salvage value (the amount the car can be sold for in its damaged state) is subtracted from the actual cash value to arrive at the payout amount. This process is known as total loss valuation.

How Is Total Loss Calculated

Understanding how insurance companies value totaled cars can help you navigate the claims process more effectively. By knowing how total loss is calculated and being aware of when insurance companies total a car, you can better advocate for a fair settlement. If you're unsure about the valuation provided by your insurer, consulting with a personal injury attorney can help protect your rights and ensure you receive the compensation you're entitled to.

Insurance Company Tactics

We’ve already established that insurance companies typically total a car when the repair costs and other expenses are greater than the car's actual cash value. Besides state laws, your individual insurance policy can also play a significant role in determining when a vehicle is deemed a total loss.

Now, let’s go over common tactics of insurance companies you need to look out for during the claims process. The first sign to watch out for is when your insurance company tries to reduce the payout by offering lowball repair estimates. Another one is when they use outdated or incomplete data to undervalue your car.

If you suspect your insurance company is trying to pull a fast one, you're not alone. Insurance companies are never easy to work with, but it's essential to challenge their assessment if you believe your car's value is higher. Remember that insurance companies are not designed to advocate for your legal rights, which is why working with an attorney is crucial.

How a North Hollywood Car Accident Attorney Can Help

How a North Hollywood Car Accident Attorney Can Help

Dealing with insurance companies requires a thorough understanding of car insurance laws and this is precisely why most people prefer an accident attorney to take over their claim. Furthermore, a legal representative can handle the entire process if your claim is wrongfully denied. So, how much will legal help cost you? Absolutely nothing. Most personal injury law firms work on a contingency basis. In other words, instead of being charged upfront, you only pay once your case has been settled or won.

If you need legal help regarding your totaled car, contact Yepremyan Law Firm for a free case evaluation. Since 1998, we've been a trusted legal advisor, helping thousands of clients recover millions of dollars. As an established personal injury law firm in North Hollywood, we represent clients throughout Southern California.

If you're looking for a Los Angeles car accident attorney or a personal injury lawyer in North Hollywood, we're here to help. With 24/7 support, our personal injury law firm provides guidance for victims who need immediate legal advice.

*No Legal Advice Intended. This website includes general information about legal issues and developments in the law. These materials have been prepared for general informational purposes only and are not intended to be legal advice. Please consult an attorney for legal advice pertaining to any particular legal matter. Use of and access to this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and Yepremyan Law Firm and any of its attorneys, employees, or associates.

FREE CASE EVALUATION

SUBSCRIBE

TO OUR MONTHLY NEWSLETTERS!

    The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility. Skip to content