Total Loss of your Car

When the cost of repairing a damaged vehicle is more than the value (or a percentage of the value) of the vehicle if it hadn’t been involved in an auto accident, then the vehicle is considered a total loss, or “totaled”. Your property damage is then calculated as fair market value.

The California Department of Insurance requires insurance companies to base total loss payouts on the average of at least two comparable used vehicles sold or listed for sale within the last 90 days.

The insurance company should provide a payout that will enable you to replace your vehicle with a comparable car from the used-car market. Because valuation is so subjective, it is generally a good idea to obtain several comps independent of the insurance company. Craigslist,  Auto Trader  and CarMax are good resources to consider. 

The Kelley Blue Book provides a general valuation of your car, but the insurance company is not required to use these values. You can request a copy of the comps used by the insurance company if you are dissatisfied with the valuation calculated. 

Your car insurance company pays the fair market value, or actual cash value (ACV) or your totaled vehicle. Simply put, a vehicle’s ACV is your car’s current value after depreciation but before the accident.