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When Does an Insurance Company Declare a Vehicle a Total Loss?

Last updated 1 year ago

Did you know that many total loss vehicles are only involved in minor accidents? Insurance companies declare a vehicle a total loss based on a comparison between the cost of repairing damages and the total cash value of the vehicle. Read this article to learn about the total loss process and what makes a car a total loss vehicle:

  • Evaluation of Damages
    The first step an insurance company will take to determine if a vehicle is a total loss is an inspection of damages. A specially trained claims adjuster will look through an entire vehicle and calculate an estimate of the parts and labor costs. After this inspection, the insurance company will compare the amount for repairs to the total cash value of the car. If repairs are between 51% and 80% of the total cash value, depending on the insurance company, a vehicle can be considered a total loss.
  • The Value of Total Loss Cars
    It is commonly thought that a total loss car must have incurred extensive damage, but this isn’t always necessarily the case. Sometimes an older vehicle is considered a total loss even after a minor accident simply because it is considered too expensive to repair when compared to the cash value of the vehicle.

Many owners of total loss vehicles decide to sell the vehicle or turn the title of the car over to their insurance company, which will usually be auctioned off to salvage-title car dealerships or junkyards. The total loss cars that end up at dealerships are oftentimes mechanically reconditioned by the dealership, making them a perfect option for drivers that are looking for a great deal on a viable used car that might be lightly damaged.

If you’re looking for a lite damaged or salvage-title vehicle, come to Linn’s Auto and Equipment Sales of Conway. For more information on the vehicles we have to offer, visit our website or call us at (501) 327-3856.


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