Total Loss Thresholds

Total Loss Claims By State

Total Loss Thresholds

A total loss threshold is the point at which a vehicle’s repair costs become too expensive to be worthwhile, resulting in the vehicle being declared a total loss (or totaled). The cost of repairs is compared to how much the vehicle was worth right before the accident, or the vehicle’s actual cash value (ACV).

There are two main types of total loss thresholds used by different states:

  • Simple percentage threshold: This percentage is how much of the vehicle’s actual cash value the repairs need to cost for the vehicle to be declared a total loss. The most common amount is 75%.
  • “Total loss formula” (TLF): The TLF is a comparison of the vehicle’s actual cash value to the sum of its repair costs and salvage value (how much it would sell for in its current condition).
  • For example, if a vehicle worth $10,000 needs repairs totaling $7,500, and it could be sold for $500 in salvage, the vehicle would not be declared a total loss because the repair cost plus the salvage value ($7,500 + $500) does not exceed the vehicle’s actual cash value ($10,000).

Total Loss Thresholds By State