How does Total Loss Work?

Millions of people every year neglect filing a claim for their Auto-Hail Damage due to the fear that their vehicle might total. The whole process of totaling a vehicle is confusing and stressful, the best and most simple solution to finding out if your vehicle will be declared a total loss before filing an insurance claim is to take your car to a repair facility for a consultation. But for some customers, there is a need to know more. How does totaling a car for hail damage work? What should you do if you think your car is totaled from hail damage? Well, this is a question that we hear all the time, so let’s dive in.

What does Total Loss Mean? When your vehicle is declared a “Total Loss,” the cost to repair the vehicle is more than the vehicle’s “monetary worth”.

Monetary Worth is not calculated by what you paid for the vehicle, but is based on the overall market value of the car in the area and your state's Total Loss Formula. These factors vary from state to state, and from car to car.

Total Loss Formulas State Mandated Total loss formulas are what insurance uses to evaluate a vehicle’s total loss. Currently, most states assign a specific threshold percentage, varying from 50%-100%. total loss formula is evaluated based off of the Actual Cash Value (ACV) and includes the scrap or salvage value of the vehicle plus the cost of repair. If the scrap value and repair cost are lower than the ACV, the vehicle is deemed as repairable. In states with a threshold, vehicles are deemed at a total loss when the Salvage Value + Cost of repair reach the percentage of threshold. Confusing right? Let’s break it down.

1. Look up your state’s threshold here.

2. Calculate the market value for your vehicle on Kelly Blue Book’s website. There you can plug in the general information for your vehicle to get both the wholesale (aka: trade in) value for your car, and the retail value. Take the average wholesale plus average retail price, divided by 2 is the general market value of our car. 3. Figure the salvage value is based off of a percentage of the market value. This percentage may vary between vehicles, states and insurance providers. However, if you are looking for a rough estimate, salvage value is normally 25%-50% of the market value, so to calculate the salvage value, you would take the market value and multiply it by .25 for 25% or by .5 for 50%.

4. Access the cost of damage

Unfortunately, with hail, there is no set rate to repair a vehicle, as each vehicle’s damage is different, so you will have to take your car to a reputable hail repair shop to determine your car's risk for totaling. If the shop deems your vehicle is at high risk or total loss, don’t worry you still have options.

So my car is a total loss… now what?

Essentially, insurance provides two options when totaling out a vehicle: Total the car, or keep it, which you can learn more about in are next blog post. Whichever option best fits your needs will most likely depend on your personal situation, as well as your individual policy details. Discount Hail Repair takes pride in explaining these options transparently and working with their customers to make sure they reach an informed and sound decision. To review the damages on your vehicle and assess your risk for total loss, call 1-844-766-4245 to book your appointment, today!