Laws on this issue can vary from state to state. Therefore, you should always consult directly with an attorney to determine the law that applies to your specific situation. Generally speaking, however, the term, "total loss" generally refers to the value of a vehicle being completely diminished due to an accident. Specifically, the term means that according to an insurance company’s estimate, it will cost them more to repair the vehicle than it will to pay you for the fair market value of the vehicle at the time of the loss. Total losses usually occur when the damage to the vehicle exceeds 80% of the car's fair market value. This is true because repair costs usually exceed 20% of the repair cost. Different insurance companies will use different percentages in determining whether a vehicle would be considered repairable. The ratio of damage to the vehicle to the fair market value must usually exceed 70 to 85 percent of the fair market value for the insurance carrier to deem it a "total loss". The insurance companies are only required to give you money for the repair costs or the market value of the car, whichever is less.