Why Won’t The Insurance Company Total My Car?

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, however, the term, “total loss” 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 75% of the car’s fair market value. Both Maryland and Virginia laws use a 75% threshold to determine total loss and the statutes are cited below.

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% 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. Maryland defines a salvage vehicle as one whose repair cost exceeds 75% of the fair market value of the vehicle prior to sustaining the damage

MARYLAND TOTAL LOSS THRESHOLD STATUTE

Universal Citation: MD Transp Code § 11-152 (2013)

§11-152.

(a) “Salvage” means any vehicle that:

(1) Has been damaged by collision, fire, flood, accident, trespass, or other occurrence to the extent that the cost to repair the vehicle for legal operation on a highway exceeds 75% of the fair market value of the vehicle prior to sustaining the damage, as determined under §

Universal Citation: MD Transp Code § 11-152 (2013)

§11-152.

(a) “Salvage” means any vehicle that:

(1) Has been damaged by collision, fire, flood, accident, trespass, or other occurrence to the extent that the cost to repair the vehicle for legal operation on a highway exceeds 75% of the fair market value of the vehicle prior to sustaining the damage, as determined under § 13-506(c)(4) of this article;

(2) Has been acquired by an insurance company as a result of a claim settlement; or

(3) Has been acquired by an automotive dismantler and recycler:

(i) As an abandoned vehicle, as defined under § 25-201 of this article; or

(ii) For rebuilding or for use as parts only.

(b) For purposes of this section, a vehicle has not been acquired by an insurance company if an owner retains possession of the vehicle upon settlement of a claim concerning the vehicle by the insurance company.

VIRGINIA TOTAL LOSS THRESHOLD STATUTE

The chapters of the acts of assembly referenced in the historical citation at the end of this section may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.