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Total Loss Settlement Formula:
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A vehicle is declared a total loss when the cost of repairs exceeds a certain percentage of the vehicle's actual cash value (ACV), typically between 70-80% depending on state regulations and insurance company policies.
The calculator uses the total loss settlement formula:
Where:
Explanation: The settlement amount represents what you would receive from your insurance company after a total loss, accounting for your policy deductible.
Details: Insurance companies determine ACV by evaluating your vehicle's pre-accident condition, including age, mileage, features, and local market values. The deductible is the amount you agreed to pay out-of-pocket when you purchased your policy.
Tips: Enter the ACV provided by your insurance company and your policy deductible amount. Both values must be positive numbers.
Q1: What if my settlement calculation is negative?
A: The calculator will show $0 as insurance settlements cannot be negative. If your deductible exceeds the ACV, you would typically receive no payment.
Q2: Can I negotiate the ACV with my insurance company?
A: Yes, you can provide evidence of your vehicle's condition, recent upgrades, or comparable vehicles in your area to support a higher ACV.
Q3: Are there other factors that affect my settlement?
A: Some policies include additional coverage like gap insurance, which covers the difference between the ACV and any outstanding loan balance.
Q4: What happens to my totaled vehicle?
A: Typically, the insurance company takes possession of the vehicle and sells it for salvage, which may affect your settlement if you wish to keep the vehicle.
Q5: Are deductibles waived in some total loss situations?
A: In some cases, if another driver is at fault, their insurance may cover the loss without you paying your deductible.