GEICO will declare a vehicle a total loss if 1) it is too damaged to be safely repaired, 2) repairs would cost more than the vehicle is worth, or 3) the damage meets the total loss guidelines of the state where it’s insured.
GEICO determines a vehicle’s worth by calculating its “actual cash value.” Actual cash value is based on your vehicle’s make and model, mileage, features, add-ons, and condition prior to the accident. It also takes into account how much similar vehicles have sold for recently in your area.
Many states set a total loss threshold, which is the level of damage at which an insurer like GEICO must legally declare a car a total loss. The level of damage is expressed as a percentage of the car’s actual cash value. Depending on the state, the threshold can be from 50% to 100%. For example, a car with damage equaling 50% of its value is totaled in Iowa but considered repairable in Texas, where the threshold is 100%.
Twenty-two states have no specific total loss threshold but rely on a total loss formula. In these states, GEICO must total your car if the cost of repairs plus the vehicle’s scrap value equals or exceeds its actual cash value.
All these different rules can seem a little confusing, which is why car owners are sometimes surprised when their car is totaled.
Only your GEICO auto damage adjuster can decide to total a vehicle, after inspecting it. Your adjuster will contact you within three days of the inspection to review the proposed settlement amount. GEICO will issue payment, generally within 10 business days, to you or to your leasing or financing company.
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