State Farm considers a vehicle a total loss when it has been damaged beyond repair or its damage will cost more to repair than the car’s actual cash value (ACV). A vehicle that is considered a total loss by State Farm will not be worth the time, money and effort to restore, according to State Farm’s insurance adjusters.
When you have an accident in your vehicle, or your car is damaged in some other way, like a tree limb falling on it, State Farm will evaluate the damage to determine whether or not the vehicle is totaled. To do this, State Farm takes several factors into consideration, including the extent of the vehicle’s damage and the current cash value of the car.
- The cost of repairs vs. the vehicle’s actual cash value, based on the vehicle’s year, make, model, mileage, and condition.
- Whether or not the vehicle can be repaired safely.
- Whether or not the damage to the vehicle meets the state’s requirements to declare a total loss.
Some states use a “total loss threshold” rule when declaring a car totaled, meaning that the state will total a car if the damage exceeds a set percentage of its value. Other states use a “total loss formula,” which is based on whether or not the cost of repairs plus the scrap value of a vehicle equals or exceeds the car’s actual cash value.
Once State Farm has deemed a vehicle a total loss, a customer should collect any personal possessions that are still in the vehicle, including license plates and registration paperwork. They will then need to transfer their title to State Farm, as the insurance company will be responsible for disposing of the totaled vehicle. This also makes it easier for State Farm to deal directly with lenders if the car is financed or leased.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines
. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.