How does State Farm determine a total loss?

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.