For example, if a car has an ACV of $10,000 and the cost to repair it is $8,000, the insurance company would likely declare it a total loss. This is because the cost to repair the car is more than 80% of its ACV.
In some cases, an insurance company may declare a car a total loss even if the cost to repair it is less than the ACV. This can happen if the car has significant damage that affects its safety or operability. For example, if a car has frame damage or a blown engine, the insurance company may declare it a total loss even if the cost to repair it is less than the ACV.
When a car is declared a total loss, the insurance company will pay the owner the ACV of the vehicle. The owner can then use this money to buy a replacement car or to repair their current car.
It is important to note that the decision of whether or not to declare a car a total loss is made by the insurance company. The owner of the car has no say in the matter.
