Here's a breakdown:
* Actual Cash Value (ACV): This is the market value of the car before the accident. It takes into account factors like the car's make, model, year, mileage, condition, and features. It's not the price you paid for the car, but rather what it's worth on the used car market at the time of the accident.
* Repair Costs: This is the estimated cost to repair the vehicle to its pre-accident condition. This includes parts, labor, and any other necessary expenses.
* Total Loss Threshold: If the repair costs reach or exceed the predetermined percentage of the ACV (usually 70-80%), the insurance company will declare the vehicle a total loss.
Other factors that can lead to a car being totaled even if repair costs are below the threshold:
* Structural damage: Severe damage to the frame or unibody can make the car unsafe to repair, even if the cost is below the threshold.
* Safety concerns: If the airbags deployed, or if there's significant damage affecting safety systems, the car might be totaled regardless of repair costs.
* Insurance company policy: Some insurance companies have stricter guidelines than others.
* Parts availability: If parts are difficult or impossible to obtain, the car might be totaled even if the repair cost is theoretically below the threshold.
In short, it's not just about the raw cost of repairs; it's a comparison between the cost of repairs and the car's value. If it's cheaper to replace the car than to repair it, the insurance company will likely total it.
