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All About Insurance Companies and ‘Totaled’ Vehicles

woman talks on her cellular phone next to a minor car accident scene

What does it mean when a vehicle is “totaled”? We’ve probably heard at least one of our friends recount a car accident in which someone “totaled” their vehicle, only to see them driving it around again some weeks later.

Thing is, it’s not up to the vehicle owner to determine the extent of damage and whether that damage is repairable; it’s up to our insurance companies. 

“Policyholders and insurance companies evaluate damage differently,” Carfax writes. “Where you may view the damage as a total loss, the insurer may look at your car as one that can be fixed. The bottom line for insurers is helping their bottom line — the cheapest option is typically chosen whether you like that decision or not.”

McCollum Auto Body

At McCollum Auto Body, we know better than most that a car that looks “totaled” often isn’t. In fact, many a happy customer has driven away from the Big Blue M in a vehicle that appeared to be completely totaled when they first brought it into the shop.

So what does it really mean to total a vehicle? Is that the same as when an insurance agent determines a car is a “total loss”? Are those two terms interchangeable? How does an insurance company determine when a car is totaled or a total loss in the first place?

There’s a lot to unpack here. Fortunately, at McCollum Auto Body, we’re not just experts at returning vehicles to their pre-loss condition; we’re also well-versed in insurance-related issues.


After An Accident

This topic is one of the most popular questions that customers ask us, so we’ve written about it quite a bit. Check out the McCollum blog for articles on insurance, post-accident responsibilities, local and state law, and other vehicle-related topics.

Also, be sure to read our Ultimate Car Accident Checklist! McCollum also provides a handy online tool that helps us inspect vehicle damage and provide estimates for the cost of repairs.

After an accident, a representative or claim adjuster working for your car insurance company will examine the vehicle and determine the extent of damages. Your particular insurance — comprehensive coverage, collision coverage, gap insurance, etc. — will determine what happens next, how much the vehicle is worth, and how much the insurer will pay for the damage.

‘Total Loss Formula’

If your car is a total loss, the insurance company will cut you a check for the car’s current value (minus your deductible).

Is the vehicle a total loss, though? That’s for your insurance company to determine, and they’re regulated by the states in which they operate.

For example, some states set a total loss threshold. In Oregon, a car with damage totaling 80% of its value is considered totaled, according to In Colorado, the threshold is 100%. Some states, including Washington, use what’s called a total loss formula. Insurers consider the cost of repairs plus the vehicle’s scrap value; if the final number equals or exceeds the actual cash value (ACV) of the car (i.e., what the car is worth), then it’s considered totaled.

Be sure to speak with your auto insurance company to determine your rights and obligations regarding insurance claims. And remember: Each state has its own laws, so be sure to stay up to speed on those.

So although we sometimes use the term “totaled” — as in “my car was totaled” — that doesn’t always mean your insurance company will agree. Sometimes a damaged car that appears totaled can actually be returned to its pre-loss condition rather than being declared a total loss.

That’s what we do at McCollum Auto Body. Call us with any questions.