If you were involved in a serious crash caused by another driver, recovering from your injuries is your primary focus. What if your car is in even worse shape than you are?
When is it considered a “total loss,” and what does that mean for how much money you can get for it? Laws around when a vehicle is deemed a total loss vary by state.
How does Tennessee law define a “total loss?”
In Tennessee, a vehicle reaches the total loss threshold when the estimated repair cost added to the “salvage value” is 75% or more of its “actual cash value” (ACV). The idea behind this equation is that likely a car with significant obvious damage, even if its repaired, will have other problems later that are a result of the damage it suffered in the crash.
The “salvage value” is how much the car is worth in its current damaged condition. The “actual cash value” is how much it was worth before the crash. That would be its depreciated value – not how much it cost when it was purchased.
If the insurance company determines that the car is totaled according to state law, it’s required to pay the actual cash value as well as title costs and certain taxes if the owner buys a new vehicle.
Negotiating with an insurance company over whether your car is a total loss in addition to working toward a settlement that will get you the compensation you need for medical bills, lost income and other financial losses due to the crash can be stressful and exhausting – and you’re at a disadvantage against insurance professionals who do this for a living. Having legal guidance can help you get the settlement to which you’re entitled.