# What is total loss?

> A total loss occurs when an insurer determines that a damaged or stolen vehicle meets the applicable standard for being totaled.

Glossary date: May 4, 2026.

## How it works

The decision may compare repair cost with actual cash value or follow a state threshold. Safety and hidden damage can also affect the evaluation.

## Example

A vehicle is worth $12,000 before a crash and needs extensive repairs. The insurer determines it meets the state and policy standard for a total loss.

## Why it matters

The settlement, loan payoff, title status, and ability to keep the vehicle can all depend on the total-loss process.

## What to check on your policy

Ask for the valuation and calculation in writing. Confirm deductible, taxes, title steps, lender payment, and owner-retained salvage rules.

Coverage, definitions, limits, and legal requirements vary by policy and state. Your declarations page and policy forms control your coverage.

## Related terms

- [Actual cash value](https://locations.goautoinsurance.com/car-insurance-glossary/actual-cash-value.md)
- [Salvage title](https://locations.goautoinsurance.com/car-insurance-glossary/salvage-title.md)

- [Car insurance guide](https://locations.goautoinsurance.com/car-insurance-guide.md)
- [Complete glossary](https://locations.goautoinsurance.com/car-insurance-glossary.md)