Total Loss Threshold

Also known as: TLT, total loss formula

The Total Loss Threshold is the percentage of a vehicle's pre-loss value at which an insurer must declare it a total loss. Thresholds are set by state law (statutory) or insurance company policy (contractual) and typically range from 65% to 100%.

More detail

Statutory total-loss states include Texas (100%), Iowa (50%), and many others — see the per-state pages for specifics.
Some states use a 'Total Loss Formula' (TLF) — repair cost + salvage value > pre-loss value — instead of a fixed percentage.
Even when a vehicle is repairable, an insurer may declare it a total loss if doing so is cheaper than repair.
If your vehicle has a salvage or rebuilt title, the insurer's valuation may also include a salvage/rebuilt-title adjustment of 20-40% off the otherwise-comparable value. The high end of that range is often unsupported by salvage-titled comps in your local market.

Related terms

Actual Cash Value (ACV)

Actual Cash Value is the dollar amount your insurance company is required to pay you for a totaled vehicle. ACV represents the price you would pay to buy a comparable used vehicle of the same make, model, year, mileage, and condition in your local market — not the vehicle's original price, replacement cost, or what you still owe on a loan.

Salvage Title

A Salvage Title is a designation placed on a vehicle's title after it has been declared a total loss by an insurance company. Once a vehicle has a salvage title, it cannot be legally driven on public roads in most states until it is repaired and re-inspected, after which it receives a Rebuilt or Reconstructed title.

Constructive Total Loss

A Constructive Total Loss is a vehicle that is not physically destroyed but where the cost of repair plus salvage value exceeds the pre-loss value. Most total-loss declarations are constructive, not literal.

Free review first

Need help with a real total-loss claim?

Your consultation and offer review are free. The Appointed Appraiser Service is $495. It includes the Appraisal Research, our appointment as your appraiser under your insurance policy's appraisal clause, determining the amount of loss with your insurer's appraiser, and the appraisal award letter.

At least $1,000 more, or your fee is waived. This applies once we accept your consultation and serve as your appraiser. The starting point is your insurer's offer on the day we accept. If the appraisal award, or a higher offer your insurer makes instead, is less than $1,000 above it, we waive our $495 Appointed Appraiser Service fee. If an umpire is needed, the umpire's fee is separate. We pre-authorize your card only after we accept your consultation, so there's no upfront payment.

Get My Free Appraisal Consultation See full pricing

Results vary. See terms.