When Is My Car a Total Loss in California?

November 27, 2025 Posted In Car Accidents

In California, your car is considered a total loss when the cost to repair it plus its salvage value equals or exceeds its actual cash value (ACV) immediately before the vehicle accident. When you know the total loss formula, you’ll better understand how insurers determine whether to repair or declare your vehicle totaled.

What “Total Loss” Really Means

Under California Department of Motor Vehicles (DMV) guidance, a “total loss salvage vehicle” is one that has been damaged so badly that it is considered uneconomical to repair. In other words: when the combined cost to fix the car and the value the insurer could recover by selling its parts (salvage value) is at least as much as what the car was worth before the crash, the car is deemed a total loss.

The Total Loss Formula in California

Unlike some states that use a fixed percentage threshold, California applies the following formula:

Cost of Repairs + Salvage Value ≥ Actual Cash Value (ACV)

For example: if your car’s ACV is $12,000, repairs estimate at $9,000 and salvage value is $3,500, then the sum equals $12,500, which means the vehicle may be declared a total loss.

What Is “Actual Cash Value” (ACV)?

ACV is the market value of your vehicle just before the accident. Insurers look at the year, make, model, condition, mileage, local market data and comparable sales. ACV is not what you originally paid for the car, and might be lower than your loan balance.

What Happens After Your Car Is Declared a Total Loss?

If an insurer declares your car a total loss:

• The insurer must pay you the ACV of the car (minus your deductible if you have collision coverage).
• The insurer will take ownership of the vehicle and apply for a salvage certificate from the DMV.
• If you owe more on your loan than the payout, you remain responsible for the difference unless you had Gap insurance protecting that amount.

Can You Keep the Vehicle After It’s Totaled?

You may buy the vehicle back from the insurer, but your payout will be reduced by the salvage value. If you keep the vehicle, you must register it as a salvage vehicle and follow regulations before driving it again.

What Can You Do If You Disagree With the Insurer’s Valuation?

You have the right to challenge the ACV the insurer assigns. You can gather evidence such as recent comparable vehicle listings, maintenance records, photos documenting excellent condition, and independent appraisals. Your documentation may help negotiate a higher settlement.

How a Perris Vehicle Accident Attorney Can Help

A Perris Personal Injury Lawer can review the total loss determination, evaluate the insurer’s ACV calculation, and identify errors that lead to undervalued payouts. Lawyers understand how insurers assess repair estimates, salvage values, and comparable vehicles, which helps ensure the payout reflects the true value of your car. They will challenge improper denials, negotiate directly with the insurance company, and protect you from unfair settlement tactics. When the insurer refuses to act reasonably, an attorney can escalate the dispute and pursue legal action if necessary.