A vehicle is designated a total loss when the reasonable cost to repair it, plus its salvage value, equals or exceeds a set percentage of its actual cash value (ACV). In Missouri, for most newer vehicles (under 6 years old generally), state law requires that a car be declared a total loss if repair costs plus salvage value are at least 80% of the ACV at the time of the accident.
For example, if a car’s pre-accident value is $10,000, and the estimated repairs are $5,000 with a salvage value of $3,000, the combined amount ($8,000) would meet the 80% threshold, meaning the insurer can classify the car as a total loss.
Insurers use this approach to judge whether it’s economically practical to repair a car or pay out the ACV. Vehicles falling below the threshold may continue to be considered repairable, meaning they won’t get a salvage or total loss title by law.
Contact a car accident lawyer in St. Louis today to pursue compensation for damages.
Certain Costs Are Excluded From The Calculation
In Missouri, specific costs are excluded when calculating whether a vehicle meets the 80% threshold for a total loss determination. Items such as airbag replacement, tire replacement, stereo repairs, hail damage, and sales tax on parts cannot be included in the repair cost total used in the statutory formula. These exclusions mean that even if those repairs are necessary, the car might not be totaled, even if the final bill for all repairs is higher than the 80% threshold.
How Insurers Decide if an Older Vehicle is a Total Loss
For vehicles older than six years in Missouri, insurers are not legally bound by the state’s 80% total loss calculation. Instead, insurance companies have much more discretion when deciding if an older car is declared a total loss. While some companies might still use the 80% figure as a guideline, each insurer can apply its own internal standards and thresholds based on what makes sense for them economically.
Typically, the insurer will weigh the estimated repair costs plus salvage value against the car’s actual cash value (ACV). If fixing the car costs about as much as, or more than, what the car is worth – even if the threshold isn’t exactly 80% – the insurer may decide it makes more sense to pay out the ACV and consider the car totaled — a St. Louis personal injury attorney understands how insurance companies work and will fight for your rights.
Disputing a Total Loss
If your vehicle is declared a total loss, you may disagree with the insurance company’s offer if you believe it doesn’t reflect your car’s true value or leaves you unable to secure a suitable replacement. Drivers often dispute a total loss settlement if the insurer’s payout for the actual cash value (ACV) is much lower than expected or appears inconsistent with local vehicle prices.
Ways to Challenge an Unfair Total Loss Offer
You can submit your own evidence, such as recent photos, service records, recent repairs, maintenance receipts, or comparable vehicle listings in your area to show that your car’s condition supports a higher value. Many insurance policies also contain an “appraisal clause,” which allows you to request an independent, third-party appraisal to help resolve disputes with your insurer.
Seeking External Help
If the insurance company’s process does not appear fair, or you feel the company is acting in bad faith, you have the right to file a formal complaint with the Missouri Department of Commerce and Insurance. In cases where there is evidence of deceptive or unfair treatment from the insuarnce company, taking legal action may help enforce your rights and ensure you receive proper compensation.
If you have any questions or need help with a car accident claim, contact us to schedule a free consultation.