Total loss, appraisal and property damage terms, in plain English.
A total loss is when an insurer decides a damaged car isn't worth repairing and pays its value instead. Depending on the state, that's when repair costs reach a set percentage of the car's value, or when repairs plus salvage value reach the car's value (the Total Loss Formula).
Actual cash value is what the car was worth right before the loss: what a comparable vehicle would sell for in the local market, adjusted for mileage, options and condition. It's the basis of the insurer's total-loss offer.
The Appraisal Clause is a provision in most auto policies that lets either side ask for an appraisal when they disagree on the amount of a loss, such as a car's value. Each side picks an appraiser, and if they can't agree, an umpire decides. It resolves the value dispute without a lawsuit.
In an appraisal under the policy's Appraisal Clause, the umpire is a neutral third person who decides the amount when the two sides' appraisers can't agree. Under typical policy wording, an amount agreed by any two of the three sets the loss.
The Total Loss Formula declares a car totaled when the cost of repairs plus its salvage value is equal to or more than its actual cash value. Many states use it instead of a fixed percentage threshold.
A total loss threshold is the percentage of a car's value at which a state generally treats it as totaled: when repair costs reach that share of the actual cash value. Thresholds differ by state.
Salvage value is what a damaged car would sell for as it is, usually to a rebuilder, a parts buyer or at a salvage auction.
Diminished value is the resale value a car loses after it's repaired from an accident, because its history now shows the damage. The claim is usually made against the at-fault driver's insurer; rules vary by state.
A comparable vehicle is a recent for-sale listing or sale of a car like the one being valued: same year, make, model and trim, similar mileage and options, in the same market. Comparables are the evidence behind a car's value.
Fair market value is what a car would sell for between a willing buyer and a willing seller in the local market, based on what comparable vehicles actually sell for.
Loss of use is compensation for not having your car while it's being repaired or replaced, often measured by the cost of a comparable rental. It's usually claimed from the at-fault driver's insurer; rules vary by state and policy.
A property-damage-only claim is a car accident claim with damage to the vehicle and no bodily injury. Injury firms usually turn these callers away, though a low total-loss offer or lost resale value can still be worth pursuing.
A referral agreement between law firms sets out which matters one firm sends to the other and what comes back. In the True Claims program, nearby firms send property-damage-only callers and get every injury case back; there's no fee sharing.
A demand letter is a written request to the insurer for a specific amount, backed by evidence such as a valuation from comparable vehicles. It's often the first step before appraisal or other remedies.