What is Total Loss Formula?

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.

Because salvage value is part of the math, a car with a high salvage value can be totaled even when the repair estimate seems reasonable.

Which states use which rule
Total loss threshold

See how the referral program works The one-pager, the referral line, the AI assistant and the Appraisal Clause, set up for you.

More terms

Total loss Actual cash value (ACV)Appraisal Clause Umpire (appraisal)Total loss threshold Salvage value Diminished value Comparable vehicle (comp)Fair market value (FMV)Loss of use Property-damage-only claim Referral agreement (between law firms)Demand letter

Updated 2026-11-01. General information, not legal advice; policy wording and state rules vary. TRUEclaims is not a law firm.