When your car is involved in an accident in Illinois, the first step is usually filing an insurance claim and taking the vehicle to an auto repair shop. However, what happens if the insurance adjuster declares your vehicle a total loss? Many car owners are unsure what this means or how it affects their claim. That’s why having a basic understanding of the Illinois total loss threshold is essential. In this blog, we explain what it is and how it impacts you as a car owner.
What is Total Loss Threshold?
A total loss threshold refers to the situation in which an insurer deems a damaged vehicle not worth repairing because the repair costs meet or exceed a specific percentage of its ACV (actual cash value). As per the laws, when a car’s repair cost reaches 60%-100% of its ACV, it is declared a total loss.
This is also known as a car being totaled. The total loss threshold percentage varies by state laws. In Illinois, if a car’s repair cost plus its salvage value exceeds its ACV, the vehicle is deemed a total loss. As per the TLF (total loss formula), cars with repair costs around 70-80% of their value can be deemed totaled.
How Does the Illinois Total Loss Formula Work?
If you wonder how the total loss formula works in Illinois, we explain it with an example in this section.
Formula:
Estimated Repair Cost + Salvage Value ≥ Actual Cash Value (ACV)
Example:
Suppose a car has $10,000 ACV, $6,000 repair estimates, and $4,500 salvage value. An insurer will deem it a total loss, as the repair cost ($6,000) + salvage value ($4,500) is $10,500, which is more than the ACV ($10,000).
Self-Insured Exception
If you are self-insured, a 50% threshold may be considered to evaluate your car.
Key Takeaways for Car Owners
Major things that you need to keep in mind about the total loss threshold as a car owner are as follows.
Payment
If your car is totaled, the insurer pays you the ACV of the vehicle minus your deductible.
Valuation
Insurers often use databases like CCC Information Services to determine the ACV of your car.
Dispute Options
As the owner of the car, you can dispute the valuation by providing documentation of the car’s pre-accident condition or listings of comparable vehicles.
Owner Retention
If your car is nine model years old or older or has cosmetic damage but functions safely, you can keep it. However, you must obtain a salvage certificate.
Documentation
In Illinois, car owners are usually required to file a proof of loss within 91 days of the car being totaled.
Illinois Total Loss Help
Here, you learned what total loss is and how its formula works in Illinois. If your car is deemed a total loss, it simply means that it’s no longer fit to hit the road. But you can keep the vehicle in certain situations with a salvage certificate. Need help with the total loss process? We are ADR-Claims, a team of professional appraisers. We will take care of everything and ensure that you get a fair payout for your totaled vehicle. We will even help you get the salvage certificate so you can keep your car for yourself. Contact us right away to book your consultation and discuss your needs.
