When an accident causes extensive or costly damage to your vehicle, it’s possible
that Progressive Insurance will declare your vehicle a total loss.
The total loss vehicle claim procedure takes our business experience, customer
expectations and state laws and regulations into account, so the process is as fast
and easy as possible. If your vehicle qualifies for a total loss, our claims
representatives will manage the process for you, as well as answer any questions
you may have.
What is a total loss vehicle claim?
In general, your vehicle will be declared a total loss when the cost to return it to
pre-accident condition would be as much, or more, than the actual cash value of the
car. For more information, see the examples below.
Actual Cash Value vs Repair Costs
|
| Your vehicle’s actual cash value: | $10,000 |
| Cost to repair: | $3,000 |
| Difference: | $7,000 |
|
| Your vehicle’s actual cash value: | $3,000 |
| Cost to repair: | $4,000 |
| Difference: | $1,000 |
Your vehicle may also be declared a total loss when the repair cost, plus the salvage
value (money recouped when your vehicle is sold through a licensed salvage vendor)
exceeds the vehicle's actual cash value, or if required by state laws or regulations.
(What is salvage?)
|
| Your vehicle’s actual cash value: | $7,000 |
| Cost to repair to pre-loss conditions: | $6,800 |
| Salvage value: | $700 |
| Cost to repair + salvage value: | $7,500 |
Another reason your vehicle may be declared a total loss is if it cannot be safely
or physically repaired to its pre-accident condition.
What happens if my vehicle is declared a total loss?
If your car is declared a total loss, Progressive Insurance does not pay to repair
it. Instead, you will receive a payment based on the actual cash value of the vehicle. In
exchange, you will sign over the title to your vehicle to Progressive, unless you choose
to retain salvage and this is permitted by state law (see “May I Keep My Salvage Vehicle”
for more information). Depending on the individual situation, payment for the vehicle
will be made to the owner, the lienholder(s), or both. Then Progressive Insurance will
sell your damaged vehicle as salvage through a licensed salvage dealer. If you receive a
total loss payment, you may use the money for any purpose, including purchasing a new vehicle.
How much will you pay me for a vehicle declared a total loss?
You’ll receive what is known as the actual cash value* (ACV) of your vehicle. The
actual cash value is the market value of the vehicle taking into consideration pre-loss
condition, options and mileage.
To determine what you’ll receive for a total loss, Progressive Insurance does what
many consumers do to determine how much a car is worth. And to some extent, this procedure
is governed by state statutes and regulations. In general, however, this is our process:
First, Progressive Insurance will determine your vehicle's market value. This usually
includes looking at guidebooks, obtaining quotes from dealers and reviewing online and
newspaper ads to gather information about the market value of vehicle models similar to
yours. Adjustments may be made to account for differences in mileage and accessories. This
information gives us a starting point.
The next step consists of assessing the condition of your car prior to the accident.
Cracked windows, dented, scraped or rusted parts, and other excessive wear and tear or
damage, such as a badly stained interior, will decrease its value.
To calculate the actual cash value of your vehicle, subtract the value of prior damage
and excessive wear and tear from your vehicle’s market value. Then subtract the amount
of your collision or comprehensive deductible (if you are insured with us, this is the
deductible you selected when you purchased your auto insurance policy). The result is the
amount you receive for a total loss. For more information, see the example below.
*For Progressive Commercial Auto and select auto insurance policies,
Progressive will pay either the actual cash value or the stated amount of the vehicle,
whichever is less.
|
| Your vehicle’s actual cash value: | $15,000 |
| Your deductible: | $500 |
| Payment for your total loss: | $14,500 |
Will I still owe money on my loan or lease?
If your vehicle is declared a total loss, it’s possible that you may still owe
money on your loan or lease. This situation occurs when the actual cash value of
your vehicle is less than what you owe.
To prevent this situation, you may want to consider adding Loan/Lease Payoff
coverage to your Progressive Insurance policy. This coverage can provide some
financial security for you in case your vehicle is declared a total loss. Loan/Lease
Payoff coverage, commonly referred to as "gap" coverage, may pay the difference
between the actual cash value of your vehicle and what you still owe on your loan
or lease, minus your Comprehensive or Collision deductible. However, the payment made
under this coverage may not exceed 25 percent of the actual cash value. Of course, the
coverage must be added to your policy prior to any accident in order to be utilized.
What if I disagree with the total loss value?
If you disagree with the total loss value determined by Progressive Insurance, you
will be asked to provide documentation that backs up the reason for your disagreement.
Progressive will review the documentation for accuracy and applicability to the total
loss vehicle. If the documentation is credible and affects our assessment of the
actual cash value, your offer will be adjusted. If there is still disagreement, your
Progressive Insurance policy contract describes how an appraisal can be arranged to
resolve any differences.
Is there a pre-determined threshold to determine total loss?
No, Progressive Insurance does not use a pre-determined threshold to determine total
loss, such as when the cost to repair a vehicle reaches a certain percentage of the
actual cash value - except in states that mandate or set specific thresholds.
What happens to my vehicle when it’s declared a total loss?
Generally, your vehicle is sold at a salvage auction or to a licensed salvage vendor
unless you decide to keep your vehicle and doing so is permitted by state law.
In all cases, Progressive Insurance complies with the appropriate laws or regulations
that require obtaining salvage titles or branding/marking the title. When we obtain
salvage at the conclusion of a total loss settlement, we sell it through licensed
salvage vendors. We do not directly sell vehicles determined to be a total loss to
private individuals.
May I keep my salvage vehicle?
Good question. In some cases, Progressive Insurance may allow you to keep your
vehicle after it's declared a total loss. In these cases, we deduct the amount we
would have reasonably expected to obtain for the salvage. However, your vehicle may
need to be re-titled to indicate that it’s salvage depending on the law in your state.
If you retain salvage in a state requiring reporting and/or re-titling of owner
retained salvage, you will need to comply with these requirements. Depending on state
laws, the vehicle owner or the insurance company may be required to change the title
to a salvage title.
Check with your Claim Representative if you are interested in keeping your vehicle.
Please Note: Some services described above are only available to
customers who purchased coverages such as Comprehensive, Collision, Rental Reimbursement,
Medical Payments, etc., before their loss. Coverage is subject to the terms of your
policy. Please refer to your insurance policy to verify which coverages you have.
*For Progressive Commercial Auto and select auto insurance policies,
Progressive will pay either the actual cash value or the stated amount of the
vehicle, whichever is less.