When is A Vehicle Considered a Total Loss?

By Gary Wickert | December 5, 2013

  • March 18, 2014 at 10:29 pm
    Kevin Badiei says:
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    This article indicates California as a “TLF” state, when in fact California is a 100% TLT state. Therefore, the credibility of this article is in question.

    • September 13, 2016 at 12:35 am
      Liz Stateman says:
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      In all states it is either a TLF state or a percentage threshold. Thats it, end of story. I am an insurance appraiser and have been for 15 plus years and deal with this every day. You and the lawyer both are silly for arguing over something that is cut and dried so to speak. And yes, being an appraiser for so many years it does make me the authority. The end.

      • August 2, 2018 at 10:54 am
        Debra Woodward says:
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        We have a company vehicle that was struck by lightning as my husband was traveling at 60 mph down the road. EVERY electrical piece on the vehicle was dead. There is absolutely no sensors working. They told us that it would be best to total it because they never work correctly after attempts to fix it. They also told us that they felt it to be a safety issue. The insurance adjuster came out and made the decision to repair the vehicle. It has been a nightmare!!! They allow the service dept to order only four sensors, they replace those, wait for them to show up after another week and them allow them to order more parts. This is a company vehicle with commercial insurance. They told us it was a money issue as it is a $70,000.00 vehicle. We haul a trailer with heavy equipment and are terrified of having a sensor go out and not be able to stop the truck. We live in Florida. When the lightning struck, my husband had no steering, no brakes, no way to open the doors or let the windows down and it was filling up with smoke from burning wires. When all is paid out it will reach the 80%. Why are they doing this to our company and what can we do to get them to total this piece of metal?

  • March 18, 2014 at 10:33 pm
    Kevin Badiei says:
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    For the author of this article who says that the total loss determination is a subjective standard at the discretion of the insurer:

    “a vehicle is not a total-loss salvage vehicle unless, BASED ON AN OBJECTIVE STANDARD, the cost of repairs exceeds the vehicle’s predamage retail value. ” (Martinez v. Enterprise Rent A Car (2004)

    Lawyers who don’t know the law. Gotta love em :)

  • March 19, 2014 at 10:29 am
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    Kevin, you’re making my case for me. Stop the ankle-biting. You said that: “California case law dictates that “there is a total loss only where costs of repair exceed the pre-repair value of the vehicle.” Agreed. That is precisely why it is a TLF state. You just stated the “formula.”

    You then state: “The TLT in California IS IN FACT DICTATED BY THE STATE. Therefore, the above quote from the article is completely irrelevant. You even say yourself “California case law dictates that “there is a total loss only where costs of repair exceed the pre-repair value of the vehicle.” Carson v. Mercury Ins. Co., 210 Cal. App. 4th 409 (Cal. App. 2012).”

    This is NOT a total loss threshold (TLT). Please read the article more carefully. A TLT is a specific percentage established by state statute or regulation. California has NO such specific percentage. Alabama’s percentage (i.e., their TLT), for example, is 75%. In Nevada the TLT is 65%. These are TLT states. If California is a TLT state, what is the state-mandated percentage? There isn’t one, because California follows the the Total Loss Formula (TLF) which is: ”

    The California Insurance Commissioner kindly advised me that California has an “informal rule of thumb” that “if the cost of repair AND SALVAGE value exceeds 70% of the actual cash value of the vehicle,it is considered a total loss.” You state this is wrong, but I am accurately reporting what the Commissioner told me over the phone. That doesn’t make it a TLT state. It is not a TLT that the state requires its insurers to follow. Rather, California is, as my article states, a TLF state. You are making my point for me and I think your vitriol and obsession with an article I wrote from a 50-state perspective stems from a misunderstanding the the vernacular I am using. California is a TLF state, as the article above states. If you can point to a specific Total Loss Threshold (TLT) percentage (e.g., 70% in Arkansas, a TLT state), I will amend the article on our website and change my book, “Automobile Insurance Subrogation In All 50 States” accordingly. But I don’t think you’ll be able to, because all you done in your ankle-biting rant is to confirm that California is a TLF state.

    The good news is, I am not going to send you a bill for taking up my time to respond to your baseless criticism of my article and your personal attacks on me.

    • September 13, 2016 at 12:39 am
      Liz Stateman says:
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      In every state it is either a percentage threshold or a TLF. One or the other. Thats it, end of story. I am an insurance appraiser and have been for over 15 years and deal with this all the time. Just a FYI. and between me and you, why would Kevin not say what his profession was? Huh, makes you wonder if he even has or had a profession besides arguing. Huh who is the lawyer with all the arguing I wonder. Maybe he is a wanna be lawyer.

  • March 20, 2014 at 1:14 am
    Kevin Badiei says:
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    1) You’re going to send me a bill? I look forward to receiving your bill. I look even more forward to throwing your bill in the trash after I receive it, and not paying it as well.

    2) Apparently you cannot read because you did not understand anything I said in my reply. California IS in fact a TLT state. The case law of Martinez v. Enterprise Rent A Car (2004) states that a vehicle is not “uneconomical to repair” under vehicle code 544 unless the cost of repairs exceed the predamage value of the vehicle. This standard was also upheld in Carson v. Mercury Insurance (2012) where a vehicle worth $24,500 had $17,722 in damage. The Carson case decided that the vehicle was NOT a total loss because the $17,722 cost of repair did not exceed the $24,500 value of the vehicle. Therefore, California’s total loss threshold is when the cost of repair exceeds the predamage value of the vehicle. This means that California’s total loss threshold is 100% of the vehicle’s predamage value. Only then does a vehicle meet the definition of “uneconomical to repair” under vehicle code 544 and therefore become a total loss. In this regard, the Martinez court stated:

    “a vehicle is not a total-loss salvage vehicle unless, BASED ON AN OBJECTIVE STANDARD, the cost of repairs EXCEEDS THE VEHICLE’S PREDAMAGE RETAIL VALUE.” (Martinez v. Enterprise Rent A Car (2004))

    “Logically, A VEHICLE IS “UNECONOMICAL TO REPAIR” WHEN THE COST OF REPAIRS EXCEEDS THE VEHICLE’S UNDAMAGED FAIR MARKET VALUE.” (Martinez v. Enterprise Rent A Car (2004))

    “Further, defining a “total loss salvage vehicle” under section 544 as one where the cost of repairs exceeds the vehicle’s PREDAMAGE fair market value is consistent with section 4453.   That section sets forth the information required on a vehicle registration card.   Certain vehicles must be specifically identified, including “[a] motor vehicle rebuilt and restored to operation that was previously declared to be a total loss salvage vehicle BECAUSE THE COST OF REPAIRS EXCEEDS THE RETAIL VALUE OF THE VEHICLE.” (§ 4453, subd. (b)(1), emphasis added.)” (Martinez v. Enterprise Rent A Car (2004)

    “In sum, a “total loss salvage vehicle” as defined by section 544 IS ONE WHERE THE COST OF REPAIRS EXCEEDS ITS PREDAMAGE RETAIL VALUE, i.e., IT IS “UNECONOMICAL TO REPAIR”. Moreover, whether the vehicle qualifies as such IS ESTABLISHED BY ONJECTIVE STANDARDS.” (Martinez v. Enterprise Rent A Car (2004))  

    “there is a total loss only where costs of repair exceed the pre-repair value of the vehicle. (CITING MARTINEZ V. ENTERPRISE RENT A CAR (2004) 119 CAL.APP.4TH 46, 54-56 13 CAL. RPTR. 3D 857).” (Carson v. Mercury Insurance (2012))

    “Mercury’s motion in limine sought to exclude evidence Carson’s vehicle was a total loss on the grounds the policy gave Mercury the option to repair the car and there is no reason why it should be obligated to declare the car a total loss. Mercury explained the vehicle was valued at approximately $24,500 and the cost of repair, after deducting charges for towing, was only $17,722.29 AMD THEREFORE THE VEHICLE NEED NOT BE DELCARED A TOTAL LOSS. Carson opposed the motion, asserting the implied covenant of good faith and fair dealing required Mercury to calculate if the vehicle was a total loss by also considering the vehicle’s diminution in value after the repairs, THE VEHICLE’S SALVAGE VALUE, and the loss of use of the vehicle while the vehicle is being repaired. The court granted Mercury’s motion in limine, excluding evidence Carson’s vehicle was a total loss.” (Carson v. Mercury Insurance (2012))

    You may notice that no where in either Martinez or Carson was salvage value mentioned as a factor in the court’s determination of a total loss. In fact, Carson argued that salvage value should have been a factor, and the court ruled that it was not, citing Martinez v. Enterprise Rent A Car (2004) as its authority.

    Therefore, California is not a TLF state, and you are wrong. California is a 100% TLT state. It appears you did not even bother to READ the Carson case to see that Carson was the one arguing that salvage value should be a factor in determining a total loss. The court disagreed with Carson’s argument, and cited Martinez v. Enterprise Rent A Car (2004) as its authority. Therefore, salvage value is not a factor in determining whether a vehicle is “uneconomical to repair” under vehicle code 544 and therefore a total loss in California.

    I could care less what the Insurance Commissioner “told” you. The Insurance Commissioner’s statements are irrelevant since they are in conflict with case law on the subject. The Insurance Commissioner’s statements do not supersede or overrule case law decided by the California Court of Appeal. You should know this as a lawyer. In fact, case law supersedes and overrules the Insurance Commissioner’s statements.

    In addition, vehicle code 11515 states that a vehicle cannot be issued a salvage certificate unless it is first a “total loss salvage vehicle.” A “total loss salvage vehicle” is defined by vehicle code 544. Vehicle code 544 defines a “total loss salvage vehicle” as a vehicle that is “uneconomical to repair”. The statutory terms “uneconomical to repair” in vehicle code 544 were analyzed and interpreted by the Martinez court to mean when the cost of repair exceeds the predamage value. This means that a vehicle can only be issued a salvage certificate when its cost of repair exceeds its predamage value and therefore it is “uneconomical to repair” as required by vehicle code 544 and therefore is a “total loss salvage vehicle” as defined by vehicle code 544.

    Therefore, a vehicle that does not have its cost of repair exceeding its predamage value is not “uneconomical to repair” as required by vehicle code 544 and therefore does not meet the definition of a “total loss salvage vehicle” as defined by vehicle code 544. Pursuant to vehicle code 11515, a vehicle that is not a “total loss salvage vehicle” cannot be issued a salvage certificate, since vehicle code 11515 requires that the vehicle be a “total loss salvage vehicle” and only applies to a vehicle that is a “total loss salvage vehicle”. Read section 11515. It clearly says throughout all its subsections that a vehicle is required to be a “total loss salvage vehicle” and that it applies only to a “total loss salvage vehicle”. Vehicle code 11515(f) even finishes off by saying:

    “(f) THIS SECTION DOES NOT APPLY to a vehicle that has been driven or taken without the consent of the owner thereof, until the vehicle has been recovered by the owner AND ONLY IF THE VEHICLE IS A TOTAL LOSS SALVAGE VEHICLE.”

    Your own previous post/email where you refer to me as the “noisy Kevin Badiei” even states:

    “Where a vehicle’s undamaged fair market value is lower than the cost of repairs, it would be wasteful to repair it. A comparable vehicle could be purchased for less money. However, if it costs less to repair the vehicle than to purchase another comparable one, it would be wasteful not to repair it. Logically, A VEHICLE IS “UNECONOMICAL TO REPAIR” WHEN THE COST OF REPAIRS EXCEEDS THE VEHICLE’S UNDAMAGED FAIR MARKET VALUE. Martinez v. Enter. Rent-A-Car Co., 119 Cal. App.4th 46 (Cal. App. 2004).” (emphasis added)

    I like how I have to educate you on the law even though you’re the lawyer with almost 30 years experience. Send me your bill, so I can throw it in the trash, because that’s where it belongs. Are you familiar with the game of chess? Then you should be familiar with this term, “check mate.”

  • March 20, 2014 at 1:23 am
    Kevin Badiei says:
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    To answer your question once again, THE TOTAL LOSS PERCENTAGE FOR CALIFORNIA IS 100%.

  • March 20, 2014 at 8:45 am
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    Kevin, I’m beginning to suspect that you are actually a child, in which case I apologize for the harsh tone and frustration at your inability to understand the law. I’m actually very proud of you for frequenting an insurance claims website at your age. You’ll do well later in life and I’m sure your parents are very proud of you. Allow me to close this argument with an explanation that a child (no offense intended – we were all young once) can understand:

    Unless a state specifies a specific percentage which serves as the Total Loss Threshold (TLT), the state is considered, for purposes of my article, to be a Total Loss Formula (TLF) state, like California. Beyond that you are simply engaging in a child-like battle of semantics, and I’m sure we both have better things to do than that.

  • March 20, 2014 at 10:46 pm
    Kevin Badiei says:
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    Your prior suspicion that I was an auto repair technician was wrong. Your current suspicion that I am a child is wrong as well. Your total loss threshold for California is wrong as well.

    I keep trying to tell you that the state of California HAS SET a specific percentage of 100%. The state of California has interpreted the terms “uneconomical to repair” in vehicle code 544 to mean when the cost of repairs exceed the predamage value of the vehicle. This means that the total loss threshold is 100%, and not a TLF threshold. This interpretation of vehicle code 544 was made in Martinez v. Enterprise Rent A Car (2004).

    In addition, in Carson v. Mercury Insurance (2012), Carson argued that the salvage value should be a factor in determining whether a vehicle is a total loss. THE COURT REJECTED CARSON’S ARGUMENT, citing the interpretation in Martinez v. Enterprise Rent A Car (2004). This means that California is not a TLF state, because NEITHER THE MARTINEZ DECISION NOR THE CARSON DECISION DECIDED THAT SALVAGE VALUE WAS A FACTOR IN DETERMINING WHETHER A VEHICLE IS A TOTAL LOSS. IN FACT, THE CARSON DECISION EXPRESSLY REJECTED SALVAGE VALUE AS BEING A FACTOR. I don’t know why this is so hard for you to understand. I have quoted the relevant areas of both case laws in my previous posts and emails to you and you still don’t get it. Go back to law school and learn how to read case law. I’m not trying to the go to the moon here.

    Your article is legal malpractice, because you have the wrong state threshold for California. Read Martinez v. Enterprise Rent A Car (2004) and Carson v. Mercury Insurance (2012). Ignore anything the insurance commissioner “told” you, ignore internet “articles”, and go off California case law on the subject, since that is the only legal authority. Go back to law school, because you clearly have no clue what you are doing.

    Your article is clearly not a credible, reliable article because you did not get the California threshold correct, and you did not even correct the threshold when I have explained the California law to you. Your sir, are utterly incompetent.

    • April 26, 2018 at 7:04 pm
      Jim Bonner says:
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      So what is the law if the insurance company repairs the car that was in an accident , we own from new, and did not tell us it was a Total Loss, and we go to a deal ship to trade it in, and they run Carfax with it stating Total Loss.

  • March 20, 2014 at 10:48 pm
    Kevin Badiei says:
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    Enjoy having the wrong threshold for California in your article. Good work.

  • March 22, 2014 at 11:49 pm
    Kevin Badiei says:
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    http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=VEH&sectionNum=544.

    California vehicle code 544 states:

    ““Total loss salvage vehicle” means either of the following:

    (a) A vehicle, other than a nonrepairable vehicle, of a type subject to registration that has been wrecked, destroyed, or damaged, to the extent that the owner, leasing company, financial institution, or the insurance company that insured or is responsible for repair of the vehicle, considers it UNECONOMICAL TO REPAIR the vehicle and because of this, the vehicle is not repaired by or for the person who owned the vehicle at the time of the event resulting in damage.

    (b) A vehicle that was determined to be UNECONOMICAL TO REPAIR, for which a total loss payment has been made by an insurer, whether or not the vehicle is subsequently repaired, if prior to or upon making the payment to the claimant, the insurer obtains the agreement of the claimant to the amount of the total loss settlement, and informs the client that, pursuant to subdivision (a) or (b) of Section 11515, the total loss settlement must be reported to the Department of Motor Vehicles, which will issue a salvage certificate for the vehicle.
    (Amended by Stats. 2003, Ch. 451, Sec. 4. Effective January 1, 2004.)”

    “When the term “UNECONOMICAL TO REPAIR” is given its ordinary meaning, it is in line with the above definition of “total loss.” The dictionary definition of “uneconomical” is “costly, wasteful.” (Webster’s 3d New Internat.   Dict. (1986) p. 2493.) Thus, the interpretation of section 544 requires a determination of when it would be “wasteful” to repair a damaged vehicle. Clearly, where a vehicle’s undamaged fair market value is lower than the cost of repairs, it would be wasteful to repair it.   A comparable vehicle could be purchased for less money.   However, if it costs less to repair the vehicle than to purchase another comparable one, it would be wasteful not to repair it. Logically, a vehicle is “UNECONOMICAL TO REPAIR” when the cost of repairs exceeds the vehicle’s undamaged fair market value.” (Martinez v. Enterprise Rent A Car (2004))

    “a vehicle is not a total-loss salvage vehicle unless, BASED ON AN OBJECTIVE STANDARD, the cost of repairs exceeds the vehicle’s predamage retail value. ” (Martinez v. Enterprise Rent A Car (2004))

    “In sum, a “total loss salvage vehicle” as defined by section 544 is one where the cost of repairs exceeds its predamage retail value, i.e., it is “UNECONOMICAL TO REPAIR.”   Moreover, whether the vehicle qualifies as such is established BY OBJECTIVE STANDARDS. The retail value can be obtained from a widely accepted source such as the Kelley Blue Book. Cost of repairs can be ascertained through estimates from qualified mechanics.” (Martinez v. Enterprise Rent A Car (2004))

    Pursuant to the above authority, the terms “uneconomical to repair” in vehicle code 544’s definition of a “total loss salvage vehicle” mean when the cost of repair exceeds the vehicle’s predamage value. Therefore, California is clearly a TLT state, and the TLT is 100%. California is not a TLF state as this article indicates. This article has the incorrect total loss standard for California. Therefore, the attorney who wrote this article is a moron.

    • April 11, 2014 at 5:25 pm
      jose says:
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      kevin I need your help can I contact you via phone or email.
      PS YOU ARE THE MAN.

  • April 1, 2014 at 6:58 pm
    susan says:
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    I am a victim of a total loss scam. The locals are using it as a way to steal my vehicle with the assistance of the insurance co. I think it was intended to protect insurance companies from being ripped-off, but in this case, I have been victimized twice. once when i was rammed into by a texting, tailgaiting, idiot wearing platform shoes(she had a problem telling the difference between the break and the gas),who did not seem to care that she had injured my back, but was more concern about getting her cell phone app to work–and then i was victimized by the insurance co. by helping the local body shop steal the vehicle for one of their friends.



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