A car is "written off" when an insurance company declares it a total loss after an accident, theft, or other damage. This means the cost to repair the vehicle exceeds a certain percentage of its actual cash value (ACV), or it's damaged beyond repair. Instead of paying for repairs, the insurer pays you the car's pre-accident value, minus your deductible, and takes ownership of the damaged vehicle.
The primary factor is the damage-to-value ratio. Most insurers use a threshold between 70% and 75% of the car's ACV. For example, if your car is worth $10,000 and the repair estimate is $8,000, it will likely be written off. A car can also be declared a total loss if it's structurally unsound or deemed unsafe to repair, even if the repair cost is slightly below the threshold.
The financial outcome depends on your insurance coverage. If you have a car loan or lease, the insurance payout goes first to the lender. If the payout is less than what you owe, you're responsible for the difference unless you have gap insurance. This is a critical coverage for those financing a new car, as depreciation can create a significant gap between the car's value and the loan balance.
| Common Total Loss Thresholds by State (as a % of ACV) | Example: Car ACV = $15,000 | Typical Threshold Amount |
|---|
| Texas (100%) | Total loss if repairs ≥ $15,000 | Mandatory if damage equals value |
| Colorado (100%) | Total loss if repairs ≥ $15,000 | Mandatory if damage equals value |
| Iowa (50%) | Total loss if repairs ≥ $7,500 | Low threshold, more cars totaled |
| Kentucky (75%) | Total loss if repairs ≥ $11,250 | Common industry standard |
| Oklahoma (60%) | Total loss if repairs ≥ $9,000 | Moderate threshold |
After a write-off, the car's title is usually branded as "salvage," meaning it cannot be legally driven until it's rebuilt and passes a rigorous inspection. Some people choose to "buy back" the salvage vehicle from the insurance company for a reduced payout, but this is a complex process best left to experienced mechanics or hobbyists.
