If your car is declared a total loss from hail damage, it means the cost to repair the damage exceeds a significant percentage of the car's actual cash value (ACV). Your insurance company will pay you the car's ACV, minus your deductible, and then take ownership of the salvaged vehicle. This ACV is determined by your car's pre-damage market value, considering its age, mileage, and condition.
The specific threshold for a total loss varies by state and insurer. While many use a "Total Loss Formula" where repairs exceeding 75-80% of the ACV result in a total loss, some states have set percentages by law. For example, if your car is worth $15,000 and the repair estimate is $12,500, it will likely be totaled because the repairs cost over 80% of its value.
| Factor | Impact on Total Loss Decision & Payout |
|---|
| State Regulations | Determines the legal total loss threshold (e.g., 70% in Texas, 75% in Alabama, 100% "Total Loss Formula" in many others). |
| Insurance Policy Type | Comprehensive coverage is required for hail damage claims. Liability-only policies provide no coverage. |
| Actual Cash Value (ACV) | The pre-hail market value of your vehicle based on its year, make, model, mileage, and options. |
| Cost of Repairs | The estimate from a body shop to repair all dents, which can be extremely high due to specialized paintless dent repair (PDR) or panel replacement. |
| Your Deductible | The amount subtracted from the final settlement. A $1,000 deductible on a $10,000 ACV payout means you receive $9,000. |
| Salvage Title | If you keep the totaled car, it will receive a salvage title, which can be difficult and expensive to insure and register later. |
After the total loss is declared, you have two primary options. First, you can accept the settlement, surrender the car to the insurer, and use the money for a new vehicle. Second, you can sometimes "retain the salvage," meaning you keep the car for a reduced payout. This is only advisable if you plan to drive the car as-is or are confident you can repair it cheaply, but be prepared for the complications of a salvage title.
