How do you know its a Total Loss?

Following an auto accident, a car is typically considered a total loss when the cost to repair to a safe condition is higher than the actual cash value (ACV) of the vehicle.

This is typically understood by most people.  However, the at-fault insurance company may consider your car to be a total loss even if the repair costs are less than the current cash value.  

When determining whether or not your car is considered a total loss following an accident, insurance companies will calculate the Total Loss Ratio ( cost of repairs / actual cash value = total loss ratio ).  They then compare this number to limits set either internally and/or by individual state laws.

In North Carolina,
the Total Loss Ratio is 75%.

The North Carolina DMV will issue a branded title for a salvage motor vehicle damaged by collision as follows:

(1)        For motor vehicles up to and including six model years old, a branded title shall be issued if the cost of repairs, including parts and labor, exceeds seventy-five percent (75%) of its fair market value at the time of the collision or other occurrence.

(2)        For motor vehicles more than six model years old, a branded title shall be issued if the cost of repairs, including parts and labor and excluding the cost to replace the air bag restraint system, exceeds seventy-five percent (75%) of its fair market value at the time of the collision or other occurrence.

Once DMV has issued a branded title for a motor vehicle all subsequent titles for that motor vehicle will continue to reflect the branding.