What determines whether a vehicle is considered a total loss by an appraiser?

A vehicle is considered a total loss by an appraiser when the estimated repair costs exceed the actual cash value less salvage. This approach aligns with the principles of economic loss; if the cost to restore the vehicle to its pre-loss condition surpasses what the vehicle is worth in its current state, it is deemed impractical to repair. The actual cash value is essentially the market value of the vehicle before the accident, adjusted for depreciation, and considering salvage value provides a complete financial picture.

Therefore, when the estimate exceeds the actual cash value minus the salvage value, it indicates that repair costs are financially unreasonable compared to the vehicle’s worth. This assessment helps insurers determine whether it is more cost-effective to pay out the claim based on the vehicle's value or to proceed with repairs.

In contrast, the age of the vehicle or a declaration of total loss by the owner are not definitive criteria for determining a total loss, as they do not directly assess the financial implications of repair costs versus value. Similarly, the estimated repair cost reaching the market value threshold alone may not encompass all variables required for proper appraisals. Thus, focusing on the estimate in relation to actual cash value less salvage provides a clear and standard methodology for appraisers.