When Is a Car Considered A Total Loss in Georgia?

A serious accident can leave you wondering whether your vehicle is worth repairing or if it’s a total loss. In Georgia, there is a specific threshold used to determine whether a car or truck is considered totaled. According to Georgia law, if the cost to repair your vehicle exceeds 75% of its actual cash value (ACV) immediately before the damage occurred, it’s declared a total loss. This 75% threshold is known as the Total Loss Threshold (TLT) and is used by insurance companies when assessing vehicle damage claims in the state.  But what does that mean for you? How does the insurance process work? And what if you still owe money on your car? At Dan Chapman & Associates, we deal with these questions daily, and we are happy to speak with you in a free consultation about property damage or injury questions.

In addition, this article will walk you through the most commonly asked questions we get on property damage to a motor vehicle and how insurance companies determine the cause of the damage and if a vehicle is a total loss. 

What Makes Insurance Consider a Car Totaled?

Insurance companies don’t just look at how damaged a car is; they look at the economics of repairing it. In Georgia, a car is deemed totaled if repair costs exceed 75% of its actual cash value (ACV) before the accident. This is known as the Total Loss Threshold (TLT).

For example:

• If your car’s ACV is $10,000 before it is in a crash and the estimated repairs total $7,500 or more, it will be declared a total loss.
• If repairs cost $6,000 and the car is worth $10,000, the insurer will likely approve the repairs instead.  However, the added cost of towing and rental car payments while the car is repaired can also cause a car to be considered a total loss from a claim valuation standpoint.

This rule is meant to prevent insurers from spending more on repairs than the car is actually worth.

How Insurance Companies Handle Totaled Vehicles

Once your car is declared a total loss, your insurance company will take the following steps:

1. Determine Your Car’s Pre-Accident Value – Insurers use a lot of data sources to estimate your car’s fair market value before a crash.  Some of these sources are not available to the public.  Other sources, like Kelley Blue Book and NADA Guides, are available to the public.  If you were at-fault for a crash, and filed a claim under your collision coverage, your deductible is also deducted from your payout.
2. Make You a Settlement Offer – The insurer will offer you a check for the ACV of your car, minus the deductible.  Don’t trust the insurer to be fair in this offer.  Do your homework and check public sources to see if it is accurate.  They are not on your side and are making a business decision on what to offer.  You can and should negotiate with them, but you need data to do that negotiation.  They will not just take your opinion on value, but will need to see real data on which you can base your opinion.
3. Take Possession of the Vehicle – If you accept the payout, the insurance company takes ownership of the car and they will then sell it for parts and salvage.
4. Offer a Salvage Option (In Some Cases) – If you want to keep your totaled car, the insurer will deduct its salvage value from your settlement.  You have to be careful with this option.  You may want to keep a vehicle because it has sentimental value, but if you repair it, a new title will be issued showing it is a salvaged vehicle.  This means it was repaired after it had substantial damage and was determined to be a total loss and any future buyer will know of this decrease in value.  

Is My Car Totaled if the Frame Is Bent?

A bent frame is one of the most significant damages a vehicle can sustain. While some minor frame damage can be repaired, extensive frame damage often leads to a total loss classification because:

• Frame repairs can be costly and may not fully restore the vehicle’s original safety standards.
• The car’s resale value significantly drops after frame damage, making repairs impractical.
• A vehicle with a weakened frame poses safety risks in future accidents.

If an auto body shop determines that your frame is bent beyond safe repair, your car is likely to be totaled by your insurance company.

How to Get the Most Out of a Total Loss Claim

If your car is deemed a total loss, you want to ensure you receive the highest possible settlement offer. Here’s how to maximize the value of your claim:

1. Gather Documentation

• Obtain repair estimates from reputable body shops.
• Keep maintenance records and receipts for upgrades to the vehicle (new tires, expensive aftermarket stereo system, new transmission, etc.).
• Take clear photos of your car before and after the accident.

2. Research Your Car’s Value

Don’t rely solely on the insurer’s valuation. Use tools like:

• Kelley Blue Book (KBB)
• Edmunds
• NADA Guides
• Local dealership listings for similar vehicles

If you find higher values than what your insurer offers, present this data to negotiate a better settlement.

3. Negotiate If Necessary

Insurance companies often start with a lower settlement offer than they will pay, because they are for profit companies, and they want to see if you will accept what they offer and save them money. If you believe your car is worth more, provide evidence and counter their offer. Be firm but reasonable.

4. Consider the Salvage Option

If you want to keep your totaled car, you can negotiate to buy it back at its salvage value. This might be a good option if repairs are possible and you don’t mind driving a vehicle with a salvage title.

5. Contact a Law Firm
If you encounter any of the following issues, consulting with an experienced attorney can help protect your rights and maximize your claim:

• The insurance company offers an unreasonably low settlement or refuses to negotiate.
• You feel pressured into accepting an unfair payout.
• There are disputes about fault or liability that could impact your claim.
• You’re unsure how to handle complex legal or insurance processes.

A law firm like Dan Chapman & Associates who has experience in personal injury can provide guidance, negotiate on your behalf, or even take legal action if necessary.

How Is Your Case Affected if You Still Owe on Your Car?

If you have an outstanding loan on your vehicle when it’s totaled, things can get tricky. If you put little or no money down when you bought a car, or you had bad credit and over paid for a car, the loan balance you owe might be more than the car is worth.  This gap is why people buy GAP insurance.  Without it, you can be stuck with a loan balance on a car that is totaled.  Here’s how the process works:

1. Insurance Pays the Lender First – The insurance company will issue the settlement check directly to your lender to pay off the remaining balance on your auto loan.
2. You Cover Any Deficiency – If the payout doesn’t fully cover your loan balance, and there is what is called a gap, you are responsible for paying the remaining amount of the loan balance out-of-pocket unless you have GAP coverage.
3. Gap Insurance Can Help – If you have GAP insurance, it covers the difference between your loan balance and the insurance settlement, preventing you from owing money on a totaled car.

Example Scenario:

• You owe $12,000 on your car loan and your car is a total loss because of a crash with another driver, who is at fault.
• The other driver’s insurance company values the pre-crash value of your car at $10,000, and then that insurance company pays that $10,000 amount to your lender.
• You now owe a $2,000 gap between what it was worth and what you still owe on your loan, and your loan company will require you to pay this $2,000 out of your pocket unless you bought gap insurance.  If you bought the GAP insurance, the GAP insurance policy will pay the $2,000 balance owed to your lender to pay off the car loan.

If you’re financing a vehicle, check your policy to see if gap insurance is included in your payment.  Not all lenders require it but many do.  If you are not putting much money down when you buy a car, GAP coverage should be considered if it is not required by your lender.  

What Happens to a Totaled Car After the Settlement?

Once your insurer declares your car a total loss and you accept the payout, you will be required to sign over the title to the insurance company before or when they give you a check.  The vehicle typically goes through the following process:

• Salvage Auction – The insurer sells the car at a salvage auction, where it may be bought for parts or rebuilt.
• Rebuilt Title Process – If someone repairs and re-registers the vehicle, it will receive a rebuilt title rather than a clean title.
• Export or Scrap – Some totaled cars are shipped overseas, while others are dismantled for scrap metal.

If you choose to keep your totaled car, you’ll need to get a rebuilt title, also called a salvage title, before you can legally drive it again. You may need an inspection report before you can get a salvage title, showing the DMV the vehicle has been inspected and is safe to be driven on the roads of Georgia.

Contact Dan Chapman & Associates

The experienced legal team at Dan Chapman & Associates can help you navigate the property damage process by answering your questions.  In some cases, we can even represent you and  negotiate with insurance companies, and ensure you receive fair compensation.  If you’ve suffered property damage in a car accident that was not your fault, contact Dan Chapman & Associates today for a free consultation.