A “total loss” is when the expected repair costs are more than the “value” of your vehicle. Think of the value as the fair market value. This means that instead of paying for repairs, you will only be paid for your vehicle’s fair market value.
A vehicle’s value is increased by things like low mileage, added options like power steering or an upgraded sound system, new tires or parts, and its good condition.
Sadly, “value” has nothing to do with how much you depend on the vehicle, or how much you may still owe on it, or the fact that what you’re offered isn’t really enough to get another vehicle that’s as good as the one you’ve just lost-the “value” is not “replacement value.” Especially for those who don’t have much to fall back on, a total loss can be devastating.