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Total Loss Value Formula in Illinois

Posted on January 2, 2023

If you have been involved in a vehicle accident and your vehicle has sustained significant property damage, the insurance carrier may decide to write it off as a total loss. However, understanding what a total loss actually means is important so that you can prevent being taken advantage of by the insurance carrier. Here, we want to discuss what is considered a total loss in Illinois and how a total loss is valued.

What is a “Total Loss”?

A vehicle will be considered a total loss after an Illinois vehicle accident if the repair costs for the vehicle plus the scrap value exceed the fair market value of the vehicle before the incident occurred.

For example, let us suppose that a vehicle had a fair market value of $15,000 before an accident occurred, but an individual was involved in a collision. If the salvage value of the vehicle is $6,000, and repairs would cost $10,000, then the vehicle would be considered “totaled” since the salvage value added to the cost of repairs exceeds the fair market value ($16,000 for scrap and repair versus $15,000 fair market value).

If the insurance carrier declares the vehicle a total loss, then they are responsible for paying the individual the full market value required, minus any deductibles for the vehicle.

It is worth pointing out that the theoretical vehicle used in this example most certainly cost more than $15,000 when it was originally purchased by the driver. The actual cash value of the vehicle, the fair market value before the incident occurs, is meant to reflect the vehicle’s worth in the depreciated state (mileage, usage, etc.). Every vehicle depreciates in value immediately after purchase and continues to depreciate throughout its lifetime.

Can You Negotiate a Total Value Loss With the Insurance Carrier?

Insurance carriers certainly have the incentive to pay as little as possible, and they may even try to fight paying the fair market value for your vehicle. If you believe that the insurance carrier’s offer is not the true fair market value of the vehicle, you do have the right to object and then negotiate for a higher payment.

In order to determine the fair market value of your vehicle, you should look at multiple appraisal sites, including Kelley Blue Book. Additionally, you could get multiple appraisals from mechanics about the value of your vehicle and the price it would be to repair the vehicle.

Additional types of evidence, such as photographs of your vehicle in its original condition, as well as all maintenance records and any documentation of good upkeep, would be helpful. Additionally, if your vehicle has any special features or add-ons that would increase the value, you should speak to the dealership or installer to obtain written specifications regarding these additions.

We strongly encourage you to reach out to a skilled car accident lawyer who has experience handling these claims. An attorney can help you with not only your property damage claim but also any injury claim you have as a result of the same incident. When an attorney gets involved, they will handle all communication with insurance carriers. A lawyer will be responsible for helping obtain inadequate and accurate vehicle valuation.