Why is my car being totaled by the insurance company?

Many people involved in auto accidents are upset when the insurance company tells them that their vehicle is being "totaled," which means the vehicle will not be repaired and the owner will be paid for its value. Some people do not understand that the insurance companies are restricted by Kentucky law regarding the decision to total a vehicle.


KRS 186A.520(1) requires insurance companies to total a vehicle if the cost of repair exceeds 75% of the value of the vehicle as determined by the National Auto Dealers Association (NADA). Some states use 80% or 100% as the percentage that determines when a vehicle is totaled, but Kentucky has chosen 75%. 


If your insurance company determines that your vehicle needs to be totaled, you may have an option to keep the vehicle if you choose to do so. If you do not have a lien against the vehicle, the insurance company may be willing to sell the salvage vehicle to you and then you can have it fixed and take it to the local sheriff to be determined road worthy and obtain a new title for the vehicle. This process is inconvenient, but it is an option if you are determined to keep your vehicle.


Although it is often disappointing to lose a dependable and favorite vehicle, it is important to understand that the insurance companies do not have any choice regarding the decision to total the vehicle if the costs of repairs exceed 75% of the value of the vehicle.

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