Minor accidents often cause cosmetic damages. Maybe an airbag goes off. Either way, you assume that your vehicle will be easily repaired and back on the road in no time. Then, that seemingly small collision ends with a total loss determination by your insurance company. It’s understandable that you would be appalled and question why such a thing has happened. Let’s get to the bottom of why this happens and what decisions you can make from here on out.
Key Takeaways
- Insurance companies typically total a vehicle if repair costs reach 70-80% of its actual cash value (ACV), even if damage appears minor.
- Modern vehicles have crumple zones that absorb impact, which can cause unseen frame or subframe damage, requiring expensive repairs to restore safety.
- Features like ADAS sensors, cameras, and automated safety systems often require recalibration or replacement after even a minor collision, driving up repair expenses.
- If your car is deemed a total loss, you can accept the payout, negotiate for a higher value, or keep the vehicle with a salvage title.
What is a Total Loss?
A vehicle is considered a total loss when the cost of repairs approaches or exceeds its actual cash value (ACV). Insurance companies typically use a threshold—often between 70% and 80% of the car’s value—to determine if repairs are financially feasible. Even if the damage appears minor, hidden structural issues or high repair costs can push the vehicle past this threshold.
Why Minor Collisions Can Result in a Total Loss
Now that you know what determines a total loss, let’s look at some of the reasons it happens after a minor collision:
1. Hidden Structural Damage
A small impact can still cause significant structural damage, especially in modern vehicles designed with crumple zones that absorb the force of a crash. While these zones help protect passengers, they can also lead to underlying damage that isn’t immediately visible. A misaligned frame, bent subframe, or weakened structural components may require extensive repairs to restore the vehicle’s integrity. Without proper repairs, the car may not provide the same level of protection in future accidents, making it unsafe to drive. These necessary but costly repairs can quickly add up, often surpassing the vehicle’s total loss threshold.
2. Technology and Safety Features
Modern vehicles are equipped with advanced driver assistance systems (ADAS), including lane departure warnings, automatic emergency braking, and parking sensors. Many of these technologies rely on sensors and cameras embedded in bumpers, side mirrors, and windshields. Even a seemingly minor collision can misalign or damage these components, requiring recalibration or full replacement to restore functionality.
Additionally, certain safety features, such as adaptive cruise control or collision detection systems, may need software updates after an accident, further increasing costs. Because these technologies are expensive to repair or replace, even a low-speed collision can lead to repair bills high enough for an insurance company to declare the car a total loss.
3. Airbag Deployment
If airbags deploy during an accident, repair costs increase significantly. Modern airbag systems involve more than just replacing the deployed airbags—associated components like sensors, crash modules, and seatbelt pretensioners may also need to be repaired or replaced. In some cases, a deployed airbag may require an entirely new dashboard or steering wheel, dramatically raising labor and part costs. Since airbag replacement is crucial for safety, insurance companies often consider the cost of these repairs when determining whether the vehicle is a total loss.
4. High Labor and Parts Costs
Auto body repairs involve labor-intensive work, from disassembling damaged areas to carefully realigning structural components. The cost of replacement parts—especially if original equipment manufacturer (OEM) parts are required—can be high, and shortages or supply chain issues can further drive up costs. Even if a car only has minor visible damage, the cumulative cost of parts, labor, and painting can quickly push repair expenses close to or beyond the vehicle’s actual cash value (ACV), making it uneconomical to repair.
5. Depreciation and Market Value
A car’s market value plays a crucial role in determining whether it is totaled. Older vehicles or those with high mileage depreciate over time, meaning even relatively inexpensive repairs can exceed their worth. Insurance companies assess the ACV based on factors like the vehicle’s age, condition, mileage, and recent market trends. If repair costs approach or exceed a certain percentage of the car’s ACV—typically around 70% to 80%—the insurer may deem it a total loss rather than invest in costly repairs.
What to Do If Your Car is Determined a Total Loss
There are three avenues you can explore if your car is deemed a total loss:
- Accept the Settlement: The insurer will offer a payout based on the car’s ACV, allowing you to purchase a replacement vehicle.
- Retain the Vehicle: In some cases, you can keep the totaled car, though it may receive a salvage title, which can affect its resale value and insurance eligibility.
- Negotiate the Value: If you believe the insurance payout is too low, you can present evidence such as recent repairs, service records, or comparable market listings to negotiate a higher settlement.
Get Collision Repairs in South Jersey Done at a Certified Auto Body Repair Shop
Yes, even minor collisions can lead to a total loss determination if certain criteria are met. However, that doesn’t mean you need to accept the settlement. At Elmer’s Auto Body, our technicians assess damage thoroughly to determine the best repair solutions. If your car has been in an accident, contact us today for an evaluation at one of our three South Jersey locations. Let us help you get back on the road safely!