Car accidents are messy. But the real frustration often begins after the crash.
If your car’s damaged beyond repair or just not worth fixing, you’ll probably get something called a total loss letter from the insurance company. It’s not just a formality. It’s a document that affects your wallet, your transportation, and maybe even your legal rights.
Here’s a fact that might surprise you: in many states, if the repair costs are just 70–75% of your car’s value, it can be considered a total loss, even if it still runs. That’s where the total loss letter comes in. And if you’re not careful, you could end up settling for less than your vehicle is worth.
This article will break down what that letter means, what to do when you get one, and how Lowe Law Group can help if things don’t add up. Let’s get into it.
What Does Total Loss Report Mean?
A total loss report is the insurance company’s way of telling you, “We’re not fixing your car.” It usually happens when the cost to repair the vehicle is more than what the car is worth.
The number they use to make that call is called the Actual Cash Value (ACV). That’s how much your car was worth right before the accident. If repairs cost more than that or come close depending on state rules, they’ll total it out.
Once that happens, they’ll send you a total loss letter. That’s the official document stating the vehicle is being declared a total loss and what they’re offering to pay you for it.
This letter usually includes:
- Your car’s ACV
- A breakdown of the valuation
- The settlement offer
- Steps for transferring your title
- Info on what to do if you disagree
You don’t have to accept their first offer. More on that later.
Does a Total Loss Affect Credit?
The short answer: not directly.
A total loss doesn’t show up on your credit report. It’s not a loan or a late payment. But there’s a catch.
If you owe money on the car, say you’re still paying off a loan, then what happens next could affect your credit.
Let’s say the insurance payout is less than what you owe on the loan. That gap? That’s your problem. Unless you have gap insurance, you’ll still owe the difference. And if you don’t pay, that could hurt your credit score.
So, while the total loss itself doesn’t go on your credit report, the fallout from how it’s handled might.
Can You Negotiate a Total Loss Amount?
Yes. And you probably should.
Insurance companies often start with a low offer. That ACV number they give you? It’s not set in stone. It’s just their estimate of what your car was worth before the crash.
Here’s how to push back:
- Get your own comps: Look up similar vehicles in your area, same make, model, year, mileage. Use Kelley Blue Book, Edmunds, local listings.
- Ask for the valuation report: They must show you how they came up with the number.
- Point out missing features or upgrades: If your car had new tires, tech, or other options, those add value.
- Submit written evidence: Provide ads, receipts, or other proof to support your counteroffer.
Lowe Law Group helps injured clients challenge lowball total loss offers. We know the laws. We know the tactics. And we know how to fight back.
How Long Does a Total Loss Stay on Your Record?
It depends what you mean by “record.”
If you’re talking about your driving record or credit score, a total loss doesn’t show up there. It’s not a traffic violation, and it’s not a financial misstep (unless you default on a related loan).
But a total loss can affect your insurance history. Once your car is declared totaled, it gets a “salvage” title. That stays with the car forever, and insurance companies might see you as higher risk. That can lead to higher premiums down the line.
Also, if you buy back the car and keep driving it, its salvage status will follow it. That can make it harder to sell or insure later.
What happens if you don’t agree with a Total Loss Adjuster?
If you think the adjuster got it wrong, you have options. You don’t have to sign or accept anything right away.
Here’s what to do:
- Ask questions: Why did they come to that value? What comps did they use? What repair estimates did they get?
- Challenge errors: Maybe they missed upgrades, repairs, or used bad comparisons.
- Get a second opinion: Some independent appraisers can give you a neutral ACV.
- File a formal dispute: You can submit a written appeal with supporting evidence.
- Hire a lawyer: If you’re hitting a wall, a lawyer can escalate the claim or even take legal action if necessary.
Insurance companies are betting you’ll just accept the offer and move on. But if your car was worth more or if the payout leaves you owing thousands, it’s worth fighting.
Personal injury attorneys like Lowe Law Group don’t just handle injuries. We also help our injured clients handle the insurance mess that follows. That includes total loss disputes, coverage gaps, and bad-faith tactics.
Final Thoughts
A total loss letter can feel like the final word. It’s not. It’s just the insurance company’s first move.
You can negotiate. You can push back. And you can get help doing it.
At Lowe Law Group, we help people who’ve been in serious accidents. Not just with their injuries, but with the insurance battles that come afterward. We know how to read a total loss letter. We know how to challenge a bad offer. And we know how to hold insurers accountable.
If you’ve been hurt in an accident and have questions about your total loss letter, contact Lowe Law Group today. We’ll review your case for free and help you figure out your next move.
