How Does Geico Determine a Total Loss? (2024)

GEICO will declare a vehicle a total loss if 1) it is too damaged to be safely repaired, 2) repairs would cost more than the vehicle is worth, or 3) the damage meets the total loss guidelines of the state where it’s insured.

GEICO determines a vehicle’s worth by calculating its “actual cash value”. Actual cash value is based on your vehicle’s make and model, mileage, features, add-ons, and condition prior to the accident. It also takes into account how much similar vehicles have sold for recently in your area.

Many states set a total loss threshold, which is the level of damage at which an insurer like GEICO must legally declare a car a total loss. The level of damage is expressed as a percentage of the car’s actual cash value. Depending on the state, the threshold can be from 50% to 100%. For example, a car with damage equaling 50% of its value is totaled in Iowa but considered repairable in Texas, where the threshold is 100%.

Twenty-two states have no specific total loss threshold but rely on a total loss formula. In these states, GEICO must total your car if the cost of repairs plus the vehicle’s scrap value equals or exceeds its actual cash value.

All these different rules can seem a little confusing, which is why car owners are sometimes surprised when their car is totaled.

Only your GEICO auto damage adjuster can decide to total a vehicle, after inspecting it. Your adjuster will contact you within three days of the inspection to review the proposed settlement amount. GEICO will issue payment, generally within 10 business days, to you or to your leasing or financing company.

This answer was first published on 05/01/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

How Does Geico  Determine a Total Loss? (2024)

FAQs

How does GEICO determine if a car is a total loss? ›

A vehicle is a total loss (or totaled) if any of the following apply: The vehicle cannot be safely repaired. Repairs would cost more than the vehicle's estimated value. The damage meets your state's total loss guidelines.

How does GEICO calculate car value? ›

GEICO determines a vehicle's worth by calculating its “actual cash value”. Actual cash value is based on your vehicle's make and model, mileage, features, add-ons, and condition prior to the accident. It also takes into account how much similar vehicles have sold for recently in your area.

How does GEICO calculate pain and suffering? ›

For instance, how does GEICO calculate pain and suffering? Though there's no standard formula to compute this, the insurance adjuster might use the multiplier method of calculation. This method multiplies your total economic damages by a number assigned to your pain and suffering.

How total loss is calculated? ›

The TLF in California is Cost of Repairs + Salvage Value ≥ Actual Cash Value. If the sum of the repair costs and the salvage value is more than or equal to the ACV, your car is deemed a total loss.

What factors determine if a car is totaled? ›

What Is a Totaled Car? Insurance companies “total” a car when the cost to repair the damage exceeds the vehicle's book value at the time of the crash.

How long does it take for GEICO to send a check? ›

Geico reports they usually send settlement money within six months of receiving an injury claim.

Does GEICO pay actual cash value? ›

Unlike some coverages, you don't select a limit for collision. The most it will pay is based on the actual cash value of your vehicle. You will be responsible for paying your selected deductible. Let's find the right coverage for you.

What is the actual cash value of a totaled vehicle? ›

Actual cash value (ACV)

ACV is used to determine how much of a payout you will receive for a totaled vehicle. It is determined by the replacement cost of your vehicle minus depreciation, which considers things like age and wear and tear.

How do insurance companies decide how much to pay out? ›

Insurance companies typically use your car's actual cash value to cap payouts when your car is totaled. Your car's actual cash value depends on how much the vehicle has depreciated over time.

How do I negotiate with GEICO claims adjuster? ›

Notwithstanding, you can implement a few techniques when negotiating with a GEICO claims adjuster.
  1. Make the First Offer. ...
  2. Make an Aggressive but Not Outrageous First Offer. ...
  3. Know Your Bottom Number. ...
  4. Try to Mimic or Mirror the Claims Adjuster's Behavior. ...
  5. Give a Settlement Range.

Is GEICO difficult to deal with? ›

This insurer also generally has very professional adjusters, many of which are easy to like. But here is the truth: GEICO is a very difficult insurer to deal with in accident claims, particularly before a lawsuit is filed.

Do insurance rates go up after no fault accident GEICO? ›

Do insurance rates go up after a no-fault accident? , you're more likely to see a rate increase after an accident, no matter who was at fault. However, some states, including Oklahoma and California, don't allow insurers to increase your rates if a crash was not your fault.

What are the two types of total loss? ›

Generally speaking, there are two forms of total losses. To help distinguish the two types let's refer to the first type as an actual total loss and the second type as a constructive total loss. The term “total” loss may be a bit of a misnomer.

How is the settlement amount calculated when total loss? ›

An insurance company determines value based on the vehicle's actual cash value (ACV). ACV is calculated by subtracting depreciation from the cost to replace the car. Factors like mileage, condition, and market demand can influence depreciation.

Is a car totaled if airbags deploy? ›

If it's an old car, then the value of the car will be lower. Therefore, the high car airbag deployed replacement cost causes the car to be totaled. However, if it's a newly bought car, the value will be higher, and the insurance company may decide it's better to cover the cost of replacing the airbags.

How to determine the salvage value of a car? ›

Calculate the Salvage Value

So, for example, if your insurance company offers a 75% return, then multiply the market value by 0.25 to get the approximate salvage worth of the car. The salvage worth is what helps you determine whether or not you go in for the repairs or not.

What is the total loss threshold in New Jersey? ›

In New Jersey, a car is considered totaled when the cost of repairs exceeds 80% of the ACV of the vehicle. That means if the cost of repairs is 80% or more of the ACV, the insurance company will consider the car a total loss and pay the ACV minus the deductible.

Will my insurance go up if someone hits me in GEICO? ›

Yes, when your company has to pay out on a claim, it will impact your rates. If you file a police report and have uninsured motorist property damage coverage, this coverage will pay for the damages and will be considered a not-at-fault accident. Not-at-fault accidents will stay on your record for up to three years.

How much is the GEICO class action settlement? ›

Plaintiffs in the Geico class action lawsuit claimed the negligence to pay sales tax and regulatory fees violates California state law and the company's insurance policies. Although Geico did not admit wrongdoing, the company agreed to pay claimants $19.1 million in efforts to resolve the dispute.

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