The insurer says my car is a total loss: how is the value decided in California?

A total loss offer often arrives as a single number with little explanation. California's fair claims regulations set out how that number must be built, and an offer that skips the steps can be challenged. This page explains the rules for automobile total loss claims, whether the claim is under your own policy or against the other driver's insurer. For the broader steps after a crash, see our auto accident page.

How does a total loss claim work, step by step?

1. The claim and the inspection. Under your own policy, if the insurer wants to inspect the car it must ask within six business days after receiving notice of the claim, or ask for photographs or an estimate instead within three business days (10 CCR 2695.8(e)(4)(B)).
2. The valuation. The insurer sets the cost of a comparable vehicle by one of four approved methods and must fully itemize and explain it in writing when it makes the offer (section 2695.8(b)(4)).
3. The offer. A cash settlement is the comparable vehicle's cost, minus any deductible under your policy, plus taxes, one-time transfer fees and the unused part of your registration fees (section 2695.8(b)(1)). On your own policy, the insurer may instead offer a specific replacement car (section 2695.8(b)(5)).
4. Keep or surrender the car. If you keep it, the salvage value comes off the settlement and the insurer must give you written disclosures about the DMV (section 2695.8(b)(1)(A)).
5. Test the offer. Check every comparable and every adjustment against the rules below.
6. Reopen within 35 days if needed. On your own policy, if you cannot buy a comparable car for the gross settlement, notify the insurer within 35 calendar days (section 2695.8(c)).
7. Escalate. You can contact the California Department of Insurance at 1-800-927-4357 or file a complaint online; a lawsuit for vehicle damage generally must be filed within three years (Code of Civil Procedure section 338(c)(1)).

What is a "comparable automobile"?

Under section 2695.8(b)(2) of title 10 of the California Code of Regulations, a comparable automobile is one of like kind and quality: the same manufacturer, the same or newer model year, the same model type, a similar body type, and similar options and mileage. A newer model year may be used only if there are not enough comparables of the same year. The insurer may use either the asking price or the actual sale price. The comparable must have been available for retail purchase by the public in the local market area within 90 days of the final settlement offer, and each one must be identified by its VIN, a dealer's stock or order number, or its license plate, along with the seller's phone number or street address.

How must the insurer calculate the value?

Section 2695.8(b)(4) allows four methods, and whichever is used must be fully itemized and explained in writing for the claimant when the settlement offer is made:

Adjustments between your car and the comparables are allowed only if they are discernible, measurable, itemized, specified, appropriate in dollar amount and documented in the claim file. Deductions that cannot be supported may not be used. The regulation also says the value may not be reduced for the condition of your car unless its documented condition was below average for that year, make and model, although deductions for prior or unrelated damage are still allowed.

What else must the settlement include?

• Taxes and transfer fees: the cash settlement must include all applicable taxes and the one-time fees for transferring ownership of a comparable vehicle, plus the license fee and other annual fees for the remaining term of your current registration, whether or not you buy a replacement (section 2695.8(b)(1)).
• If you keep the car: the insurer may deduct the salvage value, set by what a salvage pool, licensed salvage dealer, wholesale auction or dismantler will pay, and on request must give you that buyer's name, address and phone number. It must tell you in writing that keeping a salvage vehicle has to be reported to the DMV and may affect its future value, and that you can ask the DMV to refund unused license fees (section 2695.8(b)(1)(A)).
• Towing and storage: after a covered collision loss, the insurer must pay reasonable towing and storage charges when they were reasonably necessary, and give reasonable notice before it stops paying storage (section 2695.8(k)).

What if I cannot buy a similar car for the amount offered?

If the claim is under your own policy, section 2695.8(c) requires the insurer to tell you, when it pays or makes its final offer, that it will reopen the claim if you notify it within 35 calendar days that you cannot buy a comparable vehicle for the gross settlement amount. Once reopened, the insurer must find a comparable vehicle for that amount, pay the difference for the one you found or buy it for you, or invoke the appraisal provision of the policy. This does not apply if the insurer's final offer already identified a specific comparable vehicle available at that price, with its seller and VIN, stock number or plate.

What changes the answer?

Whose insurance company is paying

The 35-day reopening right, the inspection timelines in section 2695.8(e)(4)(B) and the replacement vehicle option apply to first-party claims under your own policy. The valuation standards in section 2695.8(b) also apply to claims against the other driver's insurer, but the regulation says they do not change an insurer's existing legal obligations to a third party (section 2695.8(b)(6)). Where the other driver's liability and your damages are reasonably clear, that insurer may not tell you to make the claim under your own policy instead (section 2695.8(d)). How much property damage coverage the other driver must carry is explained on our page about California's minimum auto insurance.

Whether you were partly at fault

On a claim against the other driver's liability coverage, the insurer's payment for towing and storage may be prorated based on the comparative fault of the parties (section 2695.8(k)). More broadly, California's comparative fault rule reduces damages by the claimant's own share of responsibility (Judicial Council civil jury instruction CACI 405), so the police report and photographs matter.

The car's condition and history

A condition deduction needs documentation that the car was below average for its year, make and model. Prior or unrelated damage can be deducted, but any adjustment must be itemized and measurable. Service records and photographs taken before the crash are the strongest answer to an unsupported deduction.

Whether the other driver was uninsured

The uninsured motorist coverage required by Insurance Code section 11580.2 does not apply to property damage, so a car damaged by an uninsured or unknown driver is usually handled under other coverage in your own policy, if you have it. Our page on hit and run and uninsured driver claims covers the injury side.

Whether the car can be repaired instead

If the insurer settles a partial loss on its own written estimate, it must give you a copy, and the estimate must allow for repairs to accepted trade standards. If your shop's estimate is higher, the insurer must pay the difference, name a shop that will do the work for its estimate, or reasonably adjust your shop's estimate item by item in writing (section 2695.8(f)).

A worked example

For example, imagine a hypothetical owner of a well-kept eight-year-old sedan in Glendale whose car is declared a total loss after another driver runs a stop sign. She claims under her own collision coverage to move faster. The valuation takes a "condition adjustment" off without explanation and leaves out sales tax and the remaining months of her registration.

She checks each item against the regulation. Taxes, transfer fees and unused registration fees belong in the settlement. A condition deduction needs documentation that her car was below average, and her service records and photographs suggest it was not. She writes to the adjuster asking for the documentation behind each adjustment and for a corrected figure, and she notes the date she received the offer so she can use the 35-day reopening right if she cannot find a similar car for the amount paid. None of this predicts the final number; it makes the insurer show its work.

Common mistakes with total loss offers

• Accepting a single number. The regulation requires an itemized, written explanation when the offer is made; ask for it.
• Not checking the comparables. Look at year, trim, options, mileage and location, and whether each listing can be traced by VIN, stock number or plate.
• Missing the taxes and fees. Sales tax, transfer fees and unused registration fees are part of the settlement.
• Letting the 35 days pass. On your own policy, the reopening right depends on notifying the insurer within 35 calendar days.
• Keeping the car without reading the disclosures. A retained salvage vehicle must be reported to the DMV and may be worth less later.

What to do this week

1. Ask in writing for the full valuation report and the list of comparables if you do not have them.
2. Write down the date you received the offer and count 35 calendar days.
3. Gather service records, receipts for recent work, and photographs showing the car's condition before the crash.
4. Find listings for similar cars in your area and save them with their VINs or stock numbers.
5. Ask where the car is stored and who is paying, and plan to remove personal items.
6. Keep every document in one place; our list of what to bring to a personal injury consultation shows what a lawyer will ask for.
7. If you were hurt, follow our checklist for what to do after a car crash in Glendale, since the reports and deadlines there apply too.

Frequently asked questions

Can the insurer make me use its repair shop?

No. Insurance Code section 758.5 and section 2695.8(e) bar an insurer from requiring repairs at a specific shop, and once you have chosen a shop, the insurer may not require an inspection at a shop in its own direct repair program or another shop it picks (section 2695.8(e)(5)). Nor may it make you travel more than 15 miles in a city or urban area of 100,000 or more people, or 25 miles elsewhere, to inspect a replacement car or have yours inspected (section 2695.8(e)(4)(A)).

Do I still owe my deductible on a total loss?

On a claim under your own policy, the cash settlement is the cost of a comparable car less any deductible in the policy (section 2695.8(b)(1)). A claim against the other driver's liability insurer is not made under your policy, so your deductible is not part of that calculation.

Can I keep my totaled car?

Often, yes. The insurer may deduct the salvage value and must disclose in writing that the retention must be reported to the DMV and may affect the car's future resale and insured value. You can ask who would buy the salvage at the price used.

How long do I have to sue over car damage?

Generally three years under Code of Civil Procedure section 338(c)(1), and injury claims have a shorter two-year limit (section 335.1). A lawsuit over car damage is an ordinary civil case, which our civil litigation page explains. If the dispute is only about the car's value, our page on small claims or a lawyer in Los Angeles County compares the court options.

Should I talk to a lawyer if I was also hurt?

Read any release before you sign it to see which claims it covers, since a property settlement should not end an injury claim you did not mean to give up. See our article on how a personal injury lawyer can maximize your compensation for the injury side of the claim.

How can Glendale Law help?

We review total loss valuations for clients in Glendale and across Los Angeles County, check them against the regulation, and press the insurer when the numbers do not add up. When the crash also caused injuries, our personal injury page explains how we handle that part of the claim. Call (818) 244-9000 or request a consultation.