After evaluating the damages to your vehicle, your insurance company has the option of repairing your vehicle, replacing your vehicle, or reimbursing you for the vehicle’s actual cash value (ACV). Actual cash value is the amount your vehicle would have sold for on the date of the accident.

Your insurance will elect to replace your vehicle or reimburse you for the ACV in those instances where the vehicle is economically impractical to repair.

A vehicle is considered economically impractical to repair, or a total loss, if the cost to repair the vehicle equals or exceeds the vehicle’s ACV on the date of the loss. In many instances an insurance company will total a vehicle if the appraised damages equal 80% of the vehicle’s ACV because often, once repairs are begun, additional damages or “hidden damages” are found which would render the vehicle a total loss by definition. (This is sometimes referred to as a “constructive total” loss).