TL;DR: A car is considered totaled in Illinois when the cost to repair it (plus its salvage value) meets or exceeds the vehicle’s pre-accident market value.
This is known as the Total Loss Formula. If your car is declared a total loss, your insurer typically pays the actual cash value (ACV) of the car, minus your deductible. Illinois law usually requires you to surrender the car unless it’s older than 9 years or only has hail damage.
To understand your payout options or get help with total loss coverage, call Insure on the Spot at 773-202-5060.
What Does It Mean When a Car Is “Totaled”?
A car is “totaled” (declared a total loss) when the insurance company decides it’s not economically feasible or safe to repair it. If fixing the damage costs more than the car is worth—or even close to that amount—the insurer will deem it a total loss.
This typically happens after:
- Major crashes
- Floods or fires
- Severe hail or storm damage
- Frame or structural damage
Instead of paying for repairs, the insurance company pays you the car’s actual cash value (ACV)—its pre-accident market value, minus your deductible if applicable.
How Is a Total Loss Calculated in Illinois?
Illinois uses the Total Loss Formula (TLF), not a fixed percentage threshold. Here’s how it works:
Repair Cost + Salvage Value ≥ Actual Cash Value (ACV)
If this equation holds true, the car is a total loss.
- ACV: The market value of your car before the accident
- Repair Cost: Estimate to return the car to pre-accident condition
- Salvage Value: What the damaged car is worth as-is
If the combined cost to repair and the salvage value equals or exceeds the ACV, the vehicle is considered totaled.
Illinois Rules on Totaled Cars
Here’s what Illinois law says about total loss vehicles:
- Salvage Title Required: If your insurer pays out for a total loss, the vehicle title must be changed to a “salvage” title.
- No Owner Retention (Usually): In most cases, you cannot keep your totaled car. The insurance company takes ownership.
- Two Exceptions:
- Cosmetic hail damage only
- The car is 9 years or older
- Cosmetic hail damage only
In these cases, you may keep the car and receive a payout minus its salvage value.
What to Do After Your Car Is Totaled
Follow these steps:
- Report the accident: File a police report and notify your insurance company.
- Start your claim: Provide details to your adjuster and have the damage assessed.
- Understand the valuation: Insurers determine your payout based on ACV. Use tools like Kelley Blue Book to verify that the amount is fair.
- Negotiate if needed: If you believe your vehicle was worth more, provide evidence like recent repairs, photos, or comparable listings.
- Accept or reject the offer: Once finalized, the insurer pays you the ACV minus the deductible, and you sign over the vehicle unless you’re keeping it under one of the exceptions.
- Replace your vehicle: Use the payout to buy your next car. Be sure to update your insurance policy with the new vehicle.
Will Insurance Cover My Loan If the Car Is Totaled?
Not always. If you owe more than your car’s ACV, you’re still responsible for the balance.
GAP Insurance can help. It covers the difference between what your car is worth and what you still owe on your loan or lease. It’s especially useful for newer vehicles or long loan terms.
Insure on the Spot offers guidance on adding GAP coverage if you’re financing a vehicle.
Can I Keep My Totaled Car?
In Illinois, you usually can’t keep a totaled car unless:
- The damage is only hail-related and cosmetic
- The car is 9 years or older
If allowed to keep it:
- You’ll receive a lower payout (minus the salvage value)
- You’ll need a salvage title
- The vehicle must be repaired and inspected before being retitled as “rebuilt”
In most cases, it’s easier and safer to let the insurer take the vehicle.
Frequently Asked Questions
Q: How much damage before a car is totaled?
A: It depends on the car’s value. If repair costs plus salvage value equal or exceed the pre-accident market value, it’s considered totaled under Illinois law.
Q: Can I keep a totaled car?
A: In Illinois, only if it’s hail-damaged (cosmetic only) or 9+ years old. Otherwise, the insurance company takes possession and applies for a salvage title.
Q: How does insurance value a totaled car?
A: Insurers use actual cash value (ACV), based on the car’s age, condition, mileage, and market data. You can negotiate if the offer seems low.
Q: Will insurance pay for a rental car if mine is totaled?
A: Only if your policy includes rental reimbursement, or if the at-fault driver’s insurer agrees to cover it. Coverage usually ends shortly after the payout is issued.
Q: Will a totaled car raise my insurance rates?
A: If you were at fault, yes—your rates may go up. If you weren’t at fault, your rates usually won’t increase, but it’s not guaranteed.
Need Help After a Total Loss? We’re Here for You
If your car was just totaled—or you want to make sure you’re covered if it ever is—Insure on the Spot can help. We offer policies with full coverage, GAP insurance, and expert claims guidance. Call 773-202-5060 or get a free quote online in minutes.