Total loss & valuation
What fees are included in a total loss payout?
The short answer: the payout isn't just the car's value. It's a stack: the car's actual cash value, plus applicable sales tax and title/registration fees (in many states, these are required), minus your deductible if you claimed through your own policy, and minus the salvage value if you keep the car. The exact stack depends on your state and policy — so ask the adjuster to show you every line.
The stack, line by line
- Actual cash value (ACV) — the starting line: what your car was worth the moment before the crash. What is actual cash value? →
- + Sales tax — calculated on the ACV in most settlements. Many states require the insurer to include it, on the logic that a replacement car will be taxed too. Some states instead reimburse the tax after you buy a replacement — sometimes with a deadline to buy. The method is state-specific; ask which one applies to you.
- + Title and registration fees — many states also require the cost of titling and registering a replacement to be included, in full or in part.
- − Your deductible — subtracted only when the claim runs through your own collision coverage. If the other driver's insurer pays, there's no deductible on that side.
- − Salvage value (only if you keep the car) — if you take the payout and keep the totaled car, the car's salvage value comes off the settlement, and the car gets a salvage/branded title.
A worked example
These numbers are an example, chosen to show the arithmetic — your value, tax rate, fees, and deductible will differ:
- Actual cash value: $15,000
- Sales tax at an example rate of 6%: +$900
- Title and registration fees (example): +$120
- Deductible (your own policy): −$500
- Settlement: $15,520
If this same owner kept the totaled car and its salvage value was $1,800, the settlement would drop to $13,720 — the $1,800 comes off because the owner keeps that much value in the car itself.
What is usually not in the stack
- Loan balance above the car's value. The settlement prices the car, not the loan. If you owe more, that difference is on you unless you have gap coverage. Payout vs loan balance — what happens? →
- Personal belongings. Items that were in the car usually aren't part of the auto settlement; they typically fall under homeowners or renters insurance.
- Undeclared extras. Expensive aftermarket equipment may not be covered unless it was declared on the policy.
- Open-ended rental costs. Rental reimbursement has its own limits and usually ends shortly after the settlement offer — it's a separate line with separate rules.
Which taxes and fees must be included in a total-loss settlement varies by state, and deductible rules vary by policy. Check your own policy documents and your state's insurance department, or talk to a licensed professional, before acting on a claim.
The payout stack
| Line | Example amount |
|---|---|
| Actual cash value | $15,000 |
| + Sales tax (example 6%) | +$900 |
| + Title / registration fees | +$120 |
| − Deductible (own policy) | −$500 |
| Settlement | $15,520 |
| If you keep the car: − salvage value | −$1,800 → $13,720 |