By Frost McGahey, Investigative journalist
Stock Photo from CarGurus
Recently Ann, a reader of the Grant County Beat, described how after a minor fender bender, Liberty Mutual declared her 2005 Lexus SUV a total loss. It shocked her since the car was drivable and had only sustained damage to the passenger side doors and the rear bumper.
The Liberty adjustor said the car was worth $5000, and it would cost $4500 to repair which made it for the company a total loss. This shocked Ann.
Paperwork was sent to her to justify their decision, and she noticed the mileage used was 216,000 instead of the actual 76,353. The valuation had been done by an outside appraiser. When the error was pointed out, it increased the valuation, but not enough. Part of the problem was the Comparables the insurance adjuster had used. The woman checked dealer sites and found examples of the same car selling for $8,000. She contested the valuation plus sent in numerous photos showing the very good condition the SUV was in. Liberty re-valued it at $8,000.
Liberty gave her the option of taking $8,000 or keeping the car and receiving a lower amount. The salvage value of the Lexus was $1500 so if she kept the car she'd receive $6500. The vehicle would have a salvage title.
At first Ann was afraid of having a vehicle with a salvage title, but after talking to a lawyer friend who had an auto with a salvage title, she realized it wouldn't be a problem.
The bulk of the damage was fixed by a local repair shop for $1,000. Some minor repairs were done by Ann's husband. And now she drives the Lexus daily, but it does have a few scars.
Legitimate Reasons a Car may be Totaled when It doesn't look it.
One thing to remember is that Totaled and Destroyed are not the same thing. Many people assume that if a car is declared a total loss, it must be beyond repair. In reality, it's often an economic decision based on the vehicle's actual cash value, projected repair costs, and salvage value—not simply how the damage looks.
Today's cars are stuffed with electronics: alerts, rear backup cameras, and lane warning systems. All are expensive to replace. The cost of auto parts spiked during the Pandemic along with the time needed to get repaired. This increased the time and cost of loaner cars. The upshot is that the number of cars totaled went from 19% in 2018 to 27% in 2023.
The result is that insurers often decide that they'd rather fund a replacement than go through repairing a damaged vehicle.
And when cars, pickups, and SUVs are considered a total loss, it leads to higher replacement costs and higher insurance premiums.
The average annual cost of full auto coverage increased 15% nationwide in 2024.
Unfortunately, the amount recovered from insurance usually doesn't cover the cost of replacing with a new vehicle.
Average cost of a car in 2019 - $39,000 – 2025 – $49,000
Pickup- Base price is $40,000, but usually trucks are loaded with options that get the price to around to $66,000.
Mid-size SUV is $47,000.*
The bottom line is that if you're in an accident; don't be surprised if your vehicle doesn't make it.
