A total loss in a collision is when your vehicle is damaged so badly that repairing it costs more than it’s worth — or close to it. In that case, your insurance company (like MPI) will write off the vehicle and pay you its actual cash value, instead of repairing it.
💥 How It Works (In Simple Terms):
- You get in a collision
- The body shop or MPI does a damage estimate
- If the repair cost + salvage value is more than the vehicle’s value, it’s declared a total loss
📊 Formula MPI Might Use:
Repair Cost + Salvage Value ≥ Actual Cash Value (ACV)
Then → Total Loss
For example:
- Your car is worth $10,000
- Repair cost is $8,500
- Salvage value (what’s left of it) is $2,000
- $8,500 + $2,000 = $10,500 → more than ACV → total loss
🧾 What Happens Next:
- MPI gives you a settlement offer based on market value (ACV)
- You can choose to:
- Accept the payout and give up the car (they take it for salvage)
- Buy back the vehicle as a “write-off” and repair it yourself (if eligible)
🚫 Common Reasons a Car Becomes a Total Loss:
- Severe frame or structural damage
- Airbags deployed in older vehicles
- High repair costs for mechanical + body work
- Expensive parts (like for luxury or electric cars)
💡 Pro Tip:
If you disagree with MPI’s value of your car, you can negotiate or provide evidence (like recent maintenance, upgrades, or sale listings of similar vehicles).
