Are Insurance Companies Totalling Cars More Often Lately?

Friend’s car had an accident recently. It is 3 month old loaded Mazda and the damage is not that bad according to him! His mechanic thinks that they will total the car. My friend is not sure why. I am surprised as I had a Honda base with $9550 of damage get repaired a few years ago. This is the second car my friend had this with, previously he had a 2 year old mid trim that got totaled as well last fall

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Trust the mechanic not your friend. A car can look fine from the outside but have structural damage. Inversely, insurance knows car values are inflated, so the insurance should want to take the cheapest path.

Due to a parts shortage, having a rental car is probably part of the equation. Waiting months and months for parts to come in may be cost prohibitive for an insurance company.


Insurance companies can also sell the damaged car at auction and that value plays into the calculation they use to identify if the vehicle needs to be totaled or not.

Basically, if (total loss payout - value from auction) is less than (rental coverage + cost of repair), they will total out the car.


Typically I see (as an insurance broker) if a car has 75% or more of the value in damage before they tear it down it will get totaled. Car parts on the secondary market are expensive. You would be surprised how fast damages add up. If it is cheaper to total than fix it will happen every time.

And yes totaled cars are sold for parts. it can be a decent recovery for the insurance company. Especially if the major components can be recovered.


Each state sets it’s own damage threshold for total loss - it’s in the best interest of the shop to get $9k. Or maybe damage is way beyond repair.

The auction is hot for new MY cars and it’s probably more profitable than repairing the car.

I have seen car with $16k damage totaled. But $23k cars being repaired. Both cars were Q50

It’s so funny how it works

I just had a 5 month old Palisade limited get hit $10K damage and had rental for over a month. They didn’t total it. Wish they had.


He says he has a $1500 limit on rental reimbursement (was his fault, no other car involved)
Just wondering if it is happening more often or is random, both cars were leased. He is actually a little worried because he did not take the gap insurance and there is none on Mazda leases (TFS) unless you pay

They don’t total it out unless they are forced to or it’s too expensive to fix.

Pretty simple. Your friend isn’t a mechanic or bodyshop guy so he can’t know or was informed on the Estimate and didn’t understand some of the codes.

How about he shows you a copy of the estimate so you can see why the mechanic thinks it will be totaled?

I just had a claim payout of over $2,000 for a scraped bumper after being rear-ended at what I estimate was 5 MPH (definitely no more than 10 MPH). There were no dings or dents, just missing paint of approximately three inches high and eighteen-twenty inches wide. They removed the bumper and found no structural damage (which they and I expected).

When I picked up my car, the person who wrote the estimate told me more insurance companies’ total vehicles presently due to app estimates. According to them, it has become rare for insurance to do physical assessments. I was surprised by the method with my car, as pictures and videos do not tell an accurate story.

By the way, I took my car to the repair shop approximately two weeks before my insurance company had me send the damage via the app. My insurance company’s estimate came in $300 more than the in-person estimate. But in the end, the repair shop added $400 to their original estimate. If I shared a picture of the damage, no one outside of repairs or insurance would believe it was a 2K+ fix.

Besides hidden damage sometimes parts being on severe back order can trigger insurance to issue a supplemental and just total the car out so they’re not on the hook for 2-6+months of rental car coverage.

That is incredible. A bumper once upon a time was $350 to repaint (ok almost 20 years ago I paid that out of pocket). In 2017 I returned a Honda. It had some denting on two door side panels, a small dent 6 inches, scraped paint and ding on the side of the front bumper and a dent on top of the trunk the size of a hand from something landing on it but no scraped paint. I got 3 estimates to pay out of pocket, one which I thought the most reasonable said $500 to repair each area so $1500, a lowball of $900 and $1800 on the high end. I was going to keep the car and live with the damage when I decided to get the lease return estimate, the total was $1180 which they agreed to waive if I released with them (which I would have done anyway if I was returning). I ended up paying nothing and they waived 800 something miles over too! There really was a bit of damage on the car. When I returned again in 2020, prior to the car shortage, I had a dent where the car went over a curb at a toll booth, they said $350 which was about what it should have cost and since it was under $500 I also was not charged even though I did not end up releasing with them. This was a mid level car but I wonder if the inflated costs to fix minor items will change end of lease estimates at some point

Mostly paint, paint went through the roof.
Bumpers went from metal to plastic. Plastic can’t be bondo’d you know.
Also in any accident with speed, the inside of the bumper has to be changed, completely. Plastic parts and styrofoam are roughly use ONCE then throw away items. More $$$

So basically a front or rear accident is more costly than say a side scratch.

Like all things, it depends.

Most 2017 CRVs (unlike a 2007) have parking sensors, so in addition to painting or replacing a bumper cover, you have the potential for rewiring and calibrating the parking system. I can’t speak to Honda, but on my erstwhile 2016 GTI calibration of the parking sensors is a 4 hour job, that could (at the time) only be done at one dealership in 50 miles (undoubtedly all of them could now, it’s a six-figure system) and can only be done in daylight hours. Retail/non-warranty just to do that is over $600.

That year CRV in particular has a much higher total rate for small accidents if you crash the front bumper because the labor to rewire and re-calibrate is often not worth it.

As cars continue to get more complicated, remember that most of them are designed to be efficiently manufactured which is often the opposite of easily repairable. :man_shrugging:t2:

It’s gotten even more complicated. This is how tesla calibrates Model 3 cameras and sensors


As predicted, it is totaled. Are there any options for replacement? He asked if I could find him a nice $200 compact lease! I laughed, told him I have been looking for that for months! I get the joy of taking him car shopping this weekend. Normally this would be a great time to go, near the end of the month but I am not sure what we will find. Suggestions? AWD preferred although he is fine with a sedan, wants as cheap as is available. Immediate would be good!