Depending on your insurance policy, there may be another option: invoking the appraisal clause.

What Is an Appraisal Clause?

Many automobile insurance policies contain an appraisal provision designed to provide a process for resolving disagreements over the amount of loss.

While the exact language and procedure vary by policy, the process commonly allows both sides to select their own competent appraiser when the insured and insurance company cannot agree on the amount of the loss.

In a typical appraisal process:

1. You select an appraiser to represent your valuation position.
2. The insurance company selects its own appraiser.
3. The two appraisers review the available evidence and attempt to reach an agreement on the amount of loss.
4. If they cannot agree, the matter may be submitted to an umpire, subject to the terms of the policy.
5. An agreement between the required parties may establish the amount of loss.

The specific process, requirements, expenses, and effect of an appraisal award depend on the language of your insurance policy and applicable law.

When Should You Consider the Appraisal Clause?

Invoking appraisal may be worth exploring when there is a meaningful and legitimate disagreement over the value of your vehicle and ordinary efforts to resolve that disagreement have been unsuccessful.

For example, you may believe the insurance company's valuation:

• Uses vehicles that are not truly comparable to yours;
• Does not properly account for trim, equipment, options, mileage, or condition;
• Relies on questionable or unsupported adjustments;
• Does not accurately reflect your local or relevant vehicle market; or
• Simply does not reflect what your vehicle was reasonably worth immediately before the loss.

An independent appraisal can help identify and document these differences. If the disagreement remains, the appraisal provision may provide a contractual process for addressing the valuation dispute.

Invoking Appraisal Is Different From Simply Getting an Appraisal

This distinction is important.

Hiring an independent appraiser to determine the value of your vehicle does not necessarily mean you have formally invoked the appraisal provision of your insurance policy.

Once the appraisal clause is invoked, your selected appraiser may be expected to communicate with the insurance company's appraiser, exchange valuation evidence, discuss differences in methodology and comparable vehicles, and work toward an agreed amount of loss.

If the two appraisers cannot agree, they may need to select an umpire and proceed to the next stage of the process.

That makes the selection of your appraiser particularly important.

Autopraisal Can Support You Through the Process

At Autopraisal, we provide independent, market-based vehicle valuations designed to determine what your vehicle was actually worth based on its specific characteristics and relevant market evidence.

If you have already received a Total Loss Valuation Appraisal from Autopraisal and decide to pursue the appraisal provision in your policy, we may also be able to serve as your selected appraiser through our Appraisal Clause Support service.

Rather than simply handing you a report and walking away, we can use the research, comparable vehicles, adjustments, and valuation conclusions developed during your appraisal as the foundation for presenting and supporting our opinion of value during the appraisal process.

Our role remains that of an independent vehicle appraiser. We do not provide legal advice, determine insurance coverage, interpret policy provisions for clients, or provide public adjusting services.

Before You Invoke the Appraisal Clause

Before beginning the process, read the appraisal provision in your insurance policy carefully. Appraisal language can differ significantly from one policy to another, including requirements for invoking appraisal, selecting appraisers and an umpire, allocating expenses, and determining how an award is reached.

If you are unsure whether appraisal is available, enforceable, or appropriate for your particular dispute, consider speaking with a qualified attorney or other appropriately licensed professional.

But if the issue is vehicle value, that is where Autopraisal can help.

Don't Settle a Valuation Dispute Without Understanding Your Options

If your vehicle has been declared a total loss and you believe the insurance company's valuation is too low, you do not have to rely solely on the numbers presented to you.

Contact Autopraisal today to discuss your total loss valuation and whether our Appraisal Clause Support service may be appropriate for your situation.

A professional, independent valuation can help you understand what your vehicle was actually worth and provide the evidence needed to support that value.

Across the United States, insurance companies determine total losses using one of two regulatory systems: the Total Loss Threshold (TLT) or the Total Loss Formula (TLF). Understanding the difference empowers you to question low valuations, negotiate more effectively, and avoid being pressured into accepting an incorrect settlement.

Below is a simple breakdown of what these methods mean and when each one is used.

What Is the Total Loss Threshold (TLT)?

How It Works

1. The insurer calculates your car’s ACV before the accident.

2. They prepare an estimate for the repair cost.

3. If repair cost ≥ (ACV × the state’s threshold %), the vehicle is totaled.

Example

If your vehicle’s ACV is $10,000 and your state threshold is 75%, then:

• Threshold amount = $10,000 × 0.75 = $7,500

• If repair costs exceed $7,500 → Automatic total loss

Why States Use TLT

• Ensures consistency

• Protects consumers from unsafe repairs

• Limits insurers from repairing vehicles that likely should not be on the road

States Using a Threshold

Many states—including Florida, Georgia, Indiana, Maryland, and others—apply a legally mandated percentage, often between 60% and 80%.

What Is the Total Loss Formula (TLF)?

Repair Cost + Salvage Value ≥ ACV

If the formula is true, the vehicle is considered a total loss.

How It Works

1. Insurer determines pre-loss ACV.

2. They estimate repair costs.

3. They determine the salvage value (what the damaged vehicle would sell for at auction).

4. Add repair cost + salvage value.

5. If that sum is equal to or greater than ACV → Total loss.

Example

• ACV = $12,000

• Repair cost = $7,000

• Salvage value = $5,500

• $7,000 + $5,500 = $12,500 ≥ ACV

→ Vehicle is totaled under TLF

Why States Use TLF

• Allows insurers flexibility depending on market salvage conditions

• Reduces unnecessary totals when salvage value is low

• Encourages use of real-world repair and salvage data

States Using TLF

States like California, Massachusetts, Georgia, Illinois, Washington, and others use TLF rather than a fixed percentage.

TLT vs. TLF: Key Differences

Why This Matters for Consumers

Understanding your state’s system is critical because:

    1. It affects whether your car is declared a total loss.

• In a TLT state, even borderline repairs can trigger an automatic total.

• In a TLF state, small changes in salvage value can make or break a total-loss decision.

    2. It impacts your settlement amount.

• Total losses require insurers to determine your ACV.

• Under low thresholds, insurers may total cars more frequently.

• Under high thresholds or formula states, insurers may choose repair when the car might actually be unsafe or not worth fixing.

    3. It affects your negotiation power.

If you understand the method your state uses, you can better challenge:

• An incorrect ACV

• Inflated salvage values

• Repair estimates used to influence the total-loss decision

When You Should Ask Questions or Seek Help

You should consider getting assistance from an independent appraiser if:

• The insurer’s ACV seems too low

• The vehicle barely meets the threshold or formula criteria

• The salvage value seems artificially high

• You want supporting documentation to negotiate a fair payout

Professionals can provide market data and valuation reports insurers take seriously.

Final Thoughts

Whether your state uses the Total Loss Threshold or the Total Loss Formula, the determination plays a major role in how insurance companies decide the fate of your vehicle—and how much money you ultimately receive. Understanding the system gives you leverage, prevents mistakes, and helps ensure you aren’t taken advantage of during a stressful situation.

List of US States (including DC) and their methodology: