Total Loss Threshold (TLT)

The total loss threshold is the percentage of a vehicle's ACV at which an insurer declares it a total loss rather than authorizing repairs. It typically falls between 70 and 90 percent of ACV depending on the state and insurer.

Understanding TLT is relevant to dealers handling insurance replacement situations, trade-ins on damaged vehicles, and GAP claims. When a vehicle's repair estimate approaches or exceeds the threshold, dealers should be prepared to walk the customer through the total loss process and the role of GAP coverage.