Illinois "Total Loss" Insurance Definition

In Illinois, your wrecked vehicle is a total loss if repairing it would cost as much or more than your insurer thinks it's worth. Your car's status as a total loss is important; it affects your insurer's options for handling your claim, and whether you can keep the car or have to dispose of it.


After an accident, you must report the loss to your insurer immediately, and take steps to prevent further damage. If the window is shattered, damage from a storm drenching the interior isn't covered. The insurer can choose whether to repair your car, replace your car or reimburse you with cash. To determine the car a total loss -- and therefore too expensive to repair -- the insurer will evaluate its value using comparable used-car price guides and compare it to the cost of repairs.


If your insurer opts to replace your car, it must be a make and model comparable to your totaled car, and the condition must be as good or better than your vehicle was prior to the accident. The insurer must buy it from a legitimate dealer, and, if it's not more than 3 years old, provide a warranty. You can choose to refuse a replacement car, but the company can then settle your claim by paying you the price, including taxes and transfer fees, it would have paid for the replacement.


If you want to accept a cash settlement and hang on to your car, that may not be an option. To discourage the use of "chop shops," criminal operations breaking cars down for parts, Illinois law says that if your totaled car is 9 years old or less, you have to turn it over to the insurer with the title. If the car has sustained only hail damage and is still drivable, the insurer can choose to let you keep it.


If within 30 days of receiving a cash settlement you find a replacement car that costs more than your settlement, your insurer must either pay to cover the difference, find a cheaper car or negotiate a lower price. This does not apply if the settlement was based on the price of a replacement vehicle you refused to accept. If you have a car loan, your insurer does not have to pay it off, but your lender might agree to accept your replacement vehicle as replacement collateral.