When a car is "totaled," it means that the damage to the vehicle would cost more to repair than the vehicle is worth, making it a "total loss." Sometimes, the cost of repair is less than the value of the car but is still totaled due to other factors.
When an insurance company assesses a damages claim, its representative calculates the Total Loss Formula, or TLF, which adds the cost of repairing the vehicle with its salvage value and compares that to the Actual Cash Value, or ACV, of the vehicle. The threshold for this varies by state. Some states require that the cost of repairs and salvage value must match or exceed the ACV to be totaled, while others allow the threshold to be as low as 65 percent of the ACV.