When is a vehicle considered "totaled" by an insurer?

A vehicle is considered "totaled" by an insurer when the cost of repairs exceeds the vehicle's actual cash value (ACV) at the time of the loss. This determination reflects a common standard used in the insurance industry. If repairing the vehicle would cost more than what it is worth, it is economically unfeasible for the insurer to pay for repairs.

This concept is rooted in the principle of economic efficiency, where insurers aim to minimize losses. If the repair costs surpass the vehicle's value, the insurer will typically opt to declare it a total loss and compensate the policyholder based on the vehicle's worth before the incident.

The other choices do not align with the definition of a total loss. Selling a vehicle for parts is a subsequent action that may occur after it has already been declared totaled but does not itself classify a vehicle as totaled. Missing history records pertain to a vehicle's documentation but do not influence its total loss status. Lastly, a vehicle's age alone does not determine whether it is totaled; its value and repair costs are the critical factors.