Total Loss in Michigan: The 75% Threshold and What Your Car Is Worth
Michigan treats a newer car as a total loss when the estimated damage is 75% or more of its pre-damage actual cash value: from 75% up to 91% it gets a salvage title, and at 91% or more a scrap title. Michigan’s no-fault system also changes who pays for your car. Here is how the rule works, how your payout is set, and what to do if the offer looks low.
Quick note: this is about total loss, when the car is not being repaired. If your car was repaired but is now worth less, that is diminished value, a different process.
Start The Total Loss Appraisal Process
If your insurer’s offer does not look right, do not rely on guesswork. DVAC can review the valuation, identify problems, and provide an independent total loss appraisal to help you challenge a low settlement offer.
No obligation required.
A+ Rating on BBB | Servicing Clients Nationwide
Key takeaways
- Michigan uses a 75% threshold for late model cars: damage of 75% to less than 91% of the car’s pre-damage actual cash value means a salvage title, and 91% or more means a scrap title.
- A late model car is one from the current model year or the five before it (up to 8,000 pounds).
- Actual cash value must come from an objective evaluation using local market resources such as dealers and listings, or an independent appraisal.
- Under no-fault, your car’s damage is usually paid by your own collision coverage, and you can recover up to $3,000 from the at-fault driver for what insurance does not cover.
- If the offer looks low, an independent total loss appraisal gives you a documented Michigan market value to challenge it.
What is Michigan’s total loss threshold?
Michigan’s threshold is 75% for late model vehicles. Under the Michigan Vehicle Code, when an insurer pays a total loss claim on a late model car, it must surrender the title for a salvage title if the estimated damage is equal to or more than 75% but less than 91% of the car’s predamaged actual cash value, or for a scrap title if the damage is 91% or more. A late model vehicle weighing 8,000 pounds or less is one made in the current model year or the five model years before it.
Repair parts are counted at current published retail cost, and labor at rates and times that are reasonable and common in your local repair industry. (Sources: MCL 257.217c and MCL 257.24b. General information, not legal advice; confirm the current rule for your situation.)
Michigan total loss at a glance
Item | Michigan |
Threshold | 75% for late model cars |
Salvage title | Damage of 75% to less than 91% |
Scrap title | Damage of 91% or more |
Late model | Current model year plus the 5 before it, up to 8,000 pounds |
Compared with | Pre-damage actual cash value |
Who pays for your car | Usually your own collision coverage, under no-fault |
At-fault driver | Up to $3,000 for damage insurance does not cover |
What you are paid | Actual cash value, less your deductible |
How they decide if your car is totaled in Michigan
The insurer estimates the damage, using retail parts prices and local labor rates, and compares it to your car’s actual cash value before the damage. For a late model car, once the damage reaches 75% of that value, the car is titled as salvage, and at 91% it is titled as scrap. For example, if your car was worth $20,000 before the accident, damage of $15,000 or more means a salvage title, and $18,200 or more means a scrap title.
Michigan defines actual cash value as the retail dollar value of a vehicle, determined by an objective evaluation using local market resources such as dealers or want ads, or by an independent vehicle evaluation or appraisal service. It is worth understanding actual cash value versus fair market value.
How Michigan no-fault affects a total loss
Michigan’s no-fault system works differently from most states for car damage. In general, the damage to your own car is paid by your own collision coverage, if you carry it, not by the at-fault driver’s insurer. For damage your insurance does not cover, such as your deductible, Michigan lets you recover up to $3,000 from the at-fault driver for accidents after July 1, 2020, often called the mini-tort (MCL 500.3135(3)(e)). That makes the value your own insurer puts on your car especially important.
How your total loss payout is set
Your payout should equal what it would cost to buy the same car again today in your local Michigan market. Insurers usually set it with a third-party valuation report, such as a CCC valuation, that compares similar local vehicles, then adjusts for your car’s details. Michigan’s own definition points to local market evidence, so local dealer prices and listings carry real weight. Here is what moves the number, and for a closer look, see what your totaled car is worth:
What affects your payout | How it moves the number |
Mileage | Lower miles raise value; a wrong higher reading lowers it |
Condition | Clean condition raises value; heavy deductions lower it |
Trim and options | Factory options and higher trims add value, if counted |
Local market | Prices for the same car in Michigan set the baseline |
Comparison cars | The vehicles used for comparison can pull the number up or down |
Can you keep your totaled car in Michigan?
Yes, if your insurer lets you. In that case, Michigan law requires the insurer to have you sign an application for a salvage or scrap title, attach your title, and apply for the new title on your behalf. You may not sell or dispose of the car until you receive that salvage or scrap title. The insurer deducts the salvage value from your payout, so ask for that figure in writing before you decide.
What to do if your Michigan total loss offer looks low
Read the valuation report line by line and compare it to current dealer listings for the same year, make and model in your part of Michigan. Look for the wrong mileage, missing options, or comparison cars that do not match yours. If your research lands above the offer, that is a strong reason to ask for a corrected valuation.
Next, check your policy for an appraisal clause, a provision many policies include for resolving a disagreement over value, and see how to dispute a total loss settlement offer step by step.
How an independent appraisal helps in Michigan
Michigan’s definition of actual cash value specifically includes an independent vehicle appraisal, so a documented appraisal is a natural way to show your car’s real value. Our total loss appraisal service values your vehicle using comparable vehicles in your local market and gives you the documentation to challenge a low offer. You stay in contact with your insurance company, and we advise you on what to say and what to do next. If the appraisal clause is invoked, DVAC negotiates and resolves the value with the third-party appraiser the insurance company hires.
See how this worked for a Chevrolet Silverado in Michigan, or look at a sample total loss appraisal report to see what the insurer receives.
Michigan total loss questions
Is Michigan a 75% total loss state?
Yes, for late model cars. Damage of 75% to less than 91% of pre-damage actual cash value means a salvage title, and 91% or more means a scrap title.
What counts as a late model car in Michigan?
A car up to 8,000 pounds from the current model year or the five model years before it.
Can I claim my totaled car from the at-fault driver in Michigan?
Under no-fault, your own collision coverage usually pays, and you can recover up to $3,000 from the at-fault driver for damage insurance does not cover, for accidents after July 1, 2020.
What does an insurer pay for a totaled car in Michigan?
The car’s actual cash value, less your deductible, and less the salvage value if you keep the car. Learn more in total loss settlements: what you need to know.
Get a free Michigan total loss appraisal consultation
If your Michigan offer feels low, start your appraisal or call (877) 879-0101 for a free consultation, and we will give you a documented market value to support your claim.
Real Reviews, Real Results
Total Loss Appraisal Report:
Wondering what’s in a DVAC appraisal? Take a look at this recent appraisal we completed for a client.
