How do insurance companies calculate total loss? Each auto insurance company has different rules for performance bonds calculating loss, and those rules depend on your state's damage limits.

In some states, insurance companies base their calculations on the car's current list price. In other states, they compare the car's value to its wholesale or salvage value. The best way to know how much your car is worth is by checking with a few different insurance companies and asking them how they calculate total loss.

The best way to protect your vehicle in case of damage? Get good coverage! Be sure you have enough liability coverage on your policy to cover any damages caused by an accident. And beware of "excess" or "deductible" clauses in the fine print of your policy: these are traps that can end up costing you even more money down the line if something happens and things go wrong.

Here's one example from a friend of mine: he had a fender bender, and his insurance company deducted the deductible from his policy premium and did not pay for repairs to his car. At the time, it was considered an "excess" or "deductible" on his policy and was supposed to be added automatically.

Then one day he had a few potholes in his neighborhood that damaged his car: no damage coverage paid for them, because they were considered "other than collision." The problem? These are not covered by the policy! That is why you need to know what your rights are as an insured in all aspects of your policy, including any "excesses.

And as always, if you ever have questions on your auto insurance policy and want to know more about your rights as an insured, call your insurance company representative.

Title:How does insurance calculate total loss?

How does insurance calculate total loss? Each auto insurance company has different rules for calculating loss, and those rules depend on your state's damage limits. In some states, insurance companies base their calculations on the car's current list price. In other states, they compare the car's value to its wholesale or salvage value.