What does "total loss" mean in the context of auto insurance?

In the context of auto insurance, "total loss" refers to a situation where the cost to repair a damaged vehicle exceeds its actual cash value. When an insurance adjuster determines that the repair expenses are disproportionately high relative to what the vehicle is worth, the vehicle is classified as a total loss. In such cases, the insurer typically pays the policyholder the vehicle's cash value rather than covering the repair costs, as it is deemed economically unfeasible to fix the vehicle.

Other options outline different scenarios that are important in insurance but do not fulfill the definition of "total loss." For example, if a vehicle is stolen and not recovered, it may also lead to a total loss, but not all stolen vehicles are considered total losses unless the value issue is the same as the repair cost exceeding cash value. The situation where a vehicle can be repaired for less than its value would not qualify as a total loss, as it suggests that repairs are feasible and economically sound. Lastly, terminating an insurance policy due to non-payment does not connect with the mechanical or monetary assessment of a vehicle's status in case of damage or theft.