My Car Was Totaled in Arkansas. Is the Insurance Offer Too Low?
Maybe — but before you argue about the number, check what’s missing from it. Arkansas law requires several things to be included in a total loss payment that adjusters don’t always add, and one of them is worth hundreds of dollars on its own.
The short answer
Start with what Arkansas requires. Under Ark. Code § 23-89-211, a total loss payment must include applicable sales taxes and fees, plus an itemized list showing what’s attributed to the vehicle and what’s attributed to tax. If those are missing, the offer is short before you even debate the car’s value.
Four things Arkansas law puts in a total loss payment.
Most people go straight to arguing about what the car was worth. Check these first — they’re objective, they’re often missing, and they don’t require you to win an argument about value.
Sales tax
When an insurer settles a total loss, it must include applicable taxes — including sales taxes — and fees, as required under the Insurance Department’s Rule and Regulation 43. On a vehicle valued in the tens of thousands, that alone is a meaningful number.
An itemized list
You’re entitled to a breakdown stating how much of the claim is attributable to the vehicle’s value and how much to the sales tax on a vehicle of that value. If you got a single lump figure with no breakdown, ask for this in writing.
License and other fees
When settling a claim against an insured, the insurer takes into consideration applicable taxes, license fees, and other fees. Replacing a car means retitling and registering it — those costs are part of the picture, not an afterthought.
Towing and storage can’t be dumped on you
An insurer may not abandon the salvage to a towing or storage facility in lieu of paying those fees without the consent of both the facility and you. Storage accrues daily, so this one matters fast — and almost nobody knows it exists.
These aren’t courtesies. They’re requirements with teeth.
Subsection (d) of the same statute provides that an insurer’s failure to comply with these requirements is considered an unfair claims settlement practice under Ark. Code § 23-66-206.
That matters when you pick up the phone. You aren’t asking a favor — you’re asking the carrier to do what the statute requires. Ask politely, ask in writing, and ask specifically: “Please send the itemized breakdown required under Ark. Code § 23-89-211, showing the amount attributed to the vehicle and the amount attributed to sales tax.” Most of the time that one sentence is the whole conversation.
Source: Ark. Code § 23-89-211, verified against the published Arkansas Code (text consistent across the 2010 through 2024 editions). Subdivision numbering within § 23-66-206 has been amended over time, so the section rather than the subdivision is cited here. This is general information, not legal advice.
“Arkansas totals your car at 70%” — not quite.
You’ll read this everywhere. It’s a real number, applied to the wrong question.
The salvage title threshold
Arkansas defines a salvage vehicle as one where the cost of repair equals or exceeds 70% of average retail value (Ark. Code § 27-14-2301). That determines how the vehicle gets titled afterward.
It’s about the paperwork that follows the car, not about when your insurer must write it off.
An economic analysis
Arkansas sets no fixed statutory threshold that forces a first-party total loss. The insurer compares what repairs would cost, plus what the wreck is worth as salvage, against the car’s actual cash value — governed by your policy language.
Which is why two carriers can look at the same wreck and reach different conclusions.
Why it matters practically: if you’re arguing that your car shouldn’t have been totaled — or that it should have been — pointing at 70% isn’t the argument. The argument is about the repair estimate, the salvage value, and the actual cash value the insurer assigned. Those three numbers are where the decision actually lives, and all three are things you can ask to see.
Sources: Ark. Code § 27-14-2301 (salvage vehicle definition); Matthiesen, Wickert & Lehrer state survey on Arkansas first-party total loss thresholds. Policy language controls the total loss determination on your claim.
How actual cash value gets built — and where to push.
ACV isn’t a lookup. It’s a constructed figure, usually from a third-party valuation report, and constructed figures have inputs you can check.
Two things worth understanding about the process.
Adjusters are working from a report, not an opinion of you. A low offer is usually a data problem, not hostility. Correcting an input is a much easier conversation than disputing a judgment, which is why the comparables are the place to start.
Your policy may have an appraisal provision. Many auto policies include a process where each side hires an appraiser and, if they disagree, an umpire decides. It has costs and tradeoffs and it isn’t right for every gap. Read your policy, or ask us to read it with you, before invoking anything.
When the check is correct and still isn’t enough.
| The situation | Illustrative numbers | Where you land |
|---|---|---|
| You own the car outright | ACV $18,000, less your deductible | You keep the payment. Whether it buys a comparable replacement is the real test of whether the valuation was right. |
| You have a loan, and you have equity | ACV $18,000, loan balance $14,000 | The lender is paid first; the remainder comes to you. |
| You have a loan, and you’re upside down | ACV $18,000, loan balance $23,000 | You still owe roughly $5,000 on a car you no longer have — unless you carry gap coverage. This is the situation that surprises people most. |
| You lease | Varies by lease terms | The lease agreement governs what’s owed. Read it before you assume the insurance settlement closes it out. |
Illustrative figures for explanation only — not quotes, not predictions, and not coverage determinations. Deductibles, loan payoff mechanics, gap availability and terms, and lease obligations vary; your policy and loan or lease documents control.
The lesson lands one crash too late.
Nobody buys gap coverage after the wreck. New vehicles depreciate fastest in the first couple of years, and with longer loan terms and smaller down payments, being upside down early is normal rather than unusual. If you’re financing a vehicle now, that is the moment the decision is available to you — not after.
If you’re reading this because it already happened, the useful move is making sure the vehicle you replace it with is set up correctly from day one. Here’s how long you have to add a new car in Arkansas — and it’s shorter than most people think.
Two Northwest Arkansas realities.
Roughly one in six Arkansas drivers is uninsured.
If the driver who totaled your car has no insurance — or minimum limits that don’t cover your vehicle — the coverage that responds is your own uninsured or underinsured motorist coverage, and for the vehicle itself, your collision coverage. This is the scenario people assume won’t happen to them, in a state where the odds say otherwise. More on uninsured motorist coverage in Arkansas.
Hail totals cars here, not just roofs.
A severe hailstorm can cause enough cosmetic damage to exceed a vehicle’s value, particularly on an older car — and that’s a comprehensive claim rather than a collision one. The valuation questions on this page apply identically. If you carry liability only, there is no coverage for hail damage to your own vehicle at all.
Cribby is our AI insurance assistant — ask it anything about coverage, Arkansas rules, or what a claim document actually means, in plain English, any time of day. It’s free and there’s no form to fill out first.
Total loss questions we hear most.
Does Arkansas require insurance to pay sales tax on a totaled car?
Yes. Under Ark. Code § 23-89-211, when an insurer settles an automobile claim as a total loss it must include with the payment all applicable taxes, including sales taxes and fees required under the Insurance Department’s Rule and Regulation 43. It must also provide an itemized list showing how much of the claim is attributable to the vehicle’s value and how much to the sales tax on a vehicle of that value. Failure to comply is treated as an unfair claims settlement practice. This is general information, not legal advice.
At what point does Arkansas consider a car a total loss?
Two different questions get confused here. Arkansas defines a salvage vehicle as one where repair costs equal or exceed 70% of average retail value, which governs how the vehicle is titled afterward. There is no fixed statutory threshold that forces your insurer to declare a first-party total loss — that decision is an economic analysis comparing repair cost and salvage value against actual cash value, governed by your policy language. If you’re disputing the decision, the repair estimate and the ACV are the relevant numbers, not the 70% figure.
What can I do if the total loss offer seems too low?
Request the underlying valuation report rather than the summary, and check the comparable vehicles it used against your actual car — wrong trim, higher mileage, or distant listings are common and correctable. Document options, recent maintenance, and condition with receipts and dated photos. Build your own comparables from current local listings. Then put your position in writing with the evidence attached, so it enters the claim file. Many policies also contain an appraisal provision; read it before invoking it.
Can the insurance company leave me with the towing and storage bill?
Not unilaterally. Ark. Code § 23-89-211(c) provides that an insurer may not abandon salvage to a towing or storage facility in lieu of paying towing and storage fees without the consent of both the facility and the insured. Storage charges accrue daily, so raise this early rather than after the bill has grown. As with the rest of the section, non-compliance is treated as an unfair claims settlement practice.
What happens if I owe more on my car than the insurance pays?
Without gap coverage, you remain responsible to the lender for the balance after the settlement is applied — you can owe money on a vehicle you no longer have. Gap coverage is designed to address that difference and generally has to be in place before the loss; it cannot be added afterward. If you’re financing a vehicle with a small down payment or a long loan term, that’s the point at which the decision is available to you.
Does my insurance cover a car totaled by hail in Arkansas?
Comprehensive coverage responds to hail damage, including when the damage exceeds the vehicle’s value and the car is declared a total loss. Collision coverage does not apply to hail, and a liability-only policy provides no coverage for damage to your own vehicle. The valuation process for a hail total loss is the same as any other, so the same questions about comparables and documentation apply.
What if the driver who totaled my car had no insurance?
Your own coverage is what responds. Collision coverage pays for damage to your vehicle regardless of who was at fault, subject to your deductible. Uninsured and underinsured motorist coverage addresses injuries and, depending on the coverage you carry, other losses when the at-fault driver has no insurance or not enough. With roughly one in six Arkansas drivers uninsured, this is a realistic scenario rather than an edge case.
Related Arkansas auto insurance guides.
If our insurance guides and AI tools are useful, you can mark Cribb Insurance as a preferred source so more Northwest Arkansas drivers find accurate local guidance.
We can’t adjust your claim. We can make sure the next policy is built right.
Cribb Insurance Group doesn’t handle claims and can’t overrule an adjuster — but we can read your policy with you, tell you what it actually says about total loss settlement and appraisal, and make sure the vehicle you replace this one with has the coverage it needs from day one. Including gap, if you’re financing.
This article is general information about automobile total loss settlements in Arkansas. It is not legal advice, not a coverage determination, and not an offer of insurance. Statutory references — including Ark. Code § 23-89-211 (total loss settlements), § 23-66-206 (unfair claims settlement practices), and § 27-14-2301 (salvage vehicle definition) — are summarized and simplified for a general audience, are subject to amendment and to rules promulgated by the Arkansas Insurance Department, and are described in substance rather than reproduced as statutory text. Subdivision numbering within § 23-66-206 has been amended over time. Whether any provision applies to your claim depends on the specific facts. Confirm with the Arkansas Insurance Department or qualified counsel.
Cribb Insurance Group Inc. does not adjust claims, does not determine coverage, and cannot direct or overrule any insurer’s claim decision. Nothing on this page should be understood as a representation about how any particular claim will be handled or what any vehicle is worth. Total loss determinations, actual cash value calculations, valuation methodologies, appraisal provisions, and settlement practices vary by carrier and by policy form and are governed by the policy actually issued to you, which controls in all cases.
The figures used in the loan and lease examples are illustrative round numbers created to explain how a shortfall arises. They are not quotes, not predictions, and not based on any actual claim. Gap coverage availability, terms, eligibility, and timing requirements vary by carrier and product and generally must be arranged before a loss occurs; loan and lease obligations are governed by your finance documents.
Statements about uninsured driver rates in Arkansas reflect commonly reported industry estimates and are provided for general context. Coverage is subject to policy terms, conditions, exclusions, and underwriting approval. For guidance on your specific policy, contact a licensed Cribb Insurance Group advisor.
Cribb Insurance Group Inc. is an independent insurance agency licensed in Arkansas. Last reviewed July 2026.