My Car Was Totaled in Arkansas. Is the Insurance Offer Too Low?
Before arguing about what the vehicle was worth, check what Arkansas requires to be in the payment. Several things are, they are objective, and leaving them out is a defined unfair claims settlement practice.
Short Answer
Start with what the statute requires rather than with the number. Under Ark. Code § 23-89-211 a total loss payment must include applicable taxes and fees and come with an itemized list separating the vehicle’s value from the sales tax. If those are absent the offer is short before anyone debates what the car was worth.
A total loss offer arrives as one figure, and the argument that follows is almost always about whether that figure is right. There is an earlier question that is easier to answer and more often decided in your favor: whether the payment contains everything Arkansas requires it to contain.
What the Statute Requires in the Payment
Taxes, fees, and an itemized breakdown
Under Ark. Code § 23-89-211, an insurer settling an automobile claim as a total loss shall include with the payment all applicable taxes, including sales taxes, and fees as provided in the Insurance Department’s rules. It must also provide an itemized list 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. Where the settlement is with a third party rather than an insured, the same section provides that the insurer will take into consideration applicable taxes, license fees and other fees.
The salvage cannot simply be left with the tow yard
The same section provides that an insurer may not abandon the 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 accrues daily, which is why this one is worth raising in the first days rather than after a bill has built up. It is also the least known provision in the section.
These are requirements rather than courtesies
The same section provides that failure to comply is considered an unfair claims settlement practice under Ark. Code § 23-66-206. So a request for the itemized breakdown is a request that the statute already requires be met, and it can be made in exactly those terms. If a carrier does not comply, the Arkansas Insurance Department takes consumer complaints and that is the venue for it — a step to take alongside pursuing the claim rather than instead of it.
The Seventy Percent Figure Answers a Different Question
It is a titling rule, not a total-loss trigger
Arkansas defines a salvage vehicle as one that sustains damage in an amount equal to or exceeding seventy percent of its average retail value, under Ark. Code § 27-14-2301 — and the statute adds that the figure is determined under criteria established by rule of the Office of Motor Vehicle rather than by the insurer. That definition governs how the vehicle is titled after the fact. It does not oblige an insurer to declare your car a total loss, and Arkansas sets no fixed statutory threshold that does. Whether a vehicle is written off is an economic comparison — repair cost and salvage value against actual cash value — governed by the policy language. The figure is quoted almost everywhere as though it were the trigger, and it is not.
That cuts both ways, and the second direction surprises people more. Because the threshold does not control the decision, a vehicle can be written off before it reaches seventy percent. An adjuster who expects supplements or hidden damage to carry the final figure past the line can make the call early rather than tear the vehicle down twice and revisit it. So the number is neither a floor nor a ceiling on the decision. It decides what the title says at the end of it.
Which matters if the disagreement is about the decision rather than the amount. Pointing at seventy percent is not the argument, in either direction. The repair estimate, the salvage figure and the actual cash value the carrier assigned are the three numbers the decision was built from, and each of them can be asked for.
Where the Valuation Actually Comes From
Actual cash value is a constructed figure, generally produced by a third-party valuation report rather than looked up, and a constructed figure has inputs.
- Ask for the report itself rather than the summary letter. The underlying report shows which comparable vehicles were used, along with their mileage, trim and condition, and any adjustments applied. It is the document the number came from.
- Read the comparables against the vehicle you actually owned. Trim level, drivetrain, mileage and how far away the listings were are the inputs that most often do not match, and a mismatch is a factual question rather than a matter of opinion.
- Gather what documents the vehicle’s condition. Service records, receipts for recent work, dated photographs, and anything establishing options fitted. Records exist or they do not; that is the useful kind of evidence here.
Where this page stops, and what the formal routes are
We do not adjust claims, cannot determine coverage, and cannot overrule a carrier’s decision. A disagreement about what a vehicle was worth is between you and the insurer, and there are two formal mechanisms rather than tactics. Many auto policies contain an appraisal provision setting out a process where each side appoints an appraiser and a third resolves a disagreement; it has costs and conditions and the policy sets them out. And the Arkansas Insurance Department accepts consumer complaints where a carrier has not met the statutory requirements above. Reading your own appraisal clause before invoking anything is worth doing, and we will read it with you.
When the Payment Is Correct and Still Not Enough
A settlement pays what the vehicle was worth. It does not pay what is owed on it, and those are different numbers whenever a loan has run behind the depreciation — which on a long term with a small deposit is ordinary rather than unusual.
The coverage written for that difference has to be in place beforehand and cannot be added after a loss, so the decision belongs at the point of financing rather than at the point of claim. How it works and when it earns its place is covered on the gap insurance page, which owns that subject. A lease is different again, and the lease agreement rather than the policy decides what remains owed.
Two Things That Come Up Here Specifically
- Hail totals vehicles, not only roofs. Enough cosmetic damage can exceed an older vehicle’s value, and that is a comprehensive loss rather than a collision one. Everything above about valuation applies identically. A liability-only policy provides nothing toward damage to your own vehicle — that and the rest of comprehensive is on the hail page.
- If the at-fault driver had nothing, your own policy is what answers. Collision responds to your vehicle regardless of fault, subject to the deductible. Uninsured and underinsured motorist coverage answers on the injury side, and the property damage side of it carries its own statutory deductible — both are covered on the uninsured motorist page and on the deductibles page.
What to do in the first week
Ask for the itemized breakdown the statute requires, in writing. Ask for the valuation report rather than the summary. Raise towing and storage early, before charges accumulate. Locate your policy’s appraisal provision so you know whether it exists before you need it. None of those requires winning an argument, and all four are available immediately.
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Frequently Asked Questions
Does Arkansas require an insurer to pay sales tax on a totaled car?
Yes. Under Ark. Code 23-89-211, an insurer settling an automobile claim as a total loss shall include with the payment all applicable taxes, including sales taxes, and fees as provided in the Insurance Department’s rules. It must also provide an itemized list 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.
What happens if the insurer leaves those things out?
The same section provides that failure to comply with its requirements is considered an unfair claims settlement practice under Ark. Code 23-66-206. A request for the itemized breakdown can therefore be made as a request that the statute be complied with, and the Arkansas Insurance Department accepts consumer complaints where it is not.
Does Arkansas total a car at seventy percent of its value?
No, and this is the most commonly repeated error on the subject. Arkansas defines a salvage vehicle as one that sustains damage in an amount equal to or exceeding seventy percent of its average retail value under Ark. Code 27-14-2301, determined under criteria established by rule of the Office of Motor Vehicle, and that definition governs how the vehicle is titled afterward. There is no fixed statutory threshold obliging an insurer to declare a total loss. Because the threshold does not control the decision, it works in both directions: a vehicle can also be written off below seventy percent where the final figure is expected to pass it.
Can the insurer leave me with the towing and storage bill?
Not unilaterally. Ark. Code 23-89-211 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 it is worth raising early rather than after a bill has accumulated.
How is actual cash value worked out on a totaled vehicle?
It is generally a constructed figure rather than a lookup, produced by a valuation report built from comparable vehicles with adjustments for mileage, trim and condition. You can ask for the underlying report rather than the summary letter, and read the comparables against the vehicle you actually owned. Whether the inputs match your car is a factual question.
What can I do if I disagree with the valuation?
A disagreement about what a vehicle was worth is between you and the insurer. Many auto policies contain an appraisal provision setting out a process where each side appoints an appraiser and a third resolves the difference, with costs and conditions the policy specifies. Separately, the Arkansas Insurance Department accepts consumer complaints where a carrier has not met statutory requirements. An insurance agency does not adjust claims or determine coverage and cannot overrule a carrier’s decision.
What if I owe more than the settlement pays?
The settlement pays what the vehicle was worth rather than what is owed on it, and the difference falls to you unless coverage written for it was already in place. That coverage has to exist before the loss and cannot be added afterward, which is why the decision belongs at the point of financing. A lease is governed by the lease agreement rather than by the policy.
Does insurance cover a car totaled by hail?
Comprehensive coverage responds to hail damage, including where the damage exceeds the vehicle’s value and the vehicle is written off. Collision does not respond to hail, and a liability-only policy provides no coverage for damage to your own vehicle at all. The valuation process is the same as for any other total loss.
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Send the settlement letter and the declarations page. We will tell you what the statute required to be in that payment and whether it is there, whether your policy contains an appraisal provision and what it sets out, and how the replacement vehicle should be set up so the same gap does not open again.
Disclaimer: This article is general information and is not insurance, legal, tax or financial advice, and it is not a substitute for the terms of your own agreements or policies. Cribb Insurance Group Inc does not adjust claims, does not determine coverage, and cannot direct or overrule any insurer’s claim decision. Nothing here is a representation about how a particular claim will be handled or what any vehicle is worth. Statutory provisions are summarized in substance rather than reproduced, are subject to amendment and to rules made by the Arkansas Insurance Department and the Office of Motor Vehicle, and carry conditions not fully set out here; subdivision numbering within the unfair claims practices section has been amended over time, so the section rather than a subdivision is cited. Total loss determinations, valuation methods and appraisal provisions vary by carrier and by policy form, and the policy actually issued to you controls. Coverage is set by the insurance company and is subject to the terms, conditions and exclusions of the policy actually issued to you, which controls in every case. Cribb Insurance Group Inc is an independent insurance agency licensed in Arkansas, Oklahoma, Missouri and Texas. Reviewed 2026-08-16; insurance law and carrier filings change, and this article may not describe the current position after that date. Cribb Insurance Group Inc, 1601 SW Regional Airport Blvd, Bentonville, AR 72713 · (479) 286-1066 · service@cribbinsurance.com.