While filing a basic motorcycle accident claim can be unpleasant enough, having to file a claim when you total your motorcycle can be even more of a nightmare. 

That is why it is important for riders to take the time to fully understand their motorcycle insurance policy in terms of how it applies to a total loss.

Make sure you know exactly what expenses the provider is responsible for paying in the event you total your bike. 

It is better to know this in advance rather than trying to figure it out in the aftermath of your motorcycle getting totaled.

Educating yourself on how total loss insurance claims work can help guarantee that you are fully compensated in the event of a serious motorcycle accident.

Total loss insurance is only applied in the event that a motorcycle is totaled in an accident. 

When a motorcycle suffers considerable damage from an accident, insurance companies will typically send an adjuster to evaluate the damage. 

If the adjuster determines that the bike is so badly damaged that the cost to repair the vehicle is higher than the value of the bike itself, then it is considered a “total loss.” 

The adjuster would then be responsible for determining the reimbursement amount for the bike owner.

When it comes to determining when a motorcycle is totaled, not all states use the same criteria. 

Some states use something called Total Loss Formula (TLF) in which a motorcycle is deemed totaled if the repair cost plus the salvage value is higher than the actual cash value of the bike. 

Other states use what is called Total Loss Threshold (TLT), which means the cost to repair the damage to a motorcycle must be higher than a set percentage of the bike’s value in order for that bike to be considered totaled.

Once a motorcycle is classified as a total loss, the owner/policyholder can then proceed to file a total loss motorcycle insurance claim with their provider. 

That provider would then eventually pay out the fair market value to the policyholder. 

It is important to make sure that you receive the full value of the motorcycle by ensuring the provider pays all applicable taxes and fees.

When initially setting up your motorcycle insurance policy, you may have the option to insure your bike for a stated value or for an actual cash value. 

When you choose a “stated” value, the policy covers the bike for a certain set amount. 

When you opt for an actual cash value policy, the potential total loss reimbursement amount of the bike can vary depending on market conditions.

When you file a total loss claim for a motorcycle, your insurance provider will either pay out the bike’s fair market value or the actual cash value. 

Whichever amount is paid out, it will not be the same as the price for which you originally purchased the bike.

It is a good idea for the bike owner to do some research to find out what a bike similar to theirs (year, make, model, mileage, etc.) would sell for in the open market. 

Having this information will be very helpful when the insurance company offers a reimbursement amount for your total loss claim. 

If that amount is close to the sale amount you found in your research, then it would make sense to accept the offer. 

However, if you think the provider is offering you a lowball amount, then you may be able to negotiate to get close to the actual cash value of the bike. 

Most likely, you’ll meet somewhere in the middle in terms of the amount you get from the insurance provider.

If the bike is relatively new and being financed, it may be the case that the amount paid out by the carrier won’t be enough to cover the remainder of the loan. 

In this case, where the actual cash value is less than the balance owed on the loan, the owner could still potentially owe money on the loan for their totaled bike.

It is strongly recommended that you file your total loss claim as soon as possible after the accident. 

In some states, you are required to file a total loss claim within 30 days after the motorcycle is totaled in an accident. 

It can take a long time for a total loss claim to get processed, so the sooner you start the claim, the faster you will be reimbursed.

The actual cash value is basically just the replacement cost with depreciation factored in. 

Typically, the actual cash value is based on the fair market value of the bike, which is essentially the amount that someone would pay  for your bike in good condition.

There are several factors to consider when determining a bike’s actual cash value such as the bike’s mileage, maintenance history, and current availability of that bike in the open market.

There are two main sources for determining a motorcycle’s actual cash value: National Automobile Dealers Association (NADA) and Kelly Blue Book (KBB). 

Not all insurance companies will accept KBB valuations, so bike owners are encouraged to ask their insurance company whether or not they accept ACV calculations from KBB.

In most states, when it comes to total loss claims, insurance providers are required to pay out the value of the bike itself plus any associated costs such as vehicle registration, sales tax, and other miscellaneous fees. 

Even if you live in a state where insurance carriers are not required to pay those additional fees, you may still be able to file a legal claim to get your insurance provider to cover the cost of those fees.

During the total loss claim process, you should hang on to all relevant documents such as paperwork from auto repair shops, doctor visits, and communications between yourself and your insurance provider. 

Keep all of these records organized and readily available. 

It is worth the extra effort to digitize these documents, so that you can easily send paperwork in a timely manner when needed.