Total Loss Car Insurance-Things You Should Know

Getting knowledge about car insurance claims might be a little bit hard if you are not familiar with the numerous jargon related to them.  ‘Total lost’ is among such expressions. When there is an automobile collision, this might condemn the vehicle, resulting in increased repair expenditures that may potentially outrank the vehicle’s present market worth. A complete loss is deemed by the insurance company in a situation like that. However, while reading further, we will explain things for you to know on total loss car insurance and how to file a claim for it.

What if you have insurance and your car insurance claim is totally damaged?

What is total loss car insurance?

A total loss of car insurance of a vehicle is claimed when the cost of vehicle repair exceeds 75 percent of the insured declared value. In cases like fire accidents or theft, which renders the car inoperable, the vehicle will be deemed a total loss. When the cost to fix the car exceeds the vehicle’s present market worth, it is said to be a constructive complete loss.

How do insurance companies calculate a total loss value?

After a claim is filed, insurance companies will estimate the overall lost value of your car.  Before then, the insurance company will send a surveyor to analyze and inspect the damage to your vehicle. After a successful inspection, an approximate estimate will be created based on the surveyor’s analysis. It is estimated to be greater than the car’s current market worth, and a complete loss will be declared.

How is total loss determined?

A total loss is determined only when the repair cost exceeds 75% of the insured stated value is a car is deemed to complete loss.

The insured stated value is known as the overall market value of the car. However, when the cost of fixing the car exceeds 100% of the insured stated value, the car is said to be in a constructive complete loss.

IDV is calculated based on the following

AGE OF THE VEHICLE        DEPRECIATION (REDUCTION IN COST) RATE FOR CALCULATION IDV

  • Below 6 months      5%
  • 6 months to 1 year    15%
  • 1 year to 2 years  20%
  • 2 years to 3 years   30%
  • 3 years to 4 years    40%
  • 4 years to 5 years    50%
  • Above 5 years      make decision between vehicle owners and insurer

What is the procedure for filing a complete loss car insurance claim?

  1. You will complete the following procedure to file a claim for total loss or complete vehicle loss.
  2. You are to quickly notify your insurance carrier as soon as your car is damaged.
  3. Distribute the necessary info and documentation
  4. You can file an FIR if necessary
  5. The insurance providers will send surveyors to inspect the damage to the car.
  6. The surveyor will now determine if the car can be regenerated or if it falls under complete loss compensation.
  7. If the vehicle falls under complete loss, you will be informed how much the vehicle will be worth.
  8. After that, a cash value will be given to you by the insurance providers

Documents needed to file a complete loss auto insurance claim

To file a complete claim, the papers needed to make total loss vehicle insurance claim are listed below:

  • A duplicate of the vehicle registration certificate
  • A copy of the car’s insurance policy
  • Survey report
  • The estimated car repair cost
  • A photocopy of your vehicle’s driving license
  • A completed and signed car insurance claim form
  • A photocopy of the FIR or  a filed panchnama

In the event of a complete loss, how is the real worth of the vehicle determined?

  • The car mark and model
  • The car’s depreciation value
  • The car inspection report
  • The manufacturing year of the car
  • The car mileage
  • Current vehicle make and model demand and supply
  • The car’s condition

READ ALSO: psychological problems for health insurance psychiatric cover

Total loss is a circumstance that necessitates insurance coverage, that is the reason why the automobile must be insured. When the vehicle owner fails to insure the vehicle with comprehensive auto coverage, it might lead to financial difficulties for him/her.

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