When you own a car, purchasing a car insurance policy for your vehicle is one of the best things you can do. With a car insurance plan, your car is protected from unexpected issues like accidental damages, theft, etc. Furthermore, if your car gets damaged, your car insurance plan will provide you with the financial support to deal with the damage repair costs.
Many insurers like Tata AIG offer car insurance online to help customers purchase the plan with ease. You can compare car insurance plans to make an informed decision. When you’ve bought a suitable four-wheeler insurance plan for your vehicle, you will not have to worry about the costs associated with dealing with the damages regardless of whether the damage was small or it was a total loss.
What is the Total Loss of a Car?
When the calculated cost of fixing a damaged four-wheeler is higher than 75% of the car’s Insured Declared Value (IDV), it will be termed a total loss of the car. A four-wheeler will be labelled as a case of total loss by the insurance company after the policyholder raises a claim for severe damages or theft of the vehicle.
If the estimated cost of fixing or replacing the insured car exceeds its actual market value, it is called a ‘constructive total loss’. When a motor insurance company declares a car as a total loss, the car is referred to as a totalled car.
If your car is declared constructive, you will be provided with the pre-fixed amount of the vehicle’s IDV. However, since the car’s IDV keeps decreasing over the years, your claim amount will be reduced. You can rely on the ‘return to invoice’ add-on coverage for these situations.
The return to invoice add-on can be quite beneficial as it helps you get the car’s total price as mentioned in the invoice at the time of purchase and not the IDV. If you include this add-on when you buy car insurance, you will get an adequate amount of compensation for your vehicle.
Once your vehicle has been declared a total loss, you will have to visit the RTO or contact them within 14 days. Here, you will have to provide the registration card to get the vehicle’s registration cancelled.
The total loss of a car will happen in the following two situations:
- Theft: If your car gets stolen and can’t be located by the officials, it will be termed as a total loss.
- Extreme damages: If your car’s damage repair cost is almost similar to the car’s cost.
How Do Insurers Calculate the Total Loss Amount of the Car?
An insurance company calculates the total loss value of a car after you initiate a claim. Once the claim is initiated, your insurer will send a professional surveyor to analyse the damages to your car. The surveyor will look through the different parts of the vehicle and estimate the amount that will be needed for repairing the car.
If the repairing cost of the damaged four-wheeler goes higher than its market value, the surveyor will declare the claim as a total loss claim. To calculate the actual cash value of the damaged car, the insurance company uses several factors. Some of the factors that the insurer uses are:
- Inspection reports regarding the damages to the car
- Car’s depreciation value
- Make and model of the car
- Car’s manufacturing year
- Car’s mileage
- The supply and demand for the car in the market
Once the agent has given the information about the total loss situation to the insurer, you can initiate the claim process for a total loss claim.
Steps for Filing Total Loss Car Insurance Claim
To file a total loss claim of your car, you must follow these steps:
- First, inform your insurer as soon as possible. Any delays in informing the insurance company may lead to a delay in the claim settlement or rejection of your claim.
- You must provide all the necessary information to the surveyor that your insurer has sent to evaluate the car’s damages.
- The agent will calculate the damages to the car. Then, based on their calculations, they will either suggest a repair or declare it as a total loss.
- When the car has been declared a total loss, the adjuster will calculate the actual cash value of the damaged car.
- After the car’s actual cash value has been calculated, your insurance company will provide you with the amount for the total loss of your car.
The claim settlement usually takes around a month. To ensure your claim process for the total loss of your car goes smoothly, you must provide the correct set of documents.
Documents Needed for Raising a Total Loss Car Insurance Claim
Given below are some of the documents that you will need while filing a total loss car insurance claim:
- A copy of your car’s RC (Registration Certificate)
- The surveyor’s report will highlight the cause of the loss
- Your car insurance policy’s copy
- Car insurance claim form duly filled and signed
- The vehicle repair cost estimation
- A copy of your driving license
- A copy of the FIR
A total loss in car insurance is when your car is if your car gets stolen or if it is damaged beyond repair. The damage repair cost should be higher than 75% of the car’s IDV for the car to be declared as a total loss. To get the claim settlement for a total loss, you must inform your insurer, follow a few simple steps and provide all the necessary documents. Following the steps carefully will ensure you get the correct amount for your car’s total loss.