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Automobile Insurance Claim in Total Loss: Things You Need To Know

Automobile Insurance Claim in Total Loss

Automobile accidents have been on the rise in India over the past few years. Automobile insurance helps to cover up the loss for a damaged automotive. In case your vehicle is severely damaged, you’ll be able to raise a automotive insurance claim under the overall loss category. Nevertheless, often vehicle owners don’t have adequate knowledge regarding the overall loss in a automotive insurance claim. Consequently, the insurance company offers them a lesser amount than the unique losses incurred. On this post, we discuss what’s total loss and the way to claim automotive insurance in case of total loss.

What’s Total Loss within the Field of Automobile Insurance?

When the repair and recovery cost of the automotive surpasses 75% of the Insured Declared Value (IDV) of the vehicle, it is taken into account to be total loss. Also, when the policyholder initiates a claim for serious damages or theft, the motor insurance company may declare the automotive as a complete loss.

In this case, the insurance provider compensates for the prevailing IDV of the vehicle minus the quantity of mandatory excess. The corporate suggests that the owners take their vehicles to the really useful premise. The owner also must transfer the ownership of the damaged vehicle within the name of the insurance provider. Sometimes, the insurer also asks the owner to cancel the registration of the vehicle on the RTO office.

Constructive Total Loss

A constructive loss is taken into account when the repair or substitute cost of the automotive overpowers the current market value of the vehicle. An insurance company cannot agree for retrieval on this scenario; hence, it considers this as a complete loss. For a constructive total loss, the automotive owner receives the present IDV of the automotive as reimbursement from the vehicle insurance provider.

Insured Declared Value and Total Loss

The Insured Declared Value of any automotive is calculated by deducting the valid depreciation from the ex-showroom price of the vehicle when it was insured. Firstly of every policy period, the IDV of a vehicle is calculated. This value is the quantity that an insurance company would pay the owner if the automotive can’t be repaired. This value diminishes with time.

IDV = The selling price of the vehicle by manufacturers + Total value of accessoriesDepreciation in response to the age of the vehicle

When Does Total Loss Occur in Automobile Insurance?

  • Theft: If there’s a burglary and you can not locate the automotive, the insurance company would declare this as a complete loss.
  • Damage: if the damage repair cost of the automotive surpasses greater than 75 percent of its cost, it is taken into account total loss. Nevertheless, if the damage-retrieve cost is greater than 100% of the market value of the automotive, it is named Constructive Total Loss.

What’s the Process for a Total Loss Automobile Insurance Claim?

Let’s take a have a look at the way to claim insurance for automotive damage in case of total loss:

  • At any time when your automotive is broken, intimate the insurance company immediately
  • Provide all information to the adjuster sent by the insurer
  • After evaluating the damage, the adjuster would determine whether the automotive can be sent for repair or it might be regarded as total damage
  • Once the automotive is asserted as total loss, the adjuster evaluates the actual market value of the automotive
  • The insurance company will reimburse the actual money value of the totaled automotive

Documents Required for Automobile Insurance Claim

For claiming insurance for automotive damage in case of a complete loss, you must submit the next documents:

  • Copy of RC (Registration Certificate), vehicle insurance policy, driving license, and FIR
  • Duly-filled automotive insurance claim form
  • Survey report by the adjuster
  • Approximate repair cost of the vehicle

How Many Times can Automobile Insurance be Claimed in a Yr?

There are not any limitations to the variety of claims that a automotive owner can raise to the insurance company.

Rate of Depreciation for Various Automobile Parts

Automobile Parts Rate of Depreciation
Paintwork 50%
Rubber, plastic components, batteries, airbags, nylon, and tyres 50%
Fiberglass parts 30%
Glass components No depreciation

To calculate the IDV, depreciation is estimated in response to the age of the vehicle

Age of the vehicle Rate of depreciation
Latest vehicle 5%
Below 6 months 5%
6 months to 1 yr 15%
1 yr to 2 years 20%
2 years to three years 30%
3 years to 4 years 40%
4 years to five years 50%
Above 5 years The worth is set mutually between the automotive owner and the insurer

Read More: Should File a Automobile Insurance Claim for Minor Accident or Not?

Automobile Accident Insurance Claim for the Full Value of your Automobile in Case of Total Loss

In case of a complete loss, if you ought to receive the complete cost of substitute (not the depreciated value), you must purchase Return-to-Invoice add-on insurance cover from the insurance company.

By purchasing this add-on facility, you’ll get the precise invoice value of your automotive (together with the registration expenses and all taxes). That is applicable provided that your automotive is lost or damaged severely (beyond repair). Here, you’ll receive the actual amount that you simply paid initially as automotive insurance claim charges. Note that you simply’d must purchase this add-on cover on the time of policy renewal, not after an accident/theft.

Although several firms offer various automotive insurance policy, it’s a great idea to examine the automotive insurance claim settlement ratio before choosing a plan. To receive the claim amount from the insurer, you must make a claim request by submitting all valid documents.



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