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A 101 On Total Loss In Car Insurance

Loss In Car Insurance


Often seen as complex, car insurance can be confused and needs to be clarified with terms like depreciation and total loss. In this article, we simplify the concept of total loss in car insurance.

Understanding Total Loss

In the intricate world of car insurance, a car is deemed a total loss if the cost to restore it to its pre-damaged condition surpasses its market value. This scenario typically arises from theft or an accident resulting in severe damage, rendering the vehicle unusable.

Constructive Total Loss in Car Insurance

Insurance providers can repair, reinstate, or replace damaged car parts or opt to compensate the policyholder in cash, ensuring liability doesn’t exceed the Insured’s Declared Value (IDV). The insurer reimburses reasonable costs for replacing lost or damaged parts in partial losses, considering depreciation. Make sure you understand how to check car insurance to ensure comprehensive coverage.

Determining Total Loss

A car qualifies as a total loss when the cost of repairs exceeds 75% of the Insured Declared Value (IDV). The IDV is the approximate market value of the car, and if the cost of repairs exceeds the current market value, it is called Constructive Total Loss.

Settlement Procedure for Total Loss Claims

If a car faces a total loss, the insured must cancel the vehicle’s Registration Certificate at the Regional Transport Office (RTO) and provide a cancellation certificate for processing the claim. After accounting for deductibles, the insurer compensates the difference between the Insured’s Declared Value and the wreck value of the damaged vehicle. *

Claim Categories: Own Damage (OD) Claim

Total loss or constructive total loss is under the Own Damage (OD) claim in car insurance, covering losses from fire, explosion, natural disasters, accidents, and total loss. This is part of the Comprehensive Motor Insurance Policy, encompassing OD and Third-party Liability in a unified package. *

Statutes Governing Total Loss

The Motor Vehicles (MV) Act, 1988, and the Central Motor Rules, 1989 are the governing statutes in India. According to Section 55 of the MV Act, if a motor vehicle is destroyed or permanently incapacitated, the owner must report it to the registering authority within fourteen days. This entails turning in the registration card to revoke the car’s registration. *

Total Loss Claim Submission

Submitting a total loss claim is easy. Use the mobile app or website, select “Claim Now,” answer damage-related questions, and upload photos. An impartial surveyor assesses the scene to determine the extent of loss and validate the claim.

Insurance Coverage for Total Loss: A Comprehensive Approach

Total loss situations are stressful, but insurance companies aim to compensate policyholders adequately. Protect against total financial loss with comprehensive car insurance, enabling claims for damages under Own Damage beyond repair. Policyholders can enhance coverage with valuable car insurance add-ons. Make sure you do the car insurance renewal  process on time.

Safeguarding Your Investment 

In conclusion, understanding the complexities of total loss in car insurance is crucial for vehicle owners. Being well-informed about the claims process, statutes, and insurance coverage helps navigate the landscape, ensuring financial protection and peace of mind during unpleasant situations.

*Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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