How to Claim Total Benefits on Your Car Insurance Plan?
Total loss is a situation assessed by insurance companies when the repair value exceeds 75% of the IDV of the car. An insured declared value (IDV) is based on the market price of the vehicle minus depreciation. Total loss of a vehicle can also result from a theft.
The insured needs to follow the correct procedure to claim a total loss. Total loss is a complicated situation, as the insured may be disappointed for not getting the car's entire value.
The reason is that it is always stated in your car insurance terms and conditions (read carefully) that in the event of a total loss, only the declared insured value coverage can be claimed by the insured.
IDV also depends on the age of the vehicle, as the total depreciation and wear and tear of the car will be considered.
This comprehensive guide will help you understand what you need to do and how to deal with your car insurance policy if you suffer a total loss on your car.
First, you must have a comprehensive car insurance online plan to get the advantage of a total loss claim. Total loss is not covered under 3rd party liability vehicular insurance plan. This is how it's done:
- Whenever there is an accident and a claim is submitted to the insurer, there will be a proper inspection appointed to assess whether the car should be repaired (if within thin IDV amount) or should it be declared a total loss (if the amount of repair is more significant than the IDV)
- The insurer declares "total damage" if the value of damage or repair required is higher than the IDV of the car insurance online plan.
- The estimated amount of the claim depends on several factors and calculations. The formula is:
IDV = Car manufacturer's selling price+accessories' total value–depreciation based on the vehicle's age
Steps to Claim a Total Loss in Auto Insurance Online Plans
Let's see how you can apply for a claim in case of total loss in your car insurance plan:
Step 1 – If the car is stolen or if there is an accident that results in complete damage, the insured must immediately inform the insurer about it and fill out the claim form.
Step 2 – The insurer will appoint a car inspection, which can be done online by an authorised dealer or inspector.
The insured must ensure that the full and true story of the accident should be given to the assessor to make a claim valid. Any dishonest information can lead to the rejection of the claim
Step 3 - The assigned inspector will assess the damage and report the total loss to the insurer. If the estimated loss amount is more than 75% of the IDV on the vehicular insurance policy, it will be declared as total constructive loss.
Step 4 – The real market value of the car based on depreciation and auto insurance claim amount based on IDV will be assessed and paid out to the insured
Step 5 – If you have an attached rider of Return to Invoice Cover, which is an add-on that can be purchased with your comprehensive policy, the insurer pays out the total compensation for the car value in case of theft or total loss.
The payment is based on the invoice amount and not the IDV. It is therefore suggested to purchase the additional coverage to protect your car from total loss damage.
Documents Required While Claiming Total Loss
While filing the claim for total damage for a car insurance online plan, you must submit the following documents:
- You need to file an FIR and submit a copy of it along with the original policy document and the cope of your RC – registration certificate to the insurer.
- You must submit the car insurance claim form and fill in the details without any error or fraudulent information to the best of your knowledge.
- The assessment report or expert's opinion should also be attached along with the claim form.
- An approximate repair value of the car damage should be attached with another set of documents.
Rate of Depreciation on Car Parts
| Parts | Depreciation |
| Paintwork | 50% If a combined amount is applicable for painting, the depreciation is 25% of the total cost |
| Tyres, plastic, nylon, airbags, batteries, and tubes | 50% |
| Glass components | No depreciation |
| Fibreglass components | 30% |
Car Depreciation Rate Based on Age
| Age of the Vehicle | Depreciation |
| New Vehicle | 5% |
| <6 months | 5% |
| 6 months-1year | 15% |
| 1-2 years | 20% |
| 2-3 years | 30% |
| 3-4 years | 40% |
| 4-5 years | 50% |
| >5 years | 50% |
Bottom line
Total loss can be a situation that can smartly be tackled using your auto insurance online plan. Make sure you invest in a sound vehicular insurance policy that comprehensively covers a complete loss and avoids putting you in financial stress and trouble.
The insurer may not reimburse the total amount, provide a replacement, or compensate you with any amount that exceeds the IDV on your car. Still the insurance claim amount can minimize your losses and enable you to get a new car.
Read more -
Add ons for your Car Insurance
There is no limitation to the number of claims you make towards your vehicular insurance online. Still, avoid making minor claims to have your NCB remains intact and get coverage for more significant losses like a total loss claim.
Some of the total loss conditions that are covered by car insurance online plans are:
- Theft – A stolen car is considered a total loss.
- Complete Damage – If your car suffers damages over 75% of the cost in an unfortunate accident, it is considered a total loss. If the damage exceeds 100% of the market value, it is an implied total loss.
Firstly, you must report it using the correct procedure to your auto insurance company. You can sell scrap to earn something from the leftover. You must cancel your RC certificate at the nearest RTO office within the 14-day grace period to ensure the registration does not go to anyone else.
The registration certificate is a vital attestation that shows your vehicle is registered with the traffic office. In case of a total loss of your car, it is imperative to cancel the registration certificate, or else your documents can be misused by malicious people.
You will need the damaged car's registration certificate, proof that the car was scrapped, and documents with insurance details to cancel your RC.
Your insurance company will pay out the IDV of the registered vehicle in case of total loss. If you add the return to invoice add-on, your insurer will pay the total invoice price of the car.
The following factors are considered while calculating the actual value of a car's total loss in car insurance online plans:
- Depreciation value of the car
- Make and model of the car
- Year of manufacture of the car
- Inspection or verification report
- Car mileage
- Car condition
- Demand/supply of the car make and model