All You Need To Know About Total Loss Car Insurance Claim Process

Posted on: Feb 7, 2022 | | Written by:

All You Need To Know About Total Loss Car Insurance Claim Process

Published on February 7, 2022. EST READ TIME: 3 minutes

While third-party car insurance takes care of your legal liabilities towards another person or property in case of an accident, a comprehensive policy protects your own vehicle against unforeseen or unexpected situations like natural or manmade calamities, accidents and thefts. Basically, it has a third-party component as well as an own damage cover. And in order to honour your claims or provide compensation, this policy comes with a notional value of your car, known as its Insured Declared Value or IDV.

For a new car, the IDV is based on the invoice value of the car, though as time passes, depreciation is deducted from it. Since no two people use and maintain their cars in the same manner, insurance companies allow you to choose your own IDV and charge the premium according to that. If you file a claim on your policy, the maximum amount the company will pay is based on the IDV of the car mentioned in the policy.

Identification of case of total loss

A total loss can only be calculated in case of a comprehensive car insurance policy and not if you simply hold MVA mandated third-party liability cover. As said earlier, the IDV of an insurance policy is the upper limit up to which the insurance company can pay you for repairs. Now, a total loss case comes under one of the following two situations:

• If your car gets stolen: This is a sorry but straightforward situation. Car theft is a very common crime in India. The sheer size of the country as well as the number of crimes means that in many cases the police simply fail to trace the car. If the police are unable to find the car after a set timeline, the insurance company considers it to be a case of total loss.

• If your car suffers too much damage in an accident or a natural or manmade calamity: Let us say that your car gets damaged in an accident, natural calamity or manmade calamity, to an extreme extent. Such natural calamity may involve an earthquake, landslide, flood etc. and manmade calamity may involve riots, strikes or attempted burglaries. If the repair cost of the car is calculated by the garage to be higher than the IDV of the car, the case is considered as a total loss.

Calculating the total loss case: There are many factors that go into the calculation of total loss value of the car:

• The make and model and ex-showroom price of the car, which can be used to determine its base value

• The cubic capacity of the engine of the car

• The number of kilometres the car has run and the expected remaining service mileage

• The number of years that have gone by since the car was first registered

• Name under which the car is registered and whether it is an individual or company

• The condition of the car when the said loss/damage occurred

Process flow if you need to make a total loss claim

You need to follow a very simple process in case of total loss. In general, the following steps help:

• Immediately notify the car insurance company after the car theft/accident/calamity loss.

• Collect repair cost estimate from a garage, preferably a network garage.

• The insurance company will send an adjustor who will assess the loss. Get the car surveyed and collect assessment report with total loss report.

• If the car gets stolen, file a FIR with the police and collect no trace certificate.

• File the total loss claim with all the paperwork and wait for the claim amount to come to your account.

Paperwork needed for the total loss process

If your car is declared a total loss, you will need to submit a few documents to get the ball rolling. While different insurance companies may have different paperwork requirements, the following are a must-have:

• Valid registration certificate of the car

• Copy of the car insurance policy that mentions the IDV of the car

• Valid driver license of the person driving in accidental loss cases

• Estimate of the repair cost issued by the garage (preferably a network garage)

• Report of authorised surveyor detailing reason and quantum of the loss

• No trace certificate in case of car theft

No one wants to end up losing their car completely. You surely have a lot of memories associated with your car too. Hence, a total loss can be a big blow to these memorable moments. So, find out if your car can be salvaged in some way or the other before you consider it as a total loss.

Remember that if one garage reports that your car will be a total loss, does not mean all other garages will also feel the same. You should keep on exploring till you have exhausted all options. If everything fails, then of course, you will need to contact your insurance company and do the needful to receive your due compensation.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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