Choose Comprehensive Car Insurance to Cover Damage beyond Repair

Posted on: Jul 29, 2022 | | Written by:

Choose Comprehensive Car Insurance to Cover Damage beyond Repair

While accidents are not unusual, with the increasing traffic, you hear of them every other day. A small dent or damage to the car is what we all can manage, sometimes with insurance and sometimes without, depending on the extent of the loss. But the main concern and the biggest fear of a car owner is when the car is damaged beyond repair. This mean there is a complete loss, and if you want your car insurance to take care of this, you will need a comprehensive car insurance policy.

A third-party liability policy is mandatory by law in India under the Motor Vehicles Act, 1988, but in situations where your car is damaged to the extent that it cannot be repaired, this insurance will not help at all, and you need a comprehensive policy. A third-party liability policy will only cover any damage caused to a third party.

Damage beyond Repair

The term damage beyond repair is used by an insurance company when the car is damaged to the extent that it is not feasible to repair it. It is also called a total loss. If the repair cost of a car is more than 75% of its cost or the present value, then the insurance company declares it as damaged beyond repair. In this case, the car is not repaired due to the high cost, the insurance company prefers to salvage it. When the car is not repaired and salvaged, and the damage beyond repair claim is taken, the insurance policy stops being in effect.

When Can You Claim Damage beyond Repair?

As stated earlier, if your car is damaged beyond repair, a third party insurance policy will be of no help. What is needed in this scenario to get a claim is comprehensive car insurance. A comprehensive policy, along with third party insurance, also has its own damage cover, which covers any damage to the car in case of accident, theft, natural calamity, fire, etc. Comprehensive car insurance will be more expensive. Still, the whole idea to take insurance coverage is to avoid any financial stress in case of any damage, and when the car is damaged to an extent, you cannot get it repaired, then getting money for it is what will ease the stress. Thus, paying the extra premium and getting adequate coverage is the best thing to do to ensure you are stress-free in case of a mishap.

Tips to Claim Damage beyond Repair

If you want to claim a total loss claim with your insurance company, the process is similar to a normal claim procedure that you follow. The insured, in this case, should ensure they have all valid documents and proof to present to the surveyor and follow all rules to ensure their claim is passed.

• File an FIR

In case of an accident that has extensively damaged the car, the first step should be to inform the police and file a First Information Report or the FIR. This helps to take the matter to court and a copy of the FIR is required to be submitted to the insurance company.

• Click Pictures and Collect Evidence

For a quick and easy settlement of an insurance claim, it is always beneficial to collect evidence and click pictures to be able to state facts. After the accident, one should always take pictures at the site itself and get all the personal and insurance details of the third party involved. This makes the job of the surveyor easy and also will expedite the claim settlement process.

• Inform the Insurance Company

It is very crucial to inform the insurance company immediately. Ideally, this should be done from the accident spot so they can offer assistance and be in the loop of events. Sometimes, informing the insurer later can cause problems in claim settlement as some information that might be needed is missing.

• Documents

Fill out the claim form with all information and details. Proper care must be taken while filling out the form to ensure all information is available. Along with the claim form, you will need the FIR, a copy of the comprehensive car insurance policy, proof of residence, a copy of the driving licence, and any other document as asked by the insurer.

• Help the Surveyor

The claim will always depend on the survey and claim report of the surveyor. Thus, it is imperative that you provide all accurate details to him for him to be able to process the claim. Care must be taken that no facts should be hidden, and neither should any fact be exaggerated. False information can lead to a rejection of the claim. If you provide support to the insurance company, there is no way the insurance company will not support you.

Process of Claim Settlement

In case you file a claim for a total loss or damaged beyond repair, the surveyor will first find out the cost of repair of the car keeping in mind the damages. Once this is done, he will calculate the deprecation of the car, which is the regular wear and tear. The depreciation rate varies from 0.05% to 0.5% of the value, depending on the car's age.

The depreciation amount is deducted from the car's original value and comes to the current cost value. If the repair cost is more than 75% of the current value, then they pass the claim of damage beyond repair under the comprehensive car insurance policy.

A comprehensive car insurance policy is an important policy as this is what covers any damage caused to the car. When the car is damaged and cannot be repaired, a total loss or damage beyond repair can be taken. This is one of the biggest claims you can take under your car insurance policy. After settling the claim, the insurance company pays the amount due to the insured, which is their discretion on how they will like to use the amount.

Besides damage beyond repair, an insured can also claim total loss in case of theft. In this case, the documents that need to be submitted are different, and the police will also need to give a non-traceable report. In both cases, the amount will be given to the insured, and nothing can be done about the car. Once this claim is passed, the car's insurance policy is cancelled as no car needs to be covered.

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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