Explained: What Is ‘Total Loss’ In Car Insurance And How To Tackle It

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The heavy rain flooded several South Bangalore neighbourhoods a few monsoons ago. Unfortunately, the Hyundai i20 that Rajesh Sharma had parked in a public area became utterly submerged. The car was practically dead the following day when the water started to recede.

A car that cannot be repaired or would cost more than the insured value is referred to as a “total loss” in the insurance industry. A total loss is declared when the cost of repairs exceeds 75% of the insured declared value, or IDV, of the vehicle. Claims are subject to terms and conditions set forth under the motor insurance policy.

However, if you’re an unfortunate victim like Kumar in this scenario, your insurance policy might be able to help you at least partially cover the loss.

First, consider these two crucial actions:

  • Contact Insurance Provider: If floodwaters harm your vehicle, contact the car insurance online provider immediately. The insurer will guide you through the necessary steps, starting with safely towing the car to an authorised network garage, based on the information you should provide them.
  • Describe The Damage: When filing a claim, the customer must give the insurer all the information about the incident. The insurance company will probably request pictures, videos, and other proof to support the claim. Claims are subject to terms and conditions set forth under the motor insurance policy. *

What Transpires Then If The Car Is Irreparably Damaged?

The car insurance online provider may make a payment for the loss after assessing the extent of the vehicle’s damage. The insurance company may pay for the repairs if the damage can be fixed. Now, what next? The insured party may be entitled to compensation in the amount of the IDV when the insurance surveyor determines that the vehicle is beyond economical repair. This could be paying the customer the claim amount by the IDV taken in the policy or giving the insured the option of taking an alternate vehicle through the insurer within the same price range.

IDV Explained

The maximum amount insured that an insurance provider may offer in the event of a total loss or theft of a vehicle is known as the Insured Declared Value or IDV. A car’s IDV decreases over time as a result of depreciation. Because the car insurance claim amount is based on the vehicle’s current IDV, it may be less in the event of a total loss for the policyholder. Claims are subject to terms and conditions set forth under the motor insurance policy.

The Optional Add-Ons

Policyholders may benefit from the “return to invoice” (RTI) add-on in total loss.  Claims are subject to terms and conditions set forth under the motor insurance policy.*

This add-on compensates the policyholder for the car’s total price, as mentioned in the invoice at the time of purchase and not IDV. It’s important to note that the RTI cover is only available up until the third year of your car’s age. You must pay 15–20% more premiums than regular car insurance. Claims are subject to terms and conditions set forth under the motor insurance policy.

As a result, it is advised to purchase a comprehensive motor insurance policy with the necessary add-ons to offer adequate protection against circumstances similar to flooding. Car insurance renewal is an annual task that all vehicle owners should prioritise to maintain continuous coverage and compliance with the law. Car insurance renewal is an annual task that all vehicle owners should prioritise to maintain continuous coverage and compliance with the law. Claims are subject to terms and conditions set forth under the motor insurance policy. *

* 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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