A Quick Guide to Total Loss Car Insurance Claim


21 Jul 2023

A total loss car insurance claim occurs when the cost of repairing a damaged vehicle is greater than its Insured Declared Value (IDV). In this post, we provide a quick walkthrough of the total loss car insurance claim process.

Road accidents or mishaps are unavoidable. There may be a time when you get involved in an accident that damages your car beyond repairs. Your car insurance company will consider it a total loss in such circumstances.

Importance of car insurance

If your car is termed as total loss due to accident or theft, you can claim for the loss and get some reimbursement in return. For this, it is crucial that you have a comprehensive car insurance policy rather than a third-party insurance cover. The fomer policy provides financial backup to you, your vehicle as well as covers any third-party liabilities. A comprehensive car insurance provides protection for a wide range of scenarios and more importantly offers peace of mind.

When does total loss happen?

According to IRDA (Insurance Regulatory and Development Authority), a total loss of a car means the four-wheeler is damaged to the extent that the cost of repairing your vehicle is more than 75% of the Insured Declared Value (IDV). The car's IDV is the maximum amount the insurance company is liable to pay if there are severe damages to the car.

An incident can be termed as a total loss under the following scenarios:

• If your car gets stolen and it cannot be tracked

• If your car suffers damages that are more than 75% of the insurance value.

In both scenarios, one can claim the total loss due to the high repair cost. If your car suffers 100% damage, it is called a Constructive Total Loss.

Important steps to take for a total loss of car:

• You need to raise a car insurance claim request.

• You can sell the damaged parts of the vehicle to a scrap dealer, which is an environment-friendly gesture.

• To cancel your RC (Registration Certificate), you must provide insurance details, a registration certificate of the damaged car, and evidence of the vehicle being scrapped.

• If you fail to cancel the RC, the car's details can be misused or lead to fraudulent activities.

• Also, you would be required to cancel the registration certificate, which is an essential step if your car suffers a total loss.

How can you claim for a total loss of a car?

To initiate the car insurance claim process, follow the below steps:

• Inform your car insurance company

• Provide all the information required as requested by the insurance company.

• The insurance company will send a surveyor or assessor to evaluate the impact of the damages. Basis this, the insurer will assess whether to approve the car damages for repair or declare it as a total loss.

• If your insurance company declares your vehicle as a total loss, you will get an update on the car's actual cash value.

Documents required to claim for total loss car insurance claim

• Duly filled car insurance claim form

• Copy of your car insurance policy

• Copy of your driving licence

• Copy of your car's Registration Certificate (RC)

• Copy of FIR

• Surveyor's report to discover the loss

• Any additional documents as requested by the insurer

Factors that determine the actual cash value of the totalled car:

Post you raise a car insurance claim, and your vehicle is declared as a total loss; the insurance company decides the actual cash value of the vehicle on the totalled car based on the below factors:

• Make and model of the car

• Mileage of the car

• Depreciation value of the car

• Car inspection report

• Condition of the car

• Others

Final Word

Insurance companies in India settle the total loss car insurance claim by considering the car's depreciation value. This varies for different car models and brands. At any point in time, if your car suffers total loss, you need to check with your insurance provider and get detailed information about it.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.