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What you should know about full car loss insurance claims

 

 What you should know about full car loss insurance claims

A full loss of car insurance is claimed when the vehicle has been so badly damaged, that the cost of repairing it will exceed the vehicle's declared value (IDV).

Table of contents
What you should know about car insurance claims for total loss
1. Announcement of total loss
2. How is IDV calculated for the vehicle?
3. What is the definition of constructive total loss?
4. To return to the bill add-on
Take away

Accidents are unexpected and often lead to irreversible and irreversible damage. A full loss of car insurance is claimed when the vehicle has been so badly damaged, that the cost of repairing it will exceed the vehicle's declared value (IDV).


What you should know about car insurance claims for total loss

Car insurance may seem full of a puzzling set of terms that are difficult to understand. The "total loss" in car insurance is one of those words that may be puzzling. Let's learn everything you can know about this phrase and what it means, as well as some other areas of associated car insurance.


1. Announcement of total loss

The insurance company announces a complete loss of car insurance if claims against the policy exceed 75 per cent of the vehicle's IDV. The total loss can also be claimed if the car is stolen, plus when the car has been irreparably destroyed by an accident. In the case of total loss, the compensation is equal to the real monetary value of the vehicle. This figure does not take into account the consumption of the value of the car after acquiring it.


2. How is IDV calculated for the vehicle?

The IDV of the car is calculated by subtracting consumption from the price of the vehicle's manufacturing, which includes any components and additives. The higher the life of the car, the higher the consumption rate. If the car is older than five years, IDV is agreed by both its insurance company and its insurance company. Regardless of age, other items affecting the IDV of the model car include engine capacity, current miles, pre-car market value, and more.


3. What is the definition of constructive total loss?

A complete constructive loss is claimed when the car is so badly damaged that it is wise to get a new car. This generally happens when the car has been irreparably damaged, so much so that there is practically no way to restore it to its previous state. In such circumstances, the cost of repair is much higher than the current IDV of the car. In the event of something happening to the vehicle, registration must be terminated within 14 days after the accident. The Motor Vehicles Act requires this and must be updated at the Regional Transport Office, where the vehicle was first registered.

4. To return to the invoice add-on

Returning to the invoice add-on is the final addition to enhance your car insurance policy protection. It is particularly useful in the event of a total loss because it ensures that the policyholder receives compensation for the original invoice price of the vehicle instead of the IDV, which is often lower than the invoice price. This is very useful because policyholders get the full amount instead of the lower price due to consumption and IDV. However, this type of add-on cannot be accessed using a third-party car insurance policy, which is government-imposed coverage.

Take away

Total loss is the most extreme case requiring insurance coverage. It's a difficult situation that no one wants to be in because even the insurance company seems unable to meet it. Even if you think your car can't be repaired, having insurance coverage can help you make the best financial decisions.

Read also: How do I renew my car insurance policy immediately?

Disclaimer: This article has been released in the public interest and is intended for informational purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should conduct further research or consult an expert in this regard.


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