The coverage for the total loss of the vehicle will act in case of having suffered an accident and that the car is unrecoverable, being the victim of the car theft or after suffering a violent fire and that you cannot do anything to repair it. Do you want to know more about this type of coverage?

What is the total loss of the car?

Total loss is one of the coverages that you can opt for when taking out insurance for your car.

There are three cases in which your insurance company may consider a vehicle a total loss :

  1. If you have suffered a traffic accident and the repair of the car is higher than the current value of it.
  2. If you have been the victim of your car theft.
  3. If your vehicle has suffered a fire and the damage is irreparable.

It is important that you know that claims caused by Extraordinary Risks will be covered by a different entity and not by your insurer.

When is a vehicle considered a total loss?

In the three cases mentioned above, your insurance company could declare your car a total loss. However, it is important that you know certain specifications.

Normally, the insurer will consider your vehicle as a total loss when the repair of the damage after the accident or theft exceeds 75% of the current guaranteed value of the car.

However, it must be taken into account that this percentage will be determined by the insurer, so you can find companies that consider a total loss when the repair of the damage reaches 100% of the current value of the vehicle.

A total loss designation of 75% will be interesting in some cases: recent cars where in the first years the vehicle is covered at its purchase value or in case the damage suffered is serious and affects important parts of the vehicle such as the engine or chassis.

On the contrary, a 100% total claim designation will suit you in case your car is old and the damage does not affect the main mechanisms.

How much will the insurer pay you?

To calculate the compensation that the insurer will pay you when declaring your car a total loss, it will take into account different factors such as the age of the vehicle and the type of car insurance you have contracted.

Currently, insurance companies use four types of values ​​for the total loss of automobile compensation. These are:

Wrecked car
There are different types of values ​​for the compensation of your car. 
© Pixabay

Value again

This type of compensation refers to the fact that the company will cancel the value that a new car costs.

The value of the car will be that of the damaged car, with the same characteristics and taxes included.

It is important that you know that if your car had extra accessories and these are included in the policy, the insurer will include the value in the reimbursement.

When the refund is made, the company can buy the car for you. Otherwise, you can receive the money and choose it yourself.

Venal value

In this case, the company will reimburse the sale value of your car at the time of the accident.

The value of the car will correspond, in this case, to the sale price of a car of the same characteristics and age.

Factors such as the mileage traveled up to the date of the accident or the state of maintenance will not affect the market value.

It is important to remember that if you have included any accessories in the policy, these will also be part of the calculation.

Market value

The insurance company will reimburse the purchase value of the insured vehicle, immediately before the occurrence of the loss.

Replacement value

When compensating the damages through a replacement value, the insurance company will apply the purchase price of a car with the same characteristics and age as the damaged car.

As with the market value, in this case, the kilometers you have traveled or the level of maintenance of the car do not matter.

Are there other factors that influence the compensation value of the damaged car?

Indeed, there are some factors that can greatly influence the value that the company estimates for the compensation of your car.

Among them are:

Appraised value

Before calculating the amount to be reimbursed, the company will assign your car an appraised value. This calculation will be done using different assessment tools.

It is important that you check that the appraised value estimated by the insurer is in line with the real values.

Damage repair value

When calculating the compensation value of your car, it will be the insurer who will check the valuation of the vehicle’s damage.

Given this, and if you doubt the calculation of your company, you have the option of carrying out an independent expert opinion, which has a cost of approximate dollars.

Value of remains

The value of remains can considerably change the compensation of your car at the time of declaring it a total loss.

We advise you to request several quotes to obtain the best offer to present to your company.


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