In this article, we go over total loss events and what it means for your insurance policy if you ever find yourself in this unfortunate situation.
This article will go over the things you need to know about total loss events, including its classification, vehicle valuations and the proper steps to take should you find yourself dealing with this calamity.
If you get into a severe accident and the insurance company declares that the cost to repair the vehicle is more than the market value of the vehicle, it’ll be considered a total loss.
A total loss will occur when the amount to repair the vehicle or fix it back to its condition before the accident is more than the actual cash or market value of the vehicle at the time of the loss.
Some insurance companies will deem your vehicle a total loss if the repair costs exceed a particular percentage of its market value. It’s important to understand your insurance company’s definition of a total loss should you find yourself having to navigate the situation.
The insurer will consider how much you paid for your vehicle, how long you’ve owned it, its condition, how well it was performing before the accident occurred, its repair and maintenance history, and how many miles or kilometres it has seen.
Keeping a record of recent vehicle inspections will always be beneficial to the adjustment process. Usually, the amount your insurer will pay for the damaged vehicle’s loss is negotiated upfront, though each insurance company will handle total loss events differently.
If you find yourself dealing with a total loss, the vehicle will rarely be worth a flat $0. Parts can still be sold or salvaged, and auto bodies can be sold as scrap.
Your first priority in any serious collision is the safety of all those involved. If you can move safely, try to get your vehicle out of the road, away from oncoming traffic, turn your hazard lights on and take photos to aid any investigation.
Immediately report the accident and location to police. As you wait for help, record details such as time and date, get witness statements, make and models of the vehicles involved. Always exchange contact and insurance information of all drivers involved.
While the police are conducting their investigation, call your insurance company and follow their instructions.