09/06/2023

Total loss = Total loss

Your car is barely 2 years old, you are still paying the five year loan you took out, and you have suffered an accident from which, fortunately, you escape unharmed. However, your car has been declared a Total Loss (or “Totalled”). You don’t have a car to drive… what happens now?

When an Insurer declares a vehicle as total loss, it means that the Insurer will not be responsible for the costs of repairing or replacing the components and will “compensate” you with the amount previously agreed in your car policy so that you can obtain another vehicle…

When is a car total loss declared?

  • Accident in which the cost of repairing the car exceeds 75-100% of its market value. Each insurer considers a certain %.
  • The vehicle has been completely burned to the ground due to an unintentional fire.
  • Your car has been stolen.

Insurers and Total Loss: what is applicable?

There are hundreds of products on the market with different policies dealing with compensation for a total loss. “Replacement Value” or “Market Value”, “Improved Market Value” and others that introduce a time period if the vehicle is 2 years old for 100% of new value, other insurers only consider 1 year maximum to give you 100%, others provide an improved market value, others do not consider the improvement… there are too many combinations that impact YOUR compensation.

The same car: it depends on where it is insured and how. Your compensation can vary on an order of magnitude of thousands of euros. Do you know what you are buying when you take out insurance?