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What is the Total Loss in Car Insurance?
total loss in car insurance refers to a situation where your vehicle is deemed irreparable or when the repair costs extend beyond the car’s current market value (IDV). This often happens in severe accidents or if the vehicle is stolen. When faced with a total loss, IndusInd General Insurance steps in to ease the financial burden. Our online claim settlement process and quick survey response makes recovering from the loss easier and hassle-free.
So, even if it is an accident or a theft, IndusInd General Insurance’s total loss insurance ensures you’re well-supported through the recovery process.
Total loss in car insurance means when your car is damaged to an point where the car is beyond repair. If the car is no longer safe to use and permanently destroyed, the car is declared as a total loss. This can happen due to two types of situations:
- Car Theft: When the car is stolen and is declared untraceable, it is considered a total loss.
- Car Accidents: If the vehicle is involved in a severe accident, leaving it irreparable or unsafe for use, it is also declared as a total loss.
- To explain this better, let us consider the following example:
Suppose you are travelling for your work and your car undergoes an electrical malfunction, causing a fire that destroys most of the vehicle’s essential components. The repair shop estimates the cost of repairs to be ₹6 lakhs, while the Insured Declared Value (IDV) of your car is ₹7 lakhs. Since the repair cost is more than 75% of the car’s IDV, it would be classified as a total loss.
What is Insured Declared Value (IDV)?
The insured declared value (IDV) is the maximum claim amount that we will pay when you claim your IndusInd car insurance in case of accidents or theft. This value is set when you buy your insurance based on the car's current market value and depreciation over time.
It is crucial in car insurance as it directly influences the premium you pay and defines the amount you get when you claim your total loss insurance. A higher IDV means better coverage but also results in a higher premium, while a lower IDV gives lower coverage at a lower premium.
How is IDV Calculated?
IDV is calculated based on your car’s market price, as listed by the manufacturer. It also accounts for the depreciated value of your car over time based on the vehicle's age. Thus, the IDV decreases with time as your car’s age increases.
Age of Vehicle | % of Depreciation for Determining IDV |
|---|---|
| Premium starting at | 5% |
More than 6 months but less than 1 year | 15% |
More than 1 year but less than 2 years | 20% |
More than 2 years but less than 3 years | 30% |
More than 3 years but less than 4 years | 40% |
More than 4 years but less than 5 years | 50% |
More than 5 years but less than 6 years | 55% |
More than 6 years | Decided mutually by the insured and the insurer |
Depreciation rate for specific car parts:
Parts | % of Depreciation |
|---|---|
For all rubber/plastic parts/nylon, tubes and tyres, airbags and batteries | 50% |
For fibreglass component | 30% |
For all parts made of glass | Nil |
For Paint Jobs | 50% (applicable only on the material cost of total painting charges) |
Thus, in case of a total loss of your car, you will get reimbursement based on the IDV and applicable depreciation rate. That is, you do not get the total cost of the car spent when purchasing it.
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Factors Affecting Insured Declared Value
Make and Model
Your IDV depends directly on your car's make and model. Luxury or high-end cars have a higher IDV than regular cars due to their higher market value and cost of repair.
Car’s Age
The IDV in car insurance governs the age of the car. For example, a new car will have a higher IDV, whereas older cars have a lower IDV due to higher depreciation, which reduces their market value over time.
Car’s Health
Your car’s health determines its market value and also affects its IDV. A well-maintained car retains more value than one with excessive wear and tear or damage.
How to Increase the Total Loss Insurance Coverage in Car Insurance?
With your regular car insurance, the claim amount you receive in case of a total loss of your vehicle depends entirely on the IDV and applicable depreciation rates. So, if you have set a lower IDV to save on premiums, the coverage will also be lower. Additionally, if your car is older, a depreciation deduction will be incurred from the payable amount. However, you can increase total loss insurance coverage by opting for respective add-on options. At IndusInd General Insurance, we offer a wide range of 10+ add-ons that cater to car owners' diverse needs. You can opt for our Return-to-Invoice or Total Cover add-ons to enhance your car insurance coverage.
Return-to-Invoice Cover
Our RTI cover reimburses the car’s invoice price, i.e. the original amount spent while purchasing the car, in case of a total loss. We also cover the cost of first time registration, road tax and applicable insurance cost of your car.
Total Cover
With our total cover add-on, you will receive compensation based on the full on-road price of your car in case of a total loss. This includes the registration fee, Octroi, any government-issued charges and insurance premium on a pro-rata basis.
How to Claim Total Loss/Constructive Total Loss with IndusInd General Insurance?
Step 1: File your total loss claim with us within 24 hours using any one of the following methods:
- Call our paid helpline number +91-22-48903009
- Go to our Car Insurance Claim page
- Log in to your IndusInd Self-i App
Step 2: Obtain a stamped copy of the FIR and non-traceable report from the nearest police station if your car has been stolen.
Step 3: In case of severe damage, our claim expert will inspect the extent of damage to your car.
Step 4: Receive a report from the surveyor confirming that your car is declared a "total loss" and cannot be used. Also, get a proof of RC cancellation from the RTO.
Step 5: Submit the completed claim form and required documents to us. Once approved, you will receive the compensation based on your IDV or the total invoice price of your car (if you have opted for the RTI or total cover add-on).
Documents Required to File a Claim for Total Loss Insurance with IndusInd General Insurance
Copy of your car’s RC
Copy of the driver’s driving licence
Surveyor's report
Copy of your car insurance policy
Copy of FIR (in case of theft)
Estimate from the repairer
Claim form (filled and signed)
No trace certificate (in case of theft)
What is Constructive Total Loss in Car Insurance?
CTL, or Constructive Total Loss in car insurance, is when the damage to your car is extensively high, which is higher than its market price. We declare your vehicle as CTL when there is a minimal chance of restoring your vehicle, and it exceeds 75% of the IDV. In such a case, it is more economical to buy a new car than to restore the damaged vehicle.
You can claim your IndusInd car insurance in case of a constructive total loss in the same way as mentioned above. We process the claim based on your policy coverage and your car’s IDV and depreciation.
Additionally, if your car is a total wreck, you need to cancel your RC and submit it to us while processing the claim.
Rules About Total Loss in Car Insurance
In case of a total loss, you have an additional responsibility other than filing a claim. According to section 55 of the Motor Vehicle Act of 1988, if your vehicle is declared as a total loss and cannot be repaired or used, the owner must inform their city’s RTO within 14 days of the incident. The RTO then cancels your car’s registration and provides you with proof of cancellation of the Certificate of Registration. This document is mandatory when submitting your claim with us. The government of India has imposed this rule to prevent false claims and scrapping of stolen vehicles.
Total Loss vs Constructive Total Loss
Parameters | Total Loss | Constructive Total Loss (CTL) |
|---|---|---|
Definition | Occurs when the vehicle is damaged beyond repair or is completely destroyed. | Occurs when the cost of repair exceeds 75% of the Insured Declared Value (IDV). |
Condition | The vehicle is deemed irreparable or unsafe to restore. | The vehicle can be repaired, but the cost of repairs is very high. |
Example | A car that is completely burned in a fire. | A car heavily damaged in an accident where repair costs exceed 75% of the IDV. |
Claim Process | Direct compensation for the total value of the vehicle based on the policy coverage. | The vehicle is not repaired; you receive compensation based on IDV or based on chosen add-on. |
In both cases, the compensation for the vehicle’s total loss is based on its IDV, but the key difference lies in the extent of damage and the cost of repairs.
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Disclaimer:*T&C Apply. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale.>The total no. of customers insured data is for FY24 and has been picked up from the number of lives insured for Health, Personal Accident, Overseas Travel, Domestic Travel, Workmen Compensation and Crop Insurance, Weather LOB & Fire LOB provided by IRDAI count that is master policy count. Other than these LOBs, we have also provided data for the number of certificates issued. The premium mentioned for car Insurance excludes taxes for the private car model Maruti Suzuki Alto 800 with a cubic capacity of less than 1000 cc for a 1-year Own Damage Insurance policy for an IDV of ₹2,34,728. The premium used is 2,853/year as of 1 March 2023 and then converted into a per-month basis, which gives us ₹238/month (2,853/12).The discount varies basis vehicle specifications, No Claim Bonus discount and Geographical location of the vehicle to be insured. Discounts have been calculated on the basis of the rates prescribed under erstwhile Indian Motor Tariff. Discounts are applicable only to the Own Damage section and discounts may vary as per the vehicle make, model, RTO, age of the vehicle and addition of add-ons like InduInd Limit Sure-Pay As You Drive.
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