All You Should Know About Total Loss in Car Insurance

A total loss is when your vehicle is damaged beyond repair after an accident or is stolen. If you file a claim under ‘total loss’, we send a surveyor to assess whether the damages meet the criteria for approval. 

Section 55 of the Motor Vehicles Act, 1988, governs the total loss clause in any car insurance plan. According to this rule, the vehicle owner must report the damage to the concerned authority within 14 days if the car is deemed permanently unusable. 

In simple terms, you must report the incident to the local RTO and submit your vehicle's Registration Card within 14 days to claim total loss insurance.

CTL, or Constructive Total Loss in car insurance, is when the car repair costs exceed 75% of the Insured Declared Value (IDV). In such a situation, the motor insurer will reimburse the vehicle owner the car’s IDV after adjusting deductibles and seize the damaged car. 

The IDV is the maximum amount agreed upon by the insurer to be paid to the policyholder in case of a total loss. It primarily depends on the vehicle's age and make/model.

To better explain this, let’s make use of an example. Suppose 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 exceeds 75% of the car’s IDV, it would be classified as a constructive total loss.

For partial losses, your insurer will pay for the actual repair costs or a reasonable amount, subject to depreciation and the limits specified. Here, you may opt for our Zero Depreciation add-on to secure the full replacement costs of any damaged metal, fibre, and rubber parts of your vehicle post-accident.