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Total Loss in Car Insurance
Feb 18, 2023

In Car Insurance Terms, What Does a Total Loss Mean?

With rapid urbanisation, there is also an increase in the number of cars you can see on the roads. This increase burdens the road infrastructure, leading to traffic and congestion. Further, it also increases the chances of road accidents. If your car gets damaged, the repair work can be expensive. Getting insurance for your car can help you cover the cost of damages to your car. However, what if your car gets damaged beyond repair? In technical terms, what if it suffered a total loss? Given below is more information about what it means and how you are compensated for it.

What is car insurance?

Car insurance is designed to financially protect you and your car from any financial and legal liabilities related to road accidents. There are three types of insurance for cars: Third-party plans, Own-damage plans and Comprehensive plans. Third-party policies cover only the damages caused to third-party vehicles, property, or individuals. Own damage covers only damages caused to your vehicle. And, comprehensive policy covers both third-party and own damage in the same policy*.

What is a total loss?

Consider this example: You are driving your car towards your destination, but it suddenly breaks down in the middle of the road. You try to check for the issue, but your car ignites in flames due to some electrical malfunction. Such a fire damages the car and is rendered useless. This is a situation of a total loss of the car. In technical terms, a car is declared as a total loss when the estimated cost of repairs for the damage is more than the value of the car. For example, if the value of your car is Rs.3.5 Lakhs and the cost of repairs for your car comes to 5 Lakhs, the car is declared to be a total loss.

How is total loss calculated?

Total loss is determined based on the IDV of your car. IDV stands for insured declared value. When you check car insurance online before buying, one of the things your insurer will do is check the market of your car. As your car ages, its value keeps depreciating. For a brand-new car, the depreciation value is 5% right after it taken out of the showroom . The IDV of your car is calculated at each policy. * As per the Insurance Regulatory and Development Authority of India (IRDAI), if the cost of getting damages repaired exceeds 75% of the car’s IDV, it is declared as a total loss. In the example mentioned above, as the cost of repairs was exceeding the IDV of the car, the car is declared as a total loss. Common situations when the insurer declares your car as a total loss is when the car is damaged in an accident, due to man-made/natural calamity, or gets stolen. You can visit the official website of IRDAI for further details.  *Standard T&C apply

How is IDV calculated?

Age of the vehicle Depreciation rate which is applicable
Below 6 months 5%
6 months-1 year 15%
1 year-2 years 20%
2 years-3 years 30%
3 years-4 years 40%
4 years-5 years 50%
After 5 years, the IDV of your car is mutually decided between the policyholder and the insurer.

How to file a claim for a total loss?

The following are the steps for filing a claim for total loss of your car:
  1. Inform your insurer about the accident/theft through their claim helpline number. Alternatively, you can visit the claims section on their website as well.
  2. On the website, submit the form with all the required details pertaining to your car and the policy document.
  3. The insurer will send a surveyor to assess the damages based on the claim.
  4. Your car would be taken to a network garage for evaluation.
  5. If the damages are beyond repair, or the cost of repairs exceeds 75% of your car’s IDV, the insurer might declare it as a total loss
  6. The insurer will compensate you as per the current market value of your vehicle.

Things to keep in mind

  1. If you wish to claim the complete value of your car and not the depreciated value, make sure to purchase the return-to-invoice add-on in your comprehensive car insurance policy.
  2. File the claim for a total loss within 14 days of the accident having taken place.
*Standard T&C apply


If your car suffers damages beyond repair and is declared as a total loss, this is how you can claim compensation for it. Use the car insurance premium calculator to check the price for your car insurance and then select a suitable cover.   Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.  

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