When is a car declared a total loss by the insurance company?
Are you involved in an accident and your car is declared totaled? This means that your car is damaged beyond repair. You can no longer use your car or the repair is more expensive than the current value of the car. What your car insurance pays in such a case depends on the type of coverage.
A car can be declared total loss in two ways:
Technical total loss
Technical total loss means that the car is so badly damaged that it cannot be repaired. Also, when a car is stolen, it can be referred to as technical total loss.
Economic total loss
If a car is declared economically totaled, the repair costs exceed the value of the car. This is determined on the basis of the daily value (before the accident) and the residual value (after the accident) of the car.
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What is my daily value of the car if it is totaled?
The current market value of the car is important when your car is declared technically totaled. Then you are entitled to the current market value. If your car is economically totaled, you are entitled to the current market value minus the residual value.
Suppose your car has a current market value of €5,000 and its residual value is €1,000. If the repair costs exceed €4,000 (current value €5,000 - residual value €1,000), then your car is declared economically totaled.
You may then keep the car, provided it is repairable. Your car insurance will then pay you the current market value minus the residual value.
How do I calculate the daily value of a car that has been totaled?
Usually, the daily value of a car that has been totaled is calculated by a claims adjuster. Do you disagree with the current market value? Then discuss this with the claims expert first and also ask for an explanation and substantiation of the expert's report.
Your car insurance coverage
Third-party liability (mandatory)
- Free recovery service
- Damage to others
- Theft, joyriding and loss
- Windscreen damage
- Damage by fire or natural disaster
- Own damage caused by a collision
Limited airframe
- Free recovery service
- Damage to others
- Theft, joyriding and loss
- Windscreen damage
- Damage by fire or natural disaster
- Own damage caused by a collision
All Risk (WA+Casco)
- Free recovery service
- Damage to others
- Theft, joyriding and loss
- Windscreen damage
- Damage by fire or natural disaster
- Own damage caused by a collision
Which form of cover pays out if a car is totaled?
The three standard forms of car insurance are:
Third-party insurance
When buying a car, you should immediately take out at least third-party insurance. Damages caused to others are compensated with this coverage. For cars of 10 years or older, many people choose only the compulsory third-party insurance. However, this insurance does not cover damage to your own car. If the accident was your fault, you will not get compensation for the damage to your own car. If someone else caused the accident, you can recover the damage from the other party.
WA limited casco
A good alternative with broader coverage is the third-party limited collision insurance. This coverage compensates not only damages to others. Damages caused by a collision with stray animals, hail and storm, lightning, fire and explosion, window breakage, theft and attempted theft are also covered by the limited hull insurance. Owners of cars between 6 and 10 years old often choose this coverage. Is your car total loss due to (one of) the above causes, then a WA limited hull car insurance will generally compensate this damage. Is the accident caused by you, this coverage does not compensate the damage.
All-risk car insurance
Owners of new cars up to about 6 years old often choose the most comprehensive coverage, which is all-risk insurance. With this all-risk coverage, damage to your own car due to collisions is also compensated by your own insurer. In addition, vandalism damage is also insured with all-risk coverage. The all-risk insurance compensates when the accident is caused by your fault and when someone else caused the accident. If you total your car while under the influence of alcohol or drugs, this is not covered.
Related pages about car damage
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