Insurance is like a spare tyre. You may not require it, but not having one is not an option.

Car Insurance Claim Settlement In Case of Total Loss

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A lot of times, people find themselves in a complicated situation when their vehicle is seriously damaged or destroyed. The real challenge is when the sum assured by an insurance company is lesser than the actual losses incurred. This is because the insurance company never provides coverage only to the extent of the Insured Declared Value of the vehicle. To understand the concept better, let’s understand when a vehicle is considered to be in a state of total loss.

Total Loss:

In case of a total loss of a vehicle, the overall cost of repair and retrieval of the vehicle exceeds 75% of the Insured Declared Value (IDV) of the vehicle. In such a case, the insurance company reimburses the current IDV of the vehicle minus the amount of compulsory excess. The vehicle owner needs to shift the vehicle salvage to the insurer’s suggested premise and transfer the ownership of the damaged vehicle to the insurer. The insurance company may also direct the insured to get the registration of the vehicle cancelled from the RTO.

Constructive Total Loss:

In case of a constructive total loss of the vehicle, the total cost of retrieval of the vehicle exceeds its current market value. In such cases, it is practically not feasible for the insurance company to go for the retrieval and they treat the claim as a total loss. The policyholder in case of a constructive total loss gets the current IDV of the vehicle as reimbursement from the insurance company.

Insured Declared Value And Total Loss:

The Insured Declared Value of any vehicle is determined by subtracting the applicable depreciation from the ex-showroom price of the vehicle at the time it was insured. The IDV of a vehicle is determined at the beginning of each policy period.

Calculation of IDV:

Insured Declared Value (IDV) = Manufacturer's listed selling price of the vehicle + Total value of accessories – Depreciation applicable based on age of the vehicle

The manufacturer’s listed selling price includes the original cost of the vehicle + state taxes + duties/ cess, and other taxes. However, it does not include the cost of vehicle registration. For example, if two years ago a car was purchased for Rs.5 lakh and the cost for the same car is now raised to Rs.5,20,000, the IDV will be computed based on depreciation applicable on the current value, i.e. Rs. 5,20,000. On the other hand, if the price of the same car is now reduced by Rs.20,000, the IDV will be calculated on the selling price of Rs.4,80,000.

For the purpose of insurance claim, the rate of depreciation for different car parts is as follows:

Car Parts Rate of Depreciation
Paint work 50% (if a consolidated amount is charged for painting, the cost of painting material is considered to be 25% of the total cost)
Nylon, rubber, plastic parts, batteries and airbags, tires and tubes 50%
Fiberglass components 30%
Glass components No depreciation

For calculation of IDV, the depreciation is charged based on the age of the vehicle on the following basis:

Age of the Vehicle Depreciation Rate for Calculating IDV
New Vehicle (Before purchase) 5%
Below 6 months 5%
6 months to 1 year 15%
1 year to 2 years 20%
2 years to 3 years 30%
3 years to 4 years 40%
4 years to 5 years 50%
Above 5 years (model is obsolete) determined mutually between vehicle owner and insurance company

After a car passes the age of 5 years, the sum to be insured for the vehicle is determined after an assessment. This assessment can be done by an authorised car dealer, surveyor, or an authorised used car dealer.

Replacement of Car In Case of Total Loss:

As explained above, the insurance company is not liable to reimburse any amount more than the IDV determined for a vehicle. In case of total loss of the car, the same rule will be applicable. Your car insurance policy may not get your damaged car completely replaced but it can surely help you minimise the losses. With the reimbursement received you may add some extra amount and get yourself a new car.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Car Insurance Reviews

Page 1 of 50 1 2 3 4 5
  • Royal Sundaram Car Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance with Royal Sundaram. I never contacted the customer service. It is a default insurance from the showroom. The premium is high because I go for bumper to bumper offer, road side assistance, zeo dep. It is a first party insurance and no claim. The policy period is one year.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • SBI General Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    The showroom people has offered me a car insurance policy with SBI. I have made a premium amount of Rs. 22000. They have given me a coverage value of 100%. Total IDV value is 90% of the car value. I have no claim experience till now. The documentation process was done by showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • National Insurance Car Insurance
    "Smart protection with National"
    0.5 4.0/5 "Great!"
    The major factor to chose National Insurance because of the premium is economic, I took the policy for 3 years the IDV value remains the same for the whole tenure. The customer support is good on time they activated the policy. I have Tata Tiago , its around four months vehicle. Its zero depreciation comprehensive plan. I taken the policy through showroom.
    Was this review helpful? 0
    , lucknow
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Satisfied with the policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance is with ICICI Lombard. The customer services are good and I got the policy documents on time. The policy coverage is good and there are features of a road side assistance is there. The premium is economical too. Good overall.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Need to reduce the premium"
    0.5 3.0/5 "Satisfactory"
    I had a car insurance from ICICI LOMBARD which was offered by the showroom at the time of purchasing the vehicle. I felt the insurance premium is very high compared to others. I got a reminder call from the customer service at the time of renewal. It has zero dep for one year.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance from TATA AIG through online channel. They have given lesser premium with zero dep and it includes road side assistance. The customer service is very good. The policy period is one year. I have no claim experience. It is a first party insurance.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Satisfied policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG is the best company to take the car insurance. Since long time i have taken this insurance. The customer care people used to call me to renew the policy and they used to policy renewal letter. I will do payment through online. Several times i have claimed the policy and i have received very good response.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
  • Universal Sompo Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this insurance policy a long time back and it has been a good insurance policy. I had been paying the premium online and the payment method has been convenient. There has been a claim made once and the claiming method has been simple.
    Was this review helpful? 0
    , navi mumbai
    Reviewed on Jan 18, 2019
  • New India Car Insurance
    "Comprehensive benefit policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance was taken from New India. I don't speak with their customer care since i don't require it. I had a claim experience which is a easy process without any tension. As per their policy, the maximum claim amount settled. Since they are providing good services i have opted this policy. They have given me a road side assistance and bumper to bumper facility.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • Bajaj Allianz Car Insurance
    "Good to Go with Bajaj"
    0.5 4.0/5 "Great!"
    The conditions and the insured which they are providing is good, I have insured Ford Car with Bajaj Allianz, the premium amount is reasonable but they can reduce it. Its 1.5 year old year but still the insurer providing 24 hours service, cash less garages and they have tie up with many centers, the response is great.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • ICICI Lombard Car Insurance
    "Premium should be standard as per market"
    0.5 4.0/5 "Great!"
    I never used the policy if something happen I claim it, I didn't interact with the customer care but I get the reminder message for car renewal. I have insured my maruthi Suzuki riz with ICICI Lombard, The premium is higher but still they are good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 14, 2019
  • HDFC Ergo Car Insurance
    "Very good"
    0.5 5.0/5 "Blown Away!"
    Even my car was insured with HDFC Ergo. It is a second-end car and have chosen the third party insurance. I have not done any claim so far. The premium is reasonable. It offers bumper to bumper facility and road side assistance. The policy period is 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 1
    , tirupur
    Reviewed on Jan 10, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 10, 2019
  • National Insurance Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this Insurance policy for my Maruti Car and i had been paying the premium on an annual basis. The premium amount has not been too high and there has been cash less garages available with this insurance policy. Their customer support has also been helpful at times.
    Was this review helpful? 1
    , pune
    Reviewed on Jan 09, 2019
  • ICICI Lombard Car Insurance
    "Nice Policy"
    0.5 4.0/5 "Great!"
    My car was insured with ICICI Lombard. Last year i have purchased this insurance policy. My wife has referred me about this policy. I pay the premium amount of Rs. 13500. They have given me a convenient IDV value. I had no claim experience so far.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 3.0/5 "Satisfactory"
    I'm not satisfied with the service provided by new India. I have bought the car insurance policy. They closed their branch on every weekends hence its difficult to renew the policy. I have been paying the premium amount of Rs. 14000 which is a competitive price. They have given the IDV value of Rs. 1.50 lakhs.
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Average Car Insurance"
    0.5 3.0/5 "Satisfactory"
    My car insured with the New India Insurance company. I have been renewing the policy with the same company for 3 years. I have paid the premium amount of Rs. 7000 and they have offered me a satisfied coverage value. The documentation process was fine
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • review Car Insurance
    "Its Good"
    0.5 3.5/5 "Pretty good"
    Last year I had car policy with Bharthi axa whenever I try to renew it ask my poliy no, whenever I mention the same, it shows the its incorrect. If I try to reach the customer care its not reachable. I done the claim, some minor damage back side of the car, they have processing fee 1500. Remaining all taken care by the insurer.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Great Policy"
    0.5 4.0/5 "Great!"
    ICICI Lombard has a good brand value hence i have selected the car insurance policy with this card and the dealer has also recommended about this policy. I pay the premium amount of Rs. 9000 and this is a 100% coverage with bumper to bumper facility. I'm not sure about the IDV value. Its easy to renew the policy.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jan 08, 2019
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