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What Should you do in Case of Total Loss of your Car

If you get into any kind of an accident where your car has suffered large damages then in insurance parlance, it is called Total Loss of your car. This is a very unfortunate event and there are certain steps you need to take in order to file for an insurance claim.  In proper terms, total loss of the car refers to the situation where the cost of repairing your car is more than 75 percent of the insured declared value (IDV). The insured declared value is the maximum amount that you can claim from the insurance company at the time of any damage. If you have suffered a total loss and are not sure what to do next then read on!

When does total loss happen?

1. Theft- If your car is stolen and it cannot be found, then it is considered to be a total loss.

2. Damage- As mentioned above, if your car suffers damages of more than 75 percent of the cost, then it is a total loss. If the damages exceed 100% of the market value then is it considered to be a Constructive Total Loss.

Insured Declared Value refers to the value that the insurance company is liable to pay to you if the damage to your car is beyond repair. This value decreases as time goes on.

What can you do in case of Total Loss?

You are given the option to sell the remaining parts of your damaged car to a scrap dealer. Some parts can be recycled while others cannot be. The scrap dealer will take these parts and segregate them. This is one way you can be environmentally responsible.It is your responsibility to get your RC certificate to get cancelled at your nearest RTO office. You are given a grace period of 14 days to give the notice to the RTO office. Getting your RC cancelled ensures that the same registration does not go to someone else.

Why is it important to cancel your RC?

Registration Certificate is the certificate that proves the registration and ownership of the car. It lets the officer know that the car is registered to the Transport Office.

It is extremely important for you to cancel the registration certificate in case you experience a total loss of your car.

As mentioned above, when you sell the spare parts to the scrap dealer you are required to get your registration certificate cancelled. If you do not get your registration cancelled, then there are chances of the documents being misused by criminals or people with bad intentions. One of the things that could happen is giving a new identity to a stolen car.

You will need the registration certificate of the damaged car, evidence of the car being scrapped, and insurance details documents to cancel your RC.

The next step would be to file a claim. When you file for a claim on Total loss, the insurance company is liable to pay only the IDV. If you have the Return to Invoice add-on to your policy then the car insurance company is liable to pay the total price of the car invoice. This add-on helps you get the full amount of the car and not just the IDV. To know more about car insurance, click here!

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