Charlotte Miller

Understanding total loss in car insurance: Claim process and benefits

In the event of accidents or damages a car owner can face the total loss of their car. Car insurance is a key aspect of owning a car as it provides financial protection. Total loss occurs when the cost of repairs exceeds the actual cash value (ACV) of the car, or when the car is irreparably damaged. In such cases, understanding the claim process and the benefits associated with total loss in car insurance becomes important. Total loss coverage protects you financially, saves time and offers peace of mind in unfortunate situations. We will delve into the complexities of total loss coverage, total loss claim process and the benefits it offers to policyholders.

Understanding total loss

Total loss is also referred to as a write-off, which is a term used by insurance companies to describe a situation where the cost of repairing a damaged car exceeds a certain percentage of its ACV. In general, if the cost of repairs exceeds 75% to 90% of the ACV, the insurance company will declare the car a total loss.

Claim process for total loss

  • Reporting the incident

Provide them with all the necessary information, such as the date, time and location of the incident and a detailed description of what happened. It is the first step in the claim process to report the accident or damage to Kotak General Insurance.

  • Vehicle inspection

Kotak General Insurance will assess the extent of the damage once the claim is filed to determine if the car is a total loss. We may also consider other factors such as the age, mileage and pre-existing damage of the car.

  • Actual cash value calculation

The actual cash value (ACV) of a car, a crucial factor in car insurance. It is calculated based on factors like the make, model, year, mileage and condition of the car before the accident. Typically, we will use industry-standard tools and databases to determine the ACV.

  • Settlement offer

If the adjuster concludes that the car is a total loss, we will make a settlement offer. This offer will be based on the actual car value of the car minus the deductible and salvage value (if applicable). The salvage value is the estimated value of the damaged vehicle if it were to be sold for parts or scrap.

  • Acceptance or negotiation

You have the right to accept or negotiate the settlement offer as a policyholder. It’s important to research the market value of your car to ensure you receive a fair settlement. To support your case and negotiate for a higher amount, if you believe the offer is insufficient, you can provide evidence, such as maintenance records or recent repairs.

Benefits of total loss coverage

Understanding the car insurance claim benefits in case of total loss:

  • Financial protection

You can use the settlement amount towards purchasing a new vehicle instead of incurring the high costs of repairing a severely damaged car. Total loss coverage provides financial protection by reimbursing you for the loss of your car.

  • Time-saving

You can avoid the lengthy repair process and the potential for future mechanical issues related to the accident by accepting the settlement offer. Dealing with a total loss claim can be time-consuming.

  • Salvage value

In some cases, you’re allowed to keep your totaled car insurance, deducting the salvage value from the settlement amount. You can then sell the salvage car for parts or scrap, potentially recouping some additional funds.


Understanding the claim process and the benefits it offers can help ease the burden of total loss in car insurance which can be a distressing experience. Co-operating and promptly reporting the incident along with researching the market value of your car can ensure a fair settlement. Remember to review your car insurance by Kotak General Insurance to fully understand the terms and conditions of your coverage.