One of the simple pleasures of life is to take a long drive on the weekends and just let go. However, driving is not a pleasant experience all the time. There are times when it can be an absolute nightmare like when we’ve been through an unforeseen accident. In most cases, car insurance policies can help fix the damage to your car and that does not have to be expensive as there are many affordable auto insurance policies. However, in the case of what is called Total Loss, when nothing can be done, how does insurance support you?
What is a Total Loss?
A car accident might leave one with just minor scratches and dents or sometimes with slightly more serious damages. In such cases, you get a part of your Insured Declared Value (IDV) from the insurance company, based on the damages suffered to fix your car. The IDV is the maximum amount you can get from your insurance company, in case of a claim settlement. However, when the accident damages your car to the point where the repair cost is more than 75 percent of your IDV, then it means you have suffered a total loss. Here your policy cannot help fix your car. If the repair costs are higher than the market value of the car, then it is called a constructive total loss. In addition to this, a car can also be determined a total loss, if the insured car is stolen and not to be found.
What Happens When Your Car is Determined to be a Total Loss?
It can be difficult to pick up the pieces when your car is determined to be a total loss. But, if you happen to be in one such situation, here’s what you should do. To recover as much loss as you can from the damage, file a claim with the insurance company. When the car is damaged beyond repair, the right thing to do would be to sell the remaining functioning parts of your car to a scrap dealer. This is also the environmentally responsible thing to do. Every car has a registration certificate. Once your car is destroyed, the certificate also should be cancelled. This can be done at the nearest RTO office within the 14-day grace period. By doing this, you can ensure that the same registration number is not allowed to another vehicle owner. Further, this can help you in avoiding any case of identity theft with your car documents being misused by criminals.
How Can I Get a New Car After a Total Loss?
You can fund your new car partially from the recovery of losses from the insurance policy. For this, you have to file a claim with your insurance company. Your insurer is liable to pay the IDV of your policy. You can use this amount to invest for your new car. With a Return to Invoice add-on in your insurance policy, you will receive the total price of the car invoice along with the IDV, which can help you better in your investment for your new car.