When Is a Car Declared A “Total Loss”?

Accidents of any level are devastating and  don’t just lead to lots of mental and physical trauma but results in vehicle damages as well. Has your car experienced major damages in an accident and thinking about what to do now? Are you wondering if you should get it repaired or purchase a new car? Most probably, your car insurance agency will decide it for you. They are the ones to decide whether the car should be fixed or announced a total loss. To assess whether they have made the right decision or not, you need to be familiar with the process of claim.

When is a car declared a total loss?

A car is declared as a total loss when its repairing is more than a specific percentage of the value of the car. The percentage can vary from insurer to insurer. Most companies in the UAE have set this percentage to 50%.

How Is A Total Loss Calculated?

Many factors go into calculating total loss. Let’s have a look at how this process works:

An adjuster appointed by the insurance company will evaluate the mechanical and physical condition of the car after the accident and decide if it needs to be fixed and the involved costs.

After the inspection, the car’s Actual Cash Value is calculated considering the following factors:

  • Year of Manufacture of the Car
  • Depreciation Value Assigned
  • Demand for the Car in the market
  • Wear and Tear Incurred on the car
  • Mileage till date
  • Make and Model of the vehicle

The determined value is the anticipated value of that car before the accident.

If the value of damages is more than 50% of this value, the car is declared a total loss.

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