Total Loss In Car Insurance

Total loss in car insurance refers to a situation wherein the expenses pertaining to the repair or replacement of car parts are more than 75% of the Insured Declared Value (IDV). This generally happens in the event of a theft or when the car is damaged beyond repair. In order to get the full value for your car in the case of a total loss, make sure you opt for a Return-to-invoice add-on cover.

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How to get the Full Value of Your Car in Case of Total Loss

In case your vehicle incurs a total loss due to accident or theft, there are ways to get the full replacement cost of your vehicle and not the depreciated value as total loss insurance. For that, you have to purchase the Return-to-Invoice add-on cover to your car insurance.


A Return-to-Invoice add-on cover helps you receive the full value of your car as total loss car insurance settlement in case it is stolen or damaged beyond repair. This will include the exact invoice value of your car, along with registration charges and all applicable taxes. In short, you can claim the on-road price of your car that you had originally paid as a total loss vehicle insurance claim. 


Note that you have to buy the Return-to-Invoice cover either during the purchase of your comprehensive car insurance or at the time of policy renewal and not after the accident or theft.


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What is Constructive Total Loss in Car Insurance

Similar to total loss, if the repair expenses of the damaged car exceed 100% of the vehicle’s market value, then it is termed as a constructive total loss. The vehicle will be damaged beyond repair with near to zero chances of restoration. In such a case, when you estimate car insurance total loss value, you will find that it’s wiser to purchase a new four-wheeler instead of reinstating the damaged vehicle. 

How is Total Loss in Car Insurance Calculated

The insurance provider carries out the car insurance total loss calculation by considering the IDV, and the total repair cost of the damaged car, when you raise a total loss vehicle insurance claim. So, if the damage repair cost exceeds 75% of the IDV, then your car is considered as totalled. 


In such scenarios, the owner of the vehicle will be paid an amount equal to the IDV of the car determined at the time of buying the insurance plan as car insurance total loss value. Here’s how IDV is calculated:

Car Insurance Total Loss Calculation as per Age of Vehicle:

Age of the Vehicle

IDV Calculation Rate

(Reduction in the cost of the vehicle)

Below six months


Between six months and one year


Between one year and two years


Between two years and three years


Between three years and four years


Between four years and five years


Above five years

To be mutually decided between the insurer and the owner of the vehicle (the policyholder)

You can now calculate the car insurance total loss value using the IDV calculator. After finding out the IDV of your car, you can deduct the repair expenses to get the totalled car value percentage calculation. The rate of depreciation is different from various vehicle parts as well. Here, take a look:

Car Insurance Total Loss Calculation as per Vehicle Parts:

Vehicle Parts

Rate of Depreciation



Nylon, rubber, plastic parts, batteries, airbag, tyres, and tubes


Fibreglass components


Glass components

Not Applicable

Constructive Total Loss Rules as per Motor Vehicle Act,1988

As per Section 55 of the Motor Vehicles Act, 1988, in case of a total loss, you have to report it to the RTO (Regional Transport Office) within 14 days of the declaration. You will be requested to submit the vehicle’s registration certificate for cancellation. This prevents your vehicle from being used for illegal purposes in case of theft.

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FAQs on Total Loss in Car Insurance

  • ✔️What is total loss in car insurance?

    Total loss in car insurance is declared when the cost of repair of your damaged four-wheeler exceeds 75% of the car’s IDV.

  • ✔️What happens if I have totalled my car?

    If you have incurred total loss and your vehicle is beyond repair, you can contact your insurance provider to raise a claim and get the IDV amount. The company shall process your claim and offer the total loss car insurance settlement.

  • ✔️Does total loss in car insurance include theft?

    Yes. Total loss in car insurance also includes theft of your vehicle where the car cannot be traced.

  • ✔️Which add-on cover should I purchase to receive full compensation?

    To receive the complete insurance total loss claim payout, it is recommended to opt for a return to invoice add-on cover in car insurance. 


  • ✔️What is the meaning of a totalled car?

    The total loss in car insurance meaning is when the vehicle is damaged beyond repair due to an accident or mishap.

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