What is a Total Loss?

If you make an Insurance Claim, your Insurer may decide to write the vehicle off.They will call your vehicle a TOTAL LOSS.Please note, just because some one says “its a write off” doesn’t mean it is…the only term that should be used is a TOTAL LOSS.

There is a good reason why this wording is important, and we will explain why when we explain categories of total loss.

Under the Contract Of Insurance your insurance company has agreed to indemnify you “UPTO” the market value, what this means to you , is that they agree to repair your vehicle “UPTO” that value. Now if you are wondering why we have highlighted that twice, here is why.

Your insurance company will tell you your car is a TOTAL LOSS for the following reasons.

  • CATEGORY “A” Your car is a completely Burned out, ie it has been set fire or  has caught fire, when only the shell is left and clearly cannot be repaired This is called a Category A TOTAL LOSS, NO Retrievable parts.
  • CATEGORY “B” Your vehicle has suffered structural damage and the repair cost exceed the market value, or the vehicle has suffered FLOOD DAMAGE and was immersed in Effluent or Contaminated water. This is called a Category B TOTAL LOSS. Just because your car has Flood damage, does not mean it has to be a Category B Total loss. Contact me to discuss if you want to retain your flood damage car, I will advise.
  • CATEGORY “C”  the estimated repair cost to repair your vehicle is more than market value of your car.
  • CATEGORY “D” This is what the insurance companies call a “CONSTRUCTIVE TOTAL LOSS”. What this means is that the INSURER IS DECIDING NOT TO REPAIR your car, when the insurer has looked at the repair cost and the  amount of money the insurer will receive when they sell the salvage, the cost to repair  are more than the insurers liability.

To give you an example to make it clearer, you have a car worth £1000 , the insurer when disposing of the salvage of the vehicle advise’s that it will obtain£300 for the salvage of the vehicle when they dispose of it.

This means the maximum repair cost they will work to is £700, as if it was £701 if you add that to the £300 they would obtain for salvage, it is more than the £1000 they said was the market value.

Now if your vehicle is a Category D total loss, you do still have the right to insist on your insurer repairing your car!the insurer will try and refuse, BUT you are insured “UPTO” The market value as per your contract of insurance, not up to a percentage of it’s value. This is especially important if the vehicle is of a low value, you can either insist on them repairing your car, ask for a cash in lieu settlement, or if it is your choice, decide to go down the route of Total lossing your car and receive the market value.