Auto Loss Claims – Expert Diminished Value Appraisal
An accident may cause severe damage to your car. You may need to send it for repairs to bring it back to its working condition all over again. If your car has insurance, you can claim the charges for its repairs from your insurer. When doing it, sometimes the estimated cost of mending your car may exceed its actual value. In such a situation, your insurer will declare it a “total loss”. Making minor claims from your insurer may be easy. But to make a major claim, such as the one related to a “total loss”, you may need to put more effort. Wondering how to do it? Read on to know more about the right way to make auto loss claims.
What are auto loss claims?
Auto loss generally refers to the physical damage to a car due to an accident. As car insurance also covers theft of your car, you can also file a claim for auto loss due to this factor.
An auto loss claim is the claim that you raise to your insurer in the event of severe damage to your car due to an accident or its theft. Based on your claim and the other details, your insurer will estimate the amount of money needed for either repairing or replacing your car. Depending on their estimated cost, it may declare your car a “total loss”.
Thus, there are two possibilities when your car meets with an accident. In such a situation, as a car owner, you may either raise an auto loss claim or a total loss claim. It depends on the degree or extent of damage to your car. While the procedure to raise an auto loss claim is almost similar in both cases, you need to take additional steps if your insurer declares your car a total loss.
Steps to raise an auto loss claim after a car accident
Most car owners consider their car as a valuable asset. This is because buying it involves a hefty amount of money. Despite your best efforts to protect your car from an accident, the fact remains that a car accident can occur at any point in time. Whenever it happens, filing an insurance claim is the first thing you need to do as a car owner.
Here’s the list of steps you need to follow while going about it.
Communicate with your insurer and inform them about the accident: Every insurer has a window within which you must report the accident of your car for the processing of its auto loss claim. If you fail to do so, it may reject your claim. Further, on your part, disclosing all the details related to the accident of your car will also be necessary while filing its insurance claim.
File an FIR: Unless your insurance claim relates to scratches or dents, you need to file a First Information Report (FIR) to receive the benefits of your car insurance plan. File the FIR of the accident of your car at the nearest police station.
Take photos for validation: Clicking pictures of your car as well as the spot of the accident of your car is a vital step towards the smooth settlement of your auto loss claim. If possible, also note down the name and contact details of eyewitnesses.
Furnish the relevant or requisite documents: Your insurer will most likely demand some documents. Submitting them is a mandatory requirement for the smooth processing of an insurance claim. In addition to the FIR report of the accident of your car, you also need to submit some additional documents. These include copies of your driver’s license, the insurance policy, and your car’s registration certificate.
Ensure the initiation of the inspection process: Following the submission of all the relevant documents to your insurer, you can request it to send a surveyor for the inspection of your car. It will benefit you in two ways. Apart from assessing the overall damage to your car, they (the surveyor) will also suggest different garages within your insurer’s network for settling a cashless claim.
Car repair: The mending of your car is the final step in the process of your insurance for auto loss. If you opt for a cashless claim, the repairs of your car will take place at a garage within your insurer’s network. Otherwise, you can also have your car repaired at one of your insurer’s preferred garages and pay for the expenses on your own. Thereafter, you can submit the bills to your insurer and claim a reimbursement for your car repairs.
All about the total loss of a car
Before claiming an auto loss, linked with the “total loss,” of your car from your insurer, you must understand its meaning. A “total loss” is related to the insured declared value of your car. If the cost of repairing or replacing your damaged car exceeds 75% value of its IDV, it becomes eligible for a “total loss”.
There are only two situations in which your insurer can declare your car as a “total loss”. It can do so either when your car is severely damaged or stolen. In both cases, your insurer estimates the value of mending or replacing your car. Based on their calculations, they decide whether or not they should declare your car a “total loss”. When they do it, your car becomes a totaled car.
Sometimes the estimated cost of repairing your car, as determined by your insurer, may exceed 100% of its market value. In such a scenario, your car becomes a constructive total loss.
A “total loss” of a car due to theft is when someone steals your car and recovering it is next to impossible. On the other hand, it happens due to severe damage when you have to spend almost the same amount of money to repair the damaged car that you spent on buying it.
In both situations, it makes no sense to repair your existing car due to its higher repair expenses. Instead, you can think about raising an auto loss claim to your insurer.
How your insurer determines the value of the total loss of your car
Your insurer will send an adjuster for the overall inspection of your car after receiving your insurance claim. They (the adjuster) will analyze the overall value of your car by examining it thoroughly. If they find that the cost of repairing your damaged car is more than the current market value associated with it, they will call it a “totaled car” and mark it as a “total loss”.
Steps for the settlement of total loss car insurance claim
As is the case with standard auto loss claims, you also need to follow a step-by-step process for settling a total loss car insurance claim. It involves the following steps:
Get in touch with your insurer at the earliest and inform them about the accident of your car.
Make certain you share all the relevant and authentic information about the accident of your car with the adjuster sent by your insurer.
As far as possible, work with the adjuster to facilitate them in assessing the overall damages to your car and the cost of repairing it.
Note down the details of the cash value of your totaled car when the adjuster declares your car as a total loss based on their evaluation. It will come in handy for you in the subsequent stages.
Reach out to your insurer to collect the cash value as determined by their adjuster. Ensure that you receive the exact amount without any dedication.
Though settling a total loss car insurance claim may seem like an onerous task at the outset, you can simplify it by following the above steps systematically. As far as the value of your totaled car is concerned, it will depend on a wide range of factors. These include the condition, mileage, make and model, manufacturing date, and inspection report of your car.
Documents for filing an insurance claim involving a total loss
Whether your car becomes a totaled car due to accidental damage or theft, you need to submit some mandatory documents for the smooth settlement of your insurance. For the acceptance of your claim request, you must submit the following documents to your insurer:
The duly filled as well as signed car insurance claim form
The copies of the FIR, your driving license, vehicle insurance policy, and the registration certificate of your car
Details of the estimated cost for the repairs of your car as determined by your insurer’s surveyor
The report of the surveyor sent by your insurer
Auto Loss Claims – Final thoughts
A car accident, whether it is major or minor by nature, is an unfortunate incident. Car repairs after it can be expensive. Filing an insurance claim is the only way to mend a car after an accident without breaking the bank. Doing it systematically by following a step-by-step procedure will help you with the smooth settlement of your insurance claim. For the best results, try following the above steps based on the situation that is applicable in your case.
Daniel “Dan” Jendrowski
Certified Public Auto Appraiser Diminish Value Experts B.C.A.A. & I.A.C.P.
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