When you buy a preferred motor insurance coverage, the insurer may also often let you know that the policy will provide you with total loss benefit in case of a car twist of fate. However, in reality, you should recognize that this does not imply that the insurer will cover the entire replacement cost against the claim made by you. Generally, people are not privy to the precise meaning of quite a few terminologies in motor insurance until they comprehend it after coping with it in a real-life situation. What do you get in case of ‘general loss’?
Generally, for any asset, a complete loss method is a scenario where the restoration price of the broken asset exceeds its insured cost. However, in the case of motor coverage in India, a vehicle is considered an ‘overall loss’ if the cost of repair of a car damaged in an accident exceeds 75 percent of the insured declared price (IDV) automobile. Tarun Mathur, Chief Business Officer- General Insurance, Policybazaar.
Com says that general loss is a period that is mentioned as a state of affairs in which the repair cost of a car exceeds seventy-five percent of the IDV of the automobile in case of unintended damage. “So, ideally, you are eligible to receive the IDV if the car results in a total loss in unintentional harm,” he said. Hence, it no longer matters whether or not the vehicle is just ten days or 10 weeks, or 10 months old; you can not get the alternative price of the automobile. The IDV of the car is typically (for vehicles up to five years old)
determined with the aid of applying a pre-described depreciation factor on the automobile’s ex-showroom price. Hence, in case of general loss, the maximum charge you get is equal to the IDV of the car as cited within the coverage for 12 months, wherein the accident happened. The IDV is collectively agreed upon among you and the insurance business enterprise and set at the start of your insurance policy. Usually, the IDV is calculated by considering the manufacturer’s listing fee of the car minus depreciation.
The cost of registration and coverage premium is not included in the charge before depreciation. The reduction is a discount in the value of an asset through the years, due in particular to wear and tear. The older the car, the higher the depreciation. To restore the IDV, your insurer adjusts it with widespread depreciation fees to comply with the Indian Motor Tariff Act. Here is the schedule of depreciation for arriving at IDV.
Return to the invoice upload, on you can get the price of the new vehicle in case of a general loss claim, Kapil Mehta, co-founder, online insurance broker company Secure now. The insurer is not liable to reimburse any amount in excess of the IDV determined for a car. Since the IDV is a depreciated fee, you may not be able to get a very new vehicle with the declared money in case of overall lack of your vehicle. “However, if you purchase a ‘Return to bill’ add-on (at the time of buying/renewing the policy), then the insurer may even pay the difference between the IDV and the invoice if you have a total loss,” he stated. But, this add-on can most effectively be bought alongside current motor insurance for a vehicle now not older than years from the date of purchase.
