A total loss in auto insurance is a phrase which is applied for the case when an insured vehicle is so badly damaged that it can’t be fixed economically under the terms of the policy. That doesn’t necessarily mean that the vehicle is a complete write off, it only means that the policy’s coverage for the repair bill is less than the cost of the function and the replacement total cost of the vehicle (after depreciation has been factored in) at which stage the insurance company will shell out the replacement vehicle cost under the policy rather than pursue the repair option.total loss
Contingent upon your coverage the insurance company may also factor to the equation the price of the rental car, so in case your repairs are likely to take a longtime even if the fix bill is lower compared to the total loss figure – the costs of supplying you with a *employ car in the interim, may leave the insurance company to decide that it’s not worth pursuing the fix and rather they will pay out the replacement expense of the vehicle. In some instances (especially with older models) it could be that the automobile isn’t badly damaged when a complete loss is used to it, and while it might be uneconomic for the insurance company to pay for repairs the policy holder can select to pay an additional amount together with the replacement cost benefit provided by their insurer, to get it back on the road. In this instance a government review will be needed to ensure the vehicle is restored to great working use, prior to the vehicle returning to the roads. Car owners who choose this course should remember it is not the government inspector’s job to confirm the quality of any repairs undertaken, merely to make sure the vehicle is roadworthy.
Several states have a strictly defined damaged limit which could possibly be applied to cars and other vehicles that are thought to be a total loss. In this instance the insured party is left with the replacement cost as defined in their policy to buy the same vehicle, and they may not try to fix the car and return it to road use.