How is the total loss of a car calculated under CASCO?

What is total in CASCO insurance?

Total under CASCO is the complete or partial loss of a car due to an event covered by the insurance policy. A vehicle is considered unsuitable for restoration if more than 70% of its structural elements are damaged.

Important! The insurance amount is calculated according to the principle: for each month that has passed since the signing of the contract, a percentage of depreciation is deducted.

Total compensation will be paid if the car was damaged as a result of the event:

• fire;
• serious accident (collision with a pedestrian or obstacle, rollover, running off the road);
• natural disaster;
• unlawful actions of third parties (utility or technical services, criminals, etc.).

The extent of damage caused is determined through an independent assessment. The insurance company requests an inspection, then attaches the report to the contract.

What is included in CASCO insurance can be found here.

Total is beneficial for insurance companies because:

• after payment of compensation, the contract is terminated, and the unclaimed insurance premium remains with the company;
• the company can repair the car or sell it for parts, which will cover part of the costs;
• in some situations, an entire part of the vehicle turns out to be more expensive than was revealed during the assessment.

The driver, if in doubt about the difference, can send the insurer a request to recalculate the amount of compensation, attaching the conclusion of an independent appraiser to the case. If the company refuses to re-examine, the car owner has the right to file an application in court.

You can learn about the features of CASCO insurance for a car here.

What is mini-total and who is it suitable for?

In addition to regular CASCO, there is also the so-called mini-CASCO, for which the insured amount is not the full cost of the car, but only, for example, 75%. Such programs are chosen for one purpose: to reduce the size of the insurance payment (savings can be quite significant up to 50%).

This may benefit the following drivers:

• with extensive driving experience;
• having experience of getting into only minor accidents or no such experience at all;
• with slight wear and tear on the vehicle;
• those who want to save money.

With mini CASCO, there is a risk of total loss of the car, but there is only one policyholder on the list of drivers.

In the event of an accident, compensation is paid only if the other driver is at fault for the collision. This is a convenient option in case of complete loss of the car for experienced drivers.

When drawing up a contract, it is worth considering that the insurer may provide a ready-made package with a large unconditional deductible (the non-covered portion of the loss). This is usually done in order to further reduce the cost of the program and attract as many buyers as possible.

Under mini-CASCO, a reduced insurance amount can be paid. The size of the payment will decrease due to the deductible and the percentage of wear and tear.

Options for paying under CASCO insurance in case of total loss of a car

Total loss of a car under CASCO is paid in three forms:

Full compensation

The insurer pays the entire amount for which the car was insured. The client signs an abandonment agreement - ownership of the vehicle is transferred to the company, for which he receives compensation. For example, if a car was insured for 1,000,000 rubles, then the owner will receive exactly that much (without any deductions). These are quite favorable terms of cooperation, but they are not so common.

Related article: How CASCO works for Yandex.Drive

Important! Insurers often try to take advantage of the situation: they deduct the amount of depreciation, reducing the amount of compensation, for example, to 900,000 rubles. If a similar calculation procedure is not specified in the agreement (there is no mention of deducting depreciation), then such actions are considered illegal. The driver must go to court to protect his rights.

Payments based on wear and tear

The amount of compensation taking into account wear and tear (usually equal to 1% for each month during which the policy was in force). In this case, the remains of the “lost” car also become the property of the company. For example, if the transport was insured for 1,000,000 rubles, the amount of damage was estimated at 700,000 rubles, and the accident occurred in the 12th month, then 12% (84,000) will be deducted from the compensation. The policyholder will receive 616,000 rubles.

If the incident happened closer to the time the policy was issued, and the insurer added a clause on calculating depreciation, then the client will receive the maximum benefit. The longer CASCO insurance is valid, the less money the policyholder will receive. Moreover, the company has the right to restore the “lost” car or sell it for parts, since it becomes its property. This does not happen often, since large companies try to maintain their reputation.

The client finds himself in an unpleasant situation if the car was purchased recently and on credit: compensation from the insurance company will be transferred directly to the bank. In such circumstances, it is advisable to try to keep the broken car so that you can sell the intact parts and make a profit.

Payments minus surviving parts

The company may pay compensation, from which the cost of the usable remains of the car will be excluded. Then the “lost” vehicle with all the vehicle equipment remains with the insured.

The insurer determines the amount of compensation taking into account wear and tear, subtracting the cost of serviceable remains (GOTS), which is why not much money will fall into the client’s hands, but he will retain ownership of the car. The main objective of the CASCO policy is to preserve material property at the original level will not be achieved. This form may be more profitable if the owner can sell the parts for real value. Sometimes the car can be repaired despite the appraiser's decision.

For example, a vehicle is insured for 1,000,000 rubles. The appraisers estimated the cost of the GOTS at 300,000 rubles, restoration will cost 700,000 rubles, from which depreciation is deducted (the event happened in the 12th month, which means the depreciation will be equal to 84,000 rubles). The client will be given 616,000 rubles and the remaining elements, which he can dispose of at his own discretion.

Article on the topic: “CASCO Ingosstrakh” - conditions and insurance cases

You cannot rely only on the value of the HOTS declared by the appraisers. Companies often inflate their value to save on compensation. This fact is difficult to prove, since there is no uniform regulation for accounting for HOTS in the legislation. It is easier to assess the damage to the entire vehicle and analyze proposals for the sale of vehicles with similar breakdowns.

Important! It is recommended to use the services of an independent appraiser to make the right choice. This will help to objectively assess the benefits of each option.

Who benefits from the constructive loss of a vehicle?

As already noted, it is more profitable for the insurance company to recognize the car as unfit and pay the full amount to the client than to pay for parts and repair work. It is no secret that the standard hour for repairs, especially for foreign-made vehicles, exceeds 1,000 rubles. Such expenses are completely unprofitable for the insurance company. The insurance company, in most cases, recognizes the car as a total to minimize costs. It is worth considering that some insurance companies may abuse and recognize the total for personal interests.

For example, the insurer can make a payment, sell the remaining balance and remain in the black. In practice, some cars are restored and sold for a higher price, which is also an additional profit for the insurer. Since insurers actively cooperate with all experts, it is not difficult to agree on the results of the conclusion. If you understand that the car is subject to restoration and the insurance company deliberately made an incorrect conclusion, then you should go to court. In this case you will need:

1. Carry out an examination at your own expense.
2. Write a statement indicating the amount of payment based on the results of the insurance company’s assessment.
3. Attach the results of the re-examination.
4. Attach your account details and ask for the difference to be transferred within 10 days.

How are total payments made?

The insured event must be registered in accordance with the regulations. A representative of the company issues a memo to the client, which spells out the entire algorithm of actions in case of an accident.

You need to call the traffic police to the scene of the accident and record the insured event. If you don’t have time to wait for the traffic police and collect all the accompanying documents, you can contact the emergency commissioner. Their services cost about 1,500 rubles.

In case of an accident:

• you cannot move the car from the scene of the accident;
• you need to take a photograph of the participants in the accident and record the damage;
• collect contacts of witnesses (they may be useful if proceedings arise).

What documents are needed

Payments under CASCO insurance in case of total loss of a car are assigned upon provision of documents:

• identification;
• confirmation of ownership (PTS, STS, etc.);
• driver license;
• a copy of the insurance policy;
• certificate from the traffic police (official proof of the occurrence of an insured event).

Important! The policyholder additionally fills out an application form - it is issued at the company’s office.

What to do with valid CASCO balances

You can try to sell the usable remains on the open market, make a profit, add compensation from the insurer and buy a new car. The sale of parts can begin only after receiving the appraiser's report and documentary agreement with the company.

Important! If, according to the expert’s assessment, the cost of the HOTS is too low, then it is more profitable to leave the parts to the insurer and receive compensation. The possibility of choosing the form of payment is provided for in Article 10, Clause 5 of the Law “On the Organization of Insurance Business”.

You cannot sell GOTS if a trial is planned (for example, the client does not agree with the decision or the insurer is delaying the transfer of compensation). Re-evaluation may be required. If GOTS are not available, then the court will be able to rely only on a previously conducted examination.

If suitable parts are transferred to the insurer, the client is obliged to ensure their safety. The policyholder, as the owner of the car, bears full responsibility for it. If the HOTS receive additional damage, the company may refuse to accept it and pay compensation.

Related article: Loss of marketable value of a car under CASCO

Damaged vehicles are sent to paid parking. The insurer undertakes to pay the client's expenses necessary to transfer the car into the ownership of the company, unless otherwise provided by the contract. In practice, the insurance company is in no hurry to take on expenses. The client must notify the company that, in order to preserve the property, the car was placed in a paid parking lot, and attach a copy of the invoice for services. If the insurer’s manager offers to bring the vehicle to the office, this cannot be done, since then the owner will have to pick it up at his own expense. Additional costs can only be challenged in court.

Important! The car ceases to be the property of the driver at the moment of signing the abandonment agreement. From now on, you can stop paying for parking if the policyholder paid for it.

How are payments made if the car is a credit car?

The following procedure applies to credit cars:

1. The insurance company notifies the lender about the accident, since according to the contract, compensation is due to him, and not to the driver.
2. The client fills out an application for payment, in which he indicates information about himself and the vehicle, and attaches an expert report.
3. The insurance company sends a response to the policyholder and transfers money to the creditor. Part of the funds may be transferred to the borrower if the insurance amount exceeds the remaining debt. For example, if the loan was repaid ahead of schedule and was repaid by 80%, then the bank may allow all the money to be sent to the policyholder’s account.

With a total credit car, the driver loses part of the profit, but reduces the amount of debt to the bank.

Total loss of a car purchased on credit

As a rule, if a car was purchased on credit, a collateral agreement is drawn up between the bank and the borrower. That is, the car is pledged until the loan is repaid. Consequently, in the event of a complete loss of the car, the beneficiary under the CASCO agreement will be the bank.

This can be avoided by paying the bank the full cost of the loan. Then the owner of the car will become the beneficiary.

If it is not possible to repay the loan ahead of schedule, the bank will independently, without taking into account the interests of the borrower, choose the payment procedure. In this case, the vehicle owner may be left without a car and without money that has already been paid to the bank. However, the remaining amount is unlikely to be enough to purchase a new car.

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When you won't be able to get a refund

The insurance company has the right to refuse to pay compensation if the accident occurred due to the malicious intent of the owner or due to a vehicle malfunction.

For example, the policyholder will not receive money if a fire occurs due to a short circuit in the wiring. Also, compensation will not be paid if the driver was under the influence of alcohol or drugs.

Important! If the policyholder does not agree with the decision of the insurance company, he has the right to go to court. He will have to collect evidence of his innocence, otherwise the judge will side with the company.

Repair time under CASCO

The in-kind form of compensation under CASCO is the most popular type of payment. In this case, the policyholder receives a referral from the insurance company for repairs at the selected service station.

The referral is a letter of guarantee to the technical center from the insurer, in which the insurance company undertakes to pay for the list of works specified in the document to restore the insured car. In this case, the car owner does not deal with money, he simply gives his car to a service station and after a certain time receives the repaired property back. The technical center itself will issue an invoice for repairs to the insurance company, which will pay for it within the period determined by the agreement concluded between them.

The period for payment of insurance compensation, that is, receipt of car repairs, depends on many subjective factors, for example:

• Queue at the service station. Often, car owners want to be directed to a specific technical center. Popular service stations are often very busy, especially dealers and especially during the accident season (in winter, for example). In addition, the insurance company cannot influence the time that passes from the moment the repair order is issued to the date the policyholder registers at the service station.

• Availability of spare parts in the warehouse of the technical center. Depending on the extent and location of damage to the vehicle, various spare parts may be required to repair it. Not all of them are constantly in stock at the service station. If a spare part has to be ordered from a supplier or manufacturer, this can significantly increase the vehicle repair time. Service stations try to find ways out of such situations in favor of the client. If the damage does not affect the ability to move, the car is returned to the owner and I invite you for repairs after the ordered spare parts arrive at the warehouse.

• Approvals. The insurance company, when issuing a referral for repairs, indicates only those repair effects that were discovered during an external inspection of the vehicle. At the station, after removing parts or installing the machine on a lift, additional damage may be discovered. The technical center does not have the right to begin eliminating them without agreement with the insurer. Luckily it doesn't take much time. Most insurance companies have a regulated period for reviewing service station requests no longer than three working days.

• The complexity of repairs. Obviously, painting a bumper and replacing the roof on a car take different times. The repair period directly depends on the degree of damage to the vehicle.

Pitfalls of CASCO payments in case of total loss of a car

Litigation is the norm in the insurance industry. The limit of surviving elements of the car, required for recognition of the total, can play into the hands of the policyholder. If this point is not clearly stated in the contract, then it is permissible to use a comparative analysis of the conditions of other companies. In court, constructive loss of a car under CASCO can be recognized even with 50% of the damage.

Most often, insurance companies are willing to pay compensation only taking into account wear and tear. The owner needs to consider the age of the vehicle when deciding whether to keep the vehicle. If, due to the long service life, depreciation has accumulated, then it makes sense to sell off the HOTS yourself.

Nuances in case of an accident, fire and other cases of complete loss of a car

Insurance companies recognize the following as insured events for which the full cost of the car may be paid:

• Damage to a vehicle as a result of a traffic accident. This is similar to regular insurance payments, but only damage is considered an insured event, the repair coverage of which exceeds the established percentage threshold of the market value of the car.
• Damage to the vehicle due to fire.
  If the car burns down, in CASCO this is considered one of the most slippery insurance cases. Each insurance company has its own interpretation of such an incident, so in each individual case you need to focus on the provisions of the contract. The only unifying factor among all insurers is arson. Other causes of fire: short circuit, ignition from external heating devices and similar cases may or may not be included in the contract.
• Damage to the vehicle caused by the elements. Many companies include this type of insurance event in CASCO TOTAL, but you need to understand that to confirm the causes of such damage you will need to obtain an official certificate from the hydrometeorological service.
• Damage to the vehicle from the actions of third parties. This clause is often included in voluntary insurance against the total loss of a car, but is used extremely rarely, since damage to a car not from fire in the amount of 65-80% at the hands of attackers is an exceptional fact of vandalism, which is rarely seen.

There are other types of insurance cases that are prescribed by insurers in CASCO TOTAL contracts, but they are more options and vary greatly among different insurance companies.

What are valid balances and how do they affect payout?

According to paragraph 18 of Art. 12 of the law on compulsory motor liability insurance, the amount of indemnified insurance damage to the car owner in the event of complete destruction of his property must correspond to the established price of the damaged vehicle on the day of the accident, with the exception of the cost of undamaged remains.

In paragraph 5 of Art. 10 of the Law “On the Organization of Insurance Business in the Russian Federation” states that in the event of complete destruction of the car, the beneficiary has the right to refuse it in favor of the insurer. Then the insurance company is obliged to pay the beneficiary the established amount of compensation in full.

That is, having recognized the car as total, the policyholder offers the victim compensation for damage, subtracting from it the price of undamaged parts that remain in the property of the victim.

An examination to determine intact parts is carried out if:

• the amount of payment for repair work is not more than 85% of the amount of compensation;
• the age of a domestic car does not exceed 7 years, foreign cars - 15 years;
• the degree of wear of components and parts is no more than 60%.

In all other cases, the costs of disassembling the car and measuring parts for their suitability are considered inappropriate and the victim is offered a total insurance payment in full.

Useful remains are considered components and parts that the policyholder can later use for personal purposes. They must meet the following requirements:

• upon visual inspection there are no defects on the components;
• the part is not covered with rust;
• there are no signs of repair;
• the components have retained their presentation;
• all available characteristics must comply with the requirements and parameters of the manufacturer.

If at least one item does not comply, the part is not considered acceptable.

To reduce costs, the insurance company considers the usable remains the property of the policyholder and calculates their value from the amount of compensation. As a result, the victim receives much smaller payments than expected and a set of unnecessary spare parts.

By Resolution No. 58 of December 26, 2017, the Plenum of the Supreme Court decided that usable remains can be returned to the car owner only with his consent. In other cases, all intact spare parts remain the property of the insurance company, and it does not have the right to impose them on the victim.

If the victim refuses the usable remains, he is paid the insurance premium in full without deducting the cost of entire components.

Total credit car

Since many vehicles are purchased on credit, a completely logical question arises: how does the comprehensive insurance payment for credit cars occur if the car is recognized as total? When concluding a car loan, the bank obliges not only to purchase a voluntary protection form, but also to appoint a financial company as a beneficiary for the entire term of the loan agreement.

This means that the bank will be the first to receive all payments from the insurer. If the total is recognized, the insurer:

• makes an examination and official documents confirming the amount of loss,
• sends a written agreement to the bank asking where to transfer funds,
• receives an official response and makes a transfer of compensation payment.

If the loan debt is less than the amount of the insurance payment, then the compensation is divided between the bank and the policyholder. In the official response, the financial company indicates the borrower's account and states the exact amount of debt under the loan agreement, within which it is the beneficiary.

The insurer can also make a transfer in full to the bank’s account, when it, in turn, debits the required amount and invites the borrower to receive the remaining amount.