Loss of marketable value of a car under compulsory motor liability insurance

Material checked by Expert: Anastasia Tabalina

Experienced lawyer, auto lawyer. Legal assistance in case of deprivation of a driver's license.

Any driver, when selling his car, expects that the price will be as close as possible to the one at which it was purchased. But as a result of an accident, even if high-quality repairs have been made, the value of the car can drop significantly. Therefore, it is so important to make the most accurate calculation of the vehicle’s technical characteristics of the damaged vehicle.

Nuances of calculating vehicle insurance under compulsory motor liability insurance

In order to understand how the vehicle insurance under compulsory motor liability insurance is calculated, you need to know some features. The basis from which the calculation is “based” is the market price of the car. Accordingly, compensation for a luxury car will obviously be higher than for a golf class car. Main parameters taken into account:

• loss of presentation, damage to the coating;
• decrease in performance indicators;
• deterioration of technical strengths. knots caused by repairs.

In order to initiate an examination, certain requirements must be met. Namely:

1. If the car is Russian-made, it must be no older than 3 years, if foreign – no older than 5 years.
2. Wear - no more than 35%.
3. The car gets into an accident for the first time.
4. The driver was found not guilty of the accident.
5. UTS payments are summed up with insurance ones, and the total amount should not exceed the maximum amount for insurance.
6. The MTPL agreement is not expired.

On a note!

Under the CASCO agreement, payments are made on the same terms, unless otherwise stated in the document.

What is UTS?

Loss of marketable value (LCV) of a car under an MTPL policy is the difference between the value of a car that was involved in an accident and a similar car that did not go through an accident. Payments of insurance compensation for car insurance today provoke a lot of controversy. Numerous questions are explained by the fact that the number of claims against insurance companies that are approached for compensation for damages under the insurance policy has increased significantly. This issue is regulated by a law adopted in 2015.

Loss of marketability of a car under compulsory motor liability insurance is damage caused to the vehicle as a result of an accident. The value of a car decreases due to the deterioration of its appearance and the breakdown of individual parts of the car.

According to the Supreme Court Ruling of 2015, all insurance companies are required to compensate the vehicle for its lost value. The basis for establishing the size of the vehicle under compulsory motor liability insurance is the market value of the vehicle. Accordingly, the more expensive the car is, the more expedient it is for the driver to defend his right to compensation.

The concept of TCB includes the following criteria:

• loss of appearance of the car;
• damage to the paintwork;
• deterioration in the strength of technical components of the machine due to repairs;
• reduction in performance characteristics.

In order for an insurance company to indemnify a vehicle under compulsory motor liability insurance in 2017, the following conditions must be met:

• Age of the car: for foreign-made cars – no more than 5 years from the date of manufacture; for a car manufactured in the Russian Federation and CIS countries - no more than 3 years.
• The driver of this car is not at fault for the accident.
• The amount of monetary compensation should not exceed 400,000 rubles.
• Parts considered under TCB must not have been damaged due to previous accidents. Compensation for vehicle vehicle repair under the MTPL insurance policy is provided exclusively for new parts.

Important! All payments under the TTS are made on the basis of a court decision.

UTS calculation methods

Calculation of the loss of marketable value of a car is carried out only by a licensed expert organization. They may use any of the following techniques:

• guidance document;
• Ministry of Justice;
• Halbgevaxa.

Attention!

Before requesting an examination, it is necessary to determine the age of the car and the level of wear. If these parameters exceed legal requirements, this procedure will be meaningless.

Guidance Document Methodology

The most complex and rarely used method of the guidance document is based on calculating the technical resistance for each part damaged in an accident separately. Calculations are carried out using the following formula:

UTS general. = UTS1 + UTS2 + UTS3 + … + UTSπ

Explanation: UTS1 ... UTSπ – the cost of repairing each part separately.

You must first calculate the cost of repairing the part using the following formula:

UTSπ = K x SK x SD

Explanation:

• UTSπ – cost of repair of one element;
• K is an indicator of changes in CTS, it is this that depends on age and wear;
• SC – combined indicator of coefficients;
• SD – retail price of the damaged item.

Example for bumper damage:

On a note!

Since the technique requires special care and a lot of time, it is applied exclusively to premium cars.

Methodology of the Ministry of Justice

Calculation of TTC in 2021 according to the method of the Ministry of Justice is used much more often than not. It consists of a comparative description of the price of the car before the accident (the cost of a similar car is taken) and after. Formula: NA = C x ∑PC/100

Explanation:

• NA – the difference between the car before the accident and after repair;
• C – the cost of the car before the accident;
• PC – correction factor, available in the expert’s table.

Example of calculation for damage to the upper transverse frame of the radiator:

Indicators of correction factors are indicated in expert tables. When installing them, they are guided by the following parameters:

1. When performing welding work related to the replacement of components, the correction factor is reduced by 5 times from the initial value.
2. Repairing an element cannot be more expensive than replacing them with new ones.
3. If the defect is not the result of an accident, I reduce the coefficient by 2.
4. Replacing the body paint reduces the final cost of the entire car.

On a note!

If body distortion is detected before an emergency, the coefficient decreases.

Halbgewax technique

Calculation using this method is the most accurate and is used in most cases. The formula resembles the previous one, but has significant clarifications. Namely:

IV = PC/100 x (RS + PCT)

Explanation:

• IV – required data;
• PC – correction factor;
• RS – market value taking into account age and wear and tear;
• PCT – total cost of repair.

When calculating the correction factor, several additional parameters must be taken into account:

1. A = PCT/RS x 100%.
2. B = OR/CZ x 100%, where OR is payment for the services of craftsmen, CZ is the price of spare parts.

An example of calculating the vehicle vehicle cost of 900,000 and 2 years old:

It makes sense to carry out calculations when the following parameters are met:

1. Value A does not exceed the limits of 10 - 90. If the cost of restoring the car is significantly less than the full cost of the car, then the compensation will be a much smaller amount than conducting an examination with all measurements and calculations.
2. Indicator B is more than 40. With these parameters, the cost of work will exceed the price for parts.

On a note!

Calculating the TCB on your own is not an easy task. In order for the figures to have legal force and be presented to the insurance company, the examination must be carried out by a special commission. But you can double-check the data using an online calculator.

Assessment of loss of marketable value using the Halbgewax method

The Halbgewachs method is widely used among European independent assessment and examination offices. According to this methodology, the TTS is calculated using the following formula:

TCB = (K/100)*(CR+CO)

Where:

• LTS
  – loss of marketable value;
• K
  – coefficient determined from the Halbgewachs table;
• CR
  – market price of a used car;
• СО
  – total cost of repair.

Economic feasibility of calculating the technical support

Before you begin calculating the technical support, you should calculate its economic feasibility using the formula:

(CR/CN)*100%

Where:

• CR
  – market price of a used car;
• CN
  – the price of a new car at the time of release.

If the result obtained is below 40%, then it is not practical to calculate the TTS. If the result is over 40%, the TTS is calculated. Next, the coefficient of the relative cost of repairs ( A

) and the ratio of the cost of work to the cost of materials and spare parts (
B
):
A = (CO/CR)*100% B = (SR/SM)*100%
Where:

• CP
  – cost of work;
• CM
  – cost of materials and spare parts.

At A

< 10% (i.e. when the cost of repairs is significantly lower than the price of a used car) VTC is calculated only in exceptional cases.
When A
> 90% (i.e., when the cost of spare parts and materials significantly exceeds the cost of restoration work), it is not practical to calculate the technical resistance.
When B
< 40% (i.e. when the cost of spare parts and materials significantly exceeds the cost of restoration work), the technical cost is also calculated only in exceptional cases.
If the calculations performed have confirmed the feasibility of calculating the control unit, you should determine
the value of the coefficient
K
from the Halbgewachs table and substitute it into the original formula.

Halbgewachs table for determining the maximum value of TCB for passenger cars

This method is not applicable to vehicles involved in two or more accidents.

Instructions for receiving compensation

In most cases, when a car owner applies for compensation, insurance companies refuse. But according to the resolution of the Plenum of the Supreme Court No. 58, paragraph 37 of December 26, 2017 “On the application of the law on compulsory motor liability insurance”, a decrease in commodity value is damage and is subject to mandatory compensation under certain conditions. These conditions are enshrined in Art. 7.1 “Research of motor vehicles to determine the cost of restoration repairs and assessment.”

Before starting a legal battle with the insurance company, you must follow these instructions:

1. Carry out calculation of the technical equipment. To do this, seek independent expertise from any competent organization that has the appropriate license. Additionally, it is necessary to collect documents confirming the car repair costs incurred, a report from the insurance company on the initial and subsequent inspections.
2. After the calculation has been made, the car owner is given a certificate of vehicle registration. It is submitted to the insurance company.
3. Employees review the entire package of documents and, if they agree with the presented papers, pay the indicated funds.
4. If compensation is refused, the motorist will have to go to court.

Attention!

If, at the time of the occurrence of the insured event, the company with which the MTPL agreement was concluded was declared bankrupt, legal proceedings will begin with the car owner at fault for the accident.

List of required documents

Both when contacting “insurers” and when collecting funds through the court, the most important thing is to fully collect documents. The main package consists of:

• passport;
• driver license;
• a valid MTPL policy;
• vehicle registration certificate (VRC);
• receipt of payment for the examination;
• act with calculations of the expert commission;
• traffic police protocol;
• application from the car owner for compensation.

Attention!

Professional lawyers recommend drawing up at least 4 copies of each document: for the insurance company, for the court, for two participants in the accident.

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How to submit an application for MTPL under compulsory motor liability insurance to an insurance company?

An application to the insurance company must be drawn up and registered in the office of the insurance company in 2 copies. The first certified copy is sent for consideration by the company management, and the second is handed over to the applicant.

It should be noted that the procedure for compensating for insurance policy in Russia has not yet been fully developed, which insurers take advantage of by refusing payments. That is why it is worth immediately drawing up a statement of claim so that the insurance company employees understand the seriousness of the intentions of the driver of the damaged car.

The statement of claim includes the following items:

• name of the court;
• data of the defendant - the insurance company;
• data of the plaintiff, that is, the client of the insurance organization;
• data of the culprit of the accident, considered a third party;
• cost of claim;
• the amount of the state fee;
• description of the accident;
• nature of the damage to the machine.

Next, you should indicate the fact that the plaintiff is a client of the insurance organization, which is confirmed by the current OSAGO policy. In the document, it is important to refer to articles of the law confirming the policyholder’s right to receive compensation under the TTS.

Read Penalty under OSAGO

The application is accompanied by independent expert report documents indicating the amount of the TTS. The claim price indicates the amount of the unpaid TTS amount.

After that, state your requirements, indicating in the following points:

• TCB amount;
• the amount of legal costs;
• the amount of state duty paid by the plaintiff.

Next in the application, list all the documents that you are attaching to the application. At the end, add a date and signature.

Attach to the documents:

• original and copy of ID;
• driver's license;
• MTPL policy or insurance contract;
• a copy of the application and pre-trial claim;
• payment document confirming payment of the state fee;
• PTS;
• car registration certificate;
• diagnostic card;
• a copy of the accident report;
• protocol;
• resolution (or refusal) to initiate a case;
• a copy of the accident notice;
• a copy of the act on the occurrence of the insurance situation.

You should also attach documents from an independent examination on the cost of car repairs:

• inspection report by an expert;
• report on the size of the TCB of an independent examination;
• an agreement concluded between the plaintiff and the expert appraiser;
• copies of the claim according to the number of participants in the case.

FAQ

Question

: “The insurance company refused to pay compensation, what should I do next?”

Answer

: “To date, the legislator has not established clear instructions for the collection of TTS, therefore it is necessary to act in accordance with general legal norms:

• pre-trial claim to “insurers”;
• recourse to the court at the location of the insurance company, in case of refusal.”

Question

: “The TTS calculation showed an amount greater than what insurance can cover, from whom should we recover the rest?”

Answer

: “It is necessary to file a claim in court and name the car owner at fault for the accident as the defendant.”

Question

: “Is it possible to pay compensation for a new car if it gets into an accident a second time?”

Answer

: “No, in this case there will be no compensation for damage.”

Arbitrage practice

Before submitting documents to the court, it is necessary to analyze the judicial practice in such cases. Were there any cases where a decision was made in favor of the plaintiff? Yes, judicial practice shows that decisions are made in favor of vehicle owners. But for this you need to correctly draw up a statement of claim and prepare all the necessary documents.

The main document is the claim. When compiling it, you must indicate the following information:

• about the court in which the claim is filed;
• about the applicant - full name, address where he lives, contact information;
• about the insurance company - full name and position of the director, full name and address of location;
• insurance requirements;
• the circumstances that forced the applicant to seek support from the court;
• all events that are relevant to the case and which were the precursors to going to court;
• requirements for the insurance company - payment of insurance under the CASCO policy. If the owner of the car does not agree with the amount specified in the contract, he can make an independent calculation and present it to the court for consideration. But it is unlikely to be taken into account;
• annex is a list of documents that confirm the facts set out in the claim;
• the applicant's signature and its transcript.

Documents must be submitted to the court located at the location of the defendant, that is, the insurance company. If the required amount of compensation is less than 50 thousand rubles, then to the magistrate’s court, if more, then to the district court.

As judicial practice shows, the decision is made in favor of the owner. But before the Supreme Court made its decision, controversial issues often arose. Now any driver who has purchased a CASCO policy has the right to compensation for vehicle insurance. The court will decide in his favor even if this condition is not specified in the contract.

All legal costs incurred by the plaintiff are recovered from the defendant in full.

How do you calculate the vehicle's vehicle's vehicle under compulsory motor liability insurance?

The calculation must be carried out by qualified experts. Today there are several methods in use. The courts believe that the most reliable are calculations made on the basis of methodological recommendations of the Ministry of Justice of the Russian Federation. The amount of the car's vehicle's vehicle insurance is affected by the value of the vehicle at the time of the accident and the characteristics of the damage. The following is taken into account:

• nature of damage;
• type of defects obtained;
• amount of damage.

To calculate the value of the lost value of the car, it is necessary to save all documentation on the restoration work performed and the results of the inspection of the vehicle. It is best to scan the papers and make the required number of copies.

The driver can independently choose an expert for assessment. The insurance company must be notified in advance of the procedure. She may send a representative who will be present during the assessment. Within the specified period, the owner of the car must arrange its delivery to the site for examination. It usually lasts about half an hour. It is possible to call an expert; it is usually used for cars that are not running.

What to do if the insurer refuses to pay out under the MTPL under compulsory motor liability insurance

According to statistics, in nine cases out of ten, the insurance company refuses to provide compensation for vehicle insurance under compulsory motor liability insurance. Therefore, it is better to be determined to defend your rights. Sometimes even through court. To do this, you will need to collect a set of supporting documentation and file a claim. Expert judgment is also required. It is important to establish accurately that the case fully meets the conditions for compensation for loss of value.

The actions of the insurance company can be challenged in courts of general jurisdiction. As noted above, this can be done within three years after the road incident.