Vehicle insurance holders who want to know about the circumstances in which a car is deemed a total loss must reach out to their insurance providers for correct information. Comprehensive car insurance in NSW can benefit the policyholders with a vehicle replacement or market/agreed value cash payment in the event a vehicle is considered a total loss.
However, this advantage is not included in cheap car insurance policies that offer only minimum benefits like covering damage to other vehicles or properties and legal liabilities up to a specific limit. So, to avail of the best benefits, consider purchasing a comprehensive car insurance policy. While you examine the cost of comprehensive cover across insurers, read this article to learn about the total loss settlement benefit.
Total loss settlement
An insurer may consider a vehicle to be a total loss in the following cases –
- The vehicle’s damage can’t be fixed to a safe standard.
- It may be uneconomical to repair the damaged vehicle.
- If the vehicle is stolen and not retrieved within a particular number of days after reporting the theft incident to your insurer.
Also, know that the state/territory rules and regulations decide how your insurer will deal with a total loss incident.
And once the claim is settled, you can’t reclaim your ruined vehicle. It will be your insurer’s property.
If you have no other vehicle under your policy, then all cover under your vehicle insurance policy stops.
What happens in cash settlement?
Usually, an insurer will pay out the market/agreed value depending on the policy type. Also, your insurer can make applicable deductions before handing over the final payout.
The most common deductions an insurer can make are –
- Applicable excesses.
- Unpaid premiums.
- Unrepaired damages your insurer has paid for during your past claims.
- You can reclaim unused portions of registration and CTP insurance by contacting the relevant traffic authority.
What happens if I choose car replacement?
Car replacement can be possible when your vehicle is considered a total loss, you are a comprehensive car insurance policy holder, your vehicle hasn’t traveled more than the kilometre limit specified by your insurer, and the total loss happens within a year of your vehicle’s new car registration.
Your insurer may replace your damaged car that is deemed total loss with a new one of the same make, model, series, or demonstration vehicle that hasn’t traveled a particular number of kilometres. Then again, talk to your insurer to know the specifics.
Your insurer will likely pay the replacement car’s on-road costs like registration fee, CTP insurance costs, and dealer delivery charges.
What happens if the replacement car isn’t available in Australia?
Suppose the replacement car is not available in the state or territory of Australia where your vehicle is registered; your insurer can offer you to pay the market/agreed value through a total loss cash settlement.
What happens if my vehicle is financed and I want a car replacement?
Before your insurer moves on to replacing your written-off vehicle, you must submit the necessary documents to show that your financier has agreed to refinance your car.
And, you don’t need to accept an offer for car replacement in case of total loss. Instead, you can request a total loss cash settlement. Plus, no other car insurance NSW includes these benefits apart from the comprehensive car insurance policy. Cheap car insurance plans are affordable but many only cover your vehicle for limited road events. So, reflect on the benefits before buying a policy.