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Constructive Total Loss in Car Insurance

Published On Oct 19, 2021 10:00 AM By InsuranceDekho

A Constructive Total Loss(CTL) is the extensive damage sustained by the vehicle for which the amounts to repair cost equals or suppresses the insured cost of the car. Read this article to know more about the constructive total loss in car insurance.

Accidents cause damages or losses to your four-wheelers and sometimes these losses can be so severe that the repair cost can be humongous. To secure yourself from financial losses during any unforeseen accidents you should buy comprehensive motor insurance to protect yourself financially. It provides financial protection against damages to your motor in case of accidents, natural calamities, man-made calamities, theft, fire, etc. and it also comes with mandatory third-party liability policy.

Constructive Total Loss in Car Insurance

Constructive Total Loss in Car Insurance

The insurance company either repairs/ replaces the car or may pay in cash for the amount of loss or damage. If your car is involved in an accident and it gets damaged, the insurance company may declare your vehicle as a total loss or a constructive total loss in the car insurance. The declaration of the car arises when the damages are beyond repair and if the cost of retrieval or repair of the four wheeler, subjected to terms and conditions of the policy, exceeds 75% of the Insured Declared Value.

Your insurance company will compensate the loss by paying the Insured Declared Value inclusive of the wreck value of your damaged car after considering mandatory deductibles. In case of total loss or constructive total loss you have to cancel the RC of your car at the concerned  Regional Transport Office and give a cancellation certificate to the insurance company for processing and settlement of the claim.

Claim Category Falling Under Constructive Total Loss 

The constructive total loss is categorised under ‘Own Damage’ claim. Damages or losses due to an accident, man made disasters or natural disasters, fire, explosion and total loss are covered under own damage claim. You can raise a claim for damage to your vehicle under Own Damage that is beyond repair if you insure your four wheeler under comprehensive insurance plan.

Constructive Loss Claim Settlement Process 

Below are the steps to submit your claim-

1. Access your account via the insurance company’s website.

2. Click on ‘Claim Now.’

3. Answer questions about the damages or losses.

4. Upload the picture of your damaged car and the team will guide you through the necessary steps.

How Constructive Loss is Different From Total Loss?

Total loss is declared when a motor is damaged to an extent beyond repair. The motor could not be restored to the condition it used to be. A constructive loss is stated when the car is damaged severely and it can be repaired to its previous condition but the liability on the repairs will exceed 75% of the of the Insured Declared Value of the car. Under the situation of constructive total loss, the cost of repair would cost much higher than the costs of buying a new one.

Take Away

In the contract of insurance, your insurance company will pay the liability up to the extent of the IDV mentioned in the insurance policy inclusive of the wreck value of the damaged car. According to the terms and conditions, in case the cost of repair of the car exceeds 75% of the IDV of the vehicle the company will compensate by paying the IDV.

Also Read: 

How To Lower Premium of Your Car Insurance?

Top Factors That Determine The Premium of Your Car Insurance Plan

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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