Nearest broker: Searching for a broker nearby…
Nearest broker: Tweed Phone: (613) 478-2532 Sunderland Phone: (705) 357-3916 Sudbury Phone: (705) 523-2030 Penetanguishene Phone: (705) 549-7437 Ottawa Phone: (613) 733-3312 Parry Sound Phone: (705) 746-2441 Orillia Phone: (705) 325-4234 Kemptville Phone: (613) 258-5991 Eganville Phone: (800) 884-1045 Petawawa Phone: (613) 687-4805 Belleville Phone: (800) 361-0941 Winchester Phone: (800) 487-3706 Wellington Phone: (613) 399-3620 Trenton Phone: (877) 455-0299 Prescott Phone: (877) 504-3569 Picton Phone: (888) 475-2776 Peterborough Phone: (800) 958 2270 Perth Phone: (877) 248-1222 Pembroke Phone: (877) 399-3299 Oshawa Phone: (800) 887-7309 North Bay Phone: (705) 475-0001 Napanee Phone: (613) 354-2152 Morrisburg Phone: (800) 806-0746 Midland Phone: (888) 737-6465 Madoc Phone: (613) 473-5266 Kingston Phone: (800) 590-5422 Gananoque Phone: (800) 932-2131 Embrun Phone: (866) 853-4740 Cornwall Phone: (844) 463-3616 Cobourg Phone: (800) 895-5902 Carleton Place Phone: (888) 237-9517 Brockville Phone: (888) 345-8663 Brighton Phone: (613) 475-1430 Barry’s Bay Phone: (866) 845-2123 Barrie Phone: (705) 726-3350 Bancroft Phone: (800) 994-0036 Arnprior Phone: (800) 668-7337
Get a Quote
Open Menu
front of car involved in an accident. Car a total loss

Why is My Vehicle Considered a Total Loss?

When you have an auto insurance claim a lot of things can be going through your head. First and foremost you are going to make sure that you and others around you are not injured. But what about the damage to your vehicle? Is the damage repairable? Can you still drive the vehicle? Or is your vehicle a total loss? What goes into the decision of writing-off a vehicle or considering it a total loss? There are really only two factors that go into determining if your vehicle is considered a total loss. The first is obvious, if your vehicle is damaged to the point where it will no longer be considered fit for the road it will be written-off. The second is less obvious but it comes down to the vehicle no longer being worth the cost of repair.

Vehicle is unfit for the road

In order for a vehicle to be deemed unfit for the road it has to have sustained damage that permanently compromises the safety of the vehicle. These claims typically involve damage to the frame, steering system or chassis. The eye test typically works for examining a total loss vehicle, however there can be times where the damage occurs to a portion of the vehicle that may not be visible but is an important part of the vehicle and its performance. When a vehicle is deemed unfit for the road the insurance company determines the vehicle a total loss regardless of what the cost to repair the vehicle would be.

Vehicle is no longer worth it to repair

When you insure a vehicle you are typically insuring the actual cash value of that vehicle. Unless of course you purchase your vehicle new and your insurance policy has the endorsement OPCF 43. This endorsement removes the deprecation on your vehicle for a set amount of time (typically the first 2 years of driving that new vehicle). But if your vehicle is not new or no longer qualifies for that endorsement your vehicle will be covered for the actual cash value. This means that you may have purchased your vehicle for $20,000 but now it is 8 years old and has depreciated. As the value of your vehicle depreciates over time the more likely it is to be considered a write off if it is involved in a claim. The reason for this is your vehicle is no longer cost effective to repair or the cost of repairs are going to be greater than the current market value of your vehicle.

How do I know the actual cash value of my vehicle?

There are several factors that impact the actual cash value of the vehicle. Obviously the type of vehicle is the most important factor in determining the value of the vehicle. The amount of kilometres also impacts the value. The more kilometres the lesser the value. The condition of the vehicle will also play a role. If the vehicle was kept in good condition with regular updates and a good engine that helps the value of the vehicle. If there are any customizations to the vehicles or add-ons those will also be factored. Remember if these add-ons or customizations are performance based you need to tell your insurance company.

The insurance company has a database where they can input these factors and determine the value of the vehicle. If you disagree with the actual cash value the insurance company has presented you are able to appeal. If you find a similar vehicle for sale that is more than what the insurance company offered you can present this to them and ask them to review. Of course the comparison needs to come from a reputable and trusted source such as dealership or online aggregator such as auto trader.

How much money do you get if your car is a write-off?

If your vehicle is a total loss the insurance company will write you a cheque for the actual cash value of your vehicle (minus the deductible if it is applicable). If you want to keep your vehicle despite it being considered a total loss, you do have that right but you would need to pay the amount the insurer would have received for the salvage of the vehicle.

If your vehicle is currently being leased or financed and your vehicle is deemed a total loss the insurance company will send the cheque to the leasing or financing company equal to the current market value of your vehicle. Here is the thing, if the settlement cheque is less than the amount your currently owe on the vehicle you will need to pay the remaining balance out of your own pocket.

What vehicle can I drive in the meantime?

If you write-off your vehicle you may be left without another car to drive. It is a good idea to carry endorsement 20: loss of use on your car insurance policy. This provides a rental car for you should your vehicle be involved in a claim. If you don’t have this coverage you will need to find your own means of transportation. Here is an important thing to note when it comes to the loss of use portion of your policy. Every company treats this coverage differently. Some companies assign a monetary value. Lets say on your policy you have purchase a $2000 limit in coverage for loss of use. This means you can rent a vehicle from your insurance coverage until the $2000 threshold is met. If it costs $100/day to rent the vehicle, this means you would only have coverage for 20 days before you would have to start paying out of your own pocket. Likewise some companies assign a predetermined length of time such as 30 days. Meaning there is no monetary value associated but after 30 days you would need to pay out of your own pocket if you need to continue using a rental car. This means you need to be proactive in that time frame in making plans to get yourself a new vehicle.

Hopefully you never have to experience a total loss but if you do, we are here to help!

No comments found.
Anonymous User

Leave a Reply

Your email address will not be published. Required fields are marked *


You Might Want to Read

Meet the Dougallers: Conor Hache
Stepping up next to the tee block, he hails from Prince Edward County, he’s a two time Club Champion at Bay of Quinte Golf and...
Welcome M.B. Kouri Insurance Brokers to the McDougall Insurance Team!
We are thrilled to announce that we have merged with M.B. Kouri Insurance Brokers Ltd. in Tamworth, Ontario! As of November 1st, 2023 we have...
Why You Should Get Homeowners Builders Risk Insurance
Owning a home is a huge responsibility and investment, that’s why you have to be responsible when it comes to protecting it. And if you’re...
Request a Free Quote

It’s simple and won’t take long.

Get a Quote800-361-0941

Person standing, looking down at laptop