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What will you do in the event that your car suffers significant damage from a crash? Do you get to repair all the damages that occur? Or Is a  new car another option? Most likely, your car insurance broker in Dubai will choose well enough on your behalf. In the end, they will decide whether you should fix your vehicle or declare it a total loss.

There is a risk of death and danger in car accidents. Unrepairable damage to vehicles does occur occasionally. This situation involves the use of total loss car insurance in Dubai. But what does it really mean?

What is a Total Loss?

A total loss occurs when a car is so badly damaged that restoring it would be more expensive than buying a new one. It's also used when natural disasters or theft result in damaged or stolen vehicles that aren't found until after replacements have been already made.

Technically, an auto insurer deems a car 'total loss' when the repair costs exceed a certain percentage of its value. Depending on the insurance companies in UAE, this percentage may differ.

However, you aren't the one who decides if the car belongs in a scrapyard or not. Motor insurance companies decide whether to repair a car or declare it a total loss. The steps to begin this are fairly similar to those of a typical claim. It is necessary for you to:

• Get a copy of the police report on your accident from the police.

• Let your insurance company know.

• Provide copies of your documentation (driving license, Emirates ID)

• Provide whatever proof you have found.

• Include the full cost of the repairs.

The insurance company will next compare the repair expenses to the car's stated real value in the policy. In cases where the damage reaches 80% of the value, some suppliers declare a total loss. Some people stop at 50%.

Car Insurance Total Loss Calculator

While determining auto insurance for a total loss, several parameters need to meet. An adjuster is first given a car inspection by the provider. Calculating the vehicle's actual cash value is the adjuster's responsibility. Decided upon by:

• Value of depreciation

• Production year of the vehicle

• Model and make of the car

• Mileage of the car

• Sustained wear and tear.

• Vehicle demand in the market

The method for computing total loss, therefore, becomes simple and clear:

• Calculating the ACV involves the market value of the vehicle in its pre-accident state.

• A total loss occurs when damage and repair exceed 50% of ACV

Each situation has its own specific variables that go into determining ACV. As a result, it is possible to achieve greater results. In some scenarios, minimal damage to a car results in its declaration as a total loss. They were no longer needed because they had been around for ten years. The same would be true if a brand-new car sustained significant damage.

What to Assume After a Total Loss Car Declaration?

Now, the insurance company will focus its calculation of indemnity on the insured value that existed prior to the policy's signing. Apparently, this is subject to a yearly depreciation of 20%. Indeed, this does not sound promising. But, It's not against the law.

Let's elaborate.

The length of time you've owned the coverage determines how much indemnity you receive. If your coverage is more than five years old, you can expect a reduced indemnity. If a total loss occurs within a year of purchasing the policy, you can able to negotiate a better price. The insurance provider will even cover the cost of a comparable replacement vehicle.

Takeaway

Get a suitable policy with collision coverage, though, and your chances will be greater. Higher collision coverage helps you mitigate the financial impact of a total loss. Hence, it is crucial that you carefully study your policy before signing. Even if it makes you uncomfortable, ask questions. Make research. Make comparisons online. Never accept a policy as it is.