What Is Total Loss All About? Will My Insurance Company Also Cover The Goods That Were Inside?

If you have ever been in a situation where damage has occurred to the property that you took insurance on, then you may come across the word total loss.

What does that mean in terms of insurance and claims? The more you will be thinking about is not just the vehicle, but also the belongings you had inside. 

Does Insurance cover personal belongings or not? I am sure this is the question you have in your mind.

Let’s discuss the answer in this article

What Does “Total Loss” Mean?

In the insurance language, total loss means any of these two scenarios.

1. The cost of repair exceeds the actual cost of the vehicle at the time of loss
2. The vehicle has gone beyond repair, or repairing is not possible.

Simple words, if the cost to fix the vehicle is more than its worth, then it is a total loss.

Basically, if the damage is more than 70%-80%, then many insurance companies declare it as a total loss, but this also depends on the insurance company and your location.

How Much Can I Claim Insurance In Case Of Total Loss

Goods insurance cargo

If your insurance company declared total loss, they will first calculate the actual cash value of your vehicle before the accident. Then they will subtract the portion you are responsible for, which is deductible. 

Then they will issue the payout equal to the actual cash value minus the deductible. Sometimes they will subtract the Salvage value If in case you choose to keep your damage item with you.

Real-time scenario: If your truck’s Market value is 7 lakhs before the accident, and the deductible value is Rs 100000, you will receive 6 lakhs from the insurance company if it is determined as a total loss.

What Will Happen To The Personal Items Inside

• Vehicles

Most of the standard insurance policies will cover the vehicle alone, not your personal belongings, so if you have a camera, laptop, or any other items inside the vehicle, the insurance companies will not cover those items

• Goods

If your vehicle is used for commercial purposes and you are in an accident, the insurance will not cover the goods inside your vehicle. In this case, you need transit insurance or Marine cargo insurance to cover your goods.

This kind of insurance is specialized for goods that are being transported.

What To Do After a Total Loss

Follow the steps mentioned below in case of total loss.

1. Report your Insurance Company immediately for a claim
2. Collect proofs in the form of photos and report to the police (if needed)
3. Whether your insurance has an add-on policy for personal belongings or goods, if you have then start the procedures to claim it.

Final Thoughts

Loss of your vehicle is a frustrating event, and we understand that. But you should be well aware of your Insurance claim, whether it covers your personal belongings or not. This will help you to plan things better. Always review the policy details and ask questions whenever you have doubts. 

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