What a total loss is and what your options are

Few phone calls feel worse than the insurer telling you your car is a total loss, or a write-off. Many people assume the car has been wrecked, but that isn’t always the case. Usually it’s an economic decision: repairing it would cost more than the insurer considers the car to be worth.

How it’s decided

After the accident, a loss adjuster assesses the damage and works out what the repair would cost. That figure is compared with the value attributed to the vehicle. If the repair exceeds that value, or the percentage of it set in your policy, the car is declared a total loss. It can also be declared when the damage affects the structure in a way that makes repair unsafe.

What your car is worth to the insurer

This is the key point, and it depends on who was at fault and on your contract:

• Pre-accident value (‘valor venal’): what it would cost to buy an identical car of the same age and in similar condition just before the accident. It is the lowest value.
• Market value: similar, based on what equivalent cars sell for on the used market.
• New-for-old value: some comprehensive policies pay this during the first few years of the car’s life.

When another driver caused the accident and you claim on their insurance, compensation commonly includes the pre-accident value plus an additional amount for the inconvenience of having to find another car, known in Spain as ‘valor de afección’. How it’s worked out depends on the case; if you don’t agree with the figure, you can challenge it.

Your options

1. Accept the payout and hand over the car. The insurer keeps the vehicle and handles its deregistration or sale as salvage.
2. Accept the payout and keep the car. Many insurers allow this, deducting the salvage value. You can then repair it yourself if it’s worth it.
3. Dispute the valuation. You can provide evidence of your car’s real value: adverts for equivalent cars, service invoices, extras, overall condition. And, if necessary, ask for a second assessment by your own adjuster.

When does it still make sense to repair?

Sometimes the insurer’s figure falls short of what it would cost to find an equally reliable car, especially if yours is well looked after or has low mileage. If you keep the car, get a realistic repair estimate and consider whether the repair, with new or equivalent-quality parts, leaves the car safe. If the structure is affected, the repair must be done on a chassis jig and with proper guarantees.

What not to do

• Don’t sign the settlement without reading carefully what amount you’re accepting and what happens to the car.
• Don’t accept the first figure if it seems low: ask how it was calculated.
• Don’t forget to remove your personal belongings and, if you’ve added equipment, tell the insurer.

At Green Car Service Tenerife we help you understand the valuation, give you an independent estimate and, if you decide to repair, do it with the right jig and equipment. There’s more detail in our total loss guide and our loss assessment guide.