What Are the Compensation Standards for Total Loss of a New Car?
2 Answers
The purchase price of a new car includes the vehicle purchase tax. Therefore, the purchase price of the new car at the time of the incident = the purchase price of a similar model in the market at the time of the incident × (1 + vehicle purchase tax). The standard for total loss of a car is when the vehicle is severely damaged or the actual repair cost reaches or exceeds 80% of the insured car's actual value. In such cases, it can be considered a total loss, and the insurance company is required to compensate for the full loss of the insured car. Amount of insurance compensation: For single-vehicle accidents, you can report the claim afterward, but it must be within 48 hours. If the accident scene is not preserved, the insurance company will compensate 70% of the assessed loss. Generally, insurance companies require claims to be reported within 48 hours. After reporting, an adjuster will be sent to the scene to determine if the damage traces match. If they match, the claim is usually approved. Insurance considerations: When reporting to the insurance company, you can move the car a short distance from the incident location. The insurance company can still assess the damage based on the scene's height and traces, but the claim must be reported within the time frame specified by the insurance company. If the report is not timely, additional deductibles may apply.
I just bought a new car not long ago and was curious how much I could get if I was really unlucky enough to total it in an accident. Generally, insurance companies first assess the car's actual market value, which is what it's worth now, not the invoice price. New cars depreciate pretty quickly after a few months, so the value drops. If the accident is so severe that repairs cost more than buying a new one, it's considered a total loss payout. The insurance company might compensate based on the invoice price at the time of purchase, but it depends on whether the policy has a new-for-old clause. If not, they'll pay the depreciated value—for example, after six months, you might only get 90% of the original price. A friend of mine learned this the hard way; his new car was totaled, and the payout wasn't enough to buy the same model again. So, I recommend adding GAP insurance or comprehensive coverage when buying car insurance to cover the difference and avoid shelling out big money later. Regularly chat with your insurance broker to ensure you understand the details and don't get caught off guard at a critical moment.
