What Does a Total Loss Vehicle Mean?
2 Answers
A total loss vehicle refers to an insured vehicle that is completely destroyed or severely damaged, where the repair costs exceed the vehicle's actual value at the time. The calculation formula for a total loss vehicle is as follows: 1. If the insurance amount is higher than the actual value at the time of the incident: Actual compensation = (Actual value at the time of the incident - Residual value) * (1 - Deductible rate). 2. If the insurance amount is equal to or lower than the actual value at the time of the incident: Actual compensation = (Insurance amount - Residual value) * (1 - Deductible rate). Relevant information about total loss vehicles includes: 1. The repair costs exceed the vehicle's actual value at the time, but the vehicle still has value, so the repair shop can purchase the vehicle, repair it themselves, and then sell it in the used car market. 2. Total loss vehicles can be traded after obtaining approval from the insurance company. The disposal method for total loss vehicles can be auction, and most repaired total loss vehicles enter the used car market.
My own car was flooded last year, and after inspection, the insurance company said the repair costs were several thousand dollars higher than the car's market value, so it was directly classified as a total loss. This means the car is totaled, and the insurance company compensated me based on its residual value, but it can no longer be driven on the road. Actually, total loss vehicles aren’t just due to accidents—they also include cases like fire or severe crashes. I used the money to buy a new car, and the old one was dismantled and recycled. It’s important to note that sometimes people try to buy cheap used total-loss cars to repair themselves, but the risks are huge, like frame deformation or electrical issues, making them unsafe to drive. My advice is, if your car suffers major damage, report it to the insurance company immediately—don’t delay—to protect yourself and avoid trouble. Never attempt to drive a total-loss car; the risks are far too high.
