In our previous article, we discussed third-party liability insurance (OC) compensation for partial vehicle damage. To further clarify, in today's article, we'll explain what a total loss is, when it occurs, and how the amount of compensation is determined.
Total loss – what is it?
A total loss is a concept that refers to a situation where the cost of repairing a damaged vehicle exceeds its market value on the date of the loss. In such a case, the repair is deemed economically unjustified, resulting in the classification of the loss as a total loss. The case law of the Supreme Court and common courts does not preclude the possibility of considering the repair cost exceeding (albeit only slightly) the vehicle's value as economically justified.
Cost-effectiveness of repair
A key issue in the context of a total loss is the cost-effectiveness of repairs. The Supreme Court has determined that if the cost of repairs exceeds the vehicle's pre-accident value, compensation is limited to the difference between the vehicle's pre- and post-accident value. In practice, this means that the injured party receives compensation to compensate for the loss they suffered, but only up to an amount equal to the difference in the vehicle's pre- and post-accident value.
How is the amount of compensation calculated?
Calculating the amount of compensation in the event of a total loss involves determining the difference between the vehicle's pre-accident value and the value of the wreckage. The wreckage remains the property of the injured party, who may dispose of it as they wish. If the wreckage has no market value, the injured party is entitled to compensation equal to the vehicle's full pre-accident value.
Can you appeal the insurer's decision?
If the injured party disagrees with the insurer's decision regarding a total loss, they have the right to appeal. To ensure an appeal is effective, it's important to gather full documentation regarding the vehicle's condition and value before the accident and to commission an independent appraiser's valuation. An appeal should be well-prepared, contain all the necessary evidence, and present strong arguments challenging the insurer's assessment. Therefore, it's advisable to seek professional assistance.
For more information, please contact us. We will assist you at every stage of the process to obtain the compensation and redress you deserve.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of August 27, 2024
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