September 21, 2023


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What Is Meant By Constructive Total Loss In Motor Insurance? 

Total Loss in Car Insurance: Everything You Need to Know

When referring to a car, the term “constructive complete loss” is used to describe substantial damage done to the vehicle, such that the costs of repairs would equal or exceed the value of the motor if it were insured. A situation is considered a constructive total loss if the motor insurance carrier’s liability is higher than 75% of the vehicle’s IDV. When two cars collide head-on, they frequently suffer this type of loss. 

Car insurance can provide a layer of protection against the risks associated with daily driving. In the event of a mishap, the compensation offered by insurancel providers will provide you with financial stability during a crisis. It is even more convenient now that insurance can be purchased online.  

To make an informed decision, compare the various insurance providers, the quotes they provide, and their network of cashless garages. However, one must understand some of the primary insurance terms before purchasing a policy. It will help you make an informed and thoughtful decision when selecting your policy. This article will discuss the concept of total loss and what it entails. 

What is total loss in automobile insurance? 

A total loss occurs when a mishap renders the motor beyond repair and use, and the repair cost far exceeds the Insured Declared Value offered by the insurance holder. In such cases, it makes no sense for the insurance company to repair the car; it is better to scrap it. 

What is motor insurance constructive total loss? 

The motor insurance policy determines the maximum compensation that will be provided to the insurance holder in the event of a mishap by calculating the car’s Insured Declared Value. This considers the car’s depreciation. A constructive total loss occurs when the repair cost exceeds the IDV offered by the insurance holder as a result of a mishap. 

 Advice: It is wise to use an online motor insurance calculator and evaluate the premium prices as per needs. 

What is the distinction between total and constructive total loss? 

In cases of total loss, the motor is no longer in any condition and cannot be repaired to make it usable again. Conversely, the constructive total loss is declared when the vehicle’s repair costs exceed the IDV by 75%. 

What should you do if your insurance company declares total loss? 

The insurance holder must surrender their motor to the insurance company once the motor insurance claim process has been filed and approved as a total loss or constructive total loss. They will no longer own the vehicle. All other car-related items, such as keys and documents, must also be returned. The insurance company will provide the insurance holder with the car’s IDV. 


In a nutshell, a total loss occurs when the vehicle is destroyed beyond being usable or repairable. A motor is considered a complete constructive loss when the cost of repairs is higher than either the IDV of the vehicle or 75% of the IDV of the car. This damage only happens in severe accidents, like when two cars collide head-on. In circumstances like these, it can be highly beneficial to have comprehensive insurance coverage.  

When acquiring motor insurance, it is vital to double examine the add-on covers that different insurance companies offer, as these can also significantly affect the amount paid for a claim. You must have a foundational knowledge of insurance. 

‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘ 

All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply 

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