What is a total loss?

If you are involved in an accident and your vehicle is severely damaged, your vehicle may be considered a total loss. A total loss refers to a situation wherein the repairs to the vehicle would cost more than the Actual Cash Value of a vehicle at the time of the loss.

For example, envision a situation where Joe's car is badly damaged as a result of an accident. Joe is okay, but his car is not. After the collision has been reported and the extent of the damage has been evaluated, it is determined that the cost to repair the vehicle is $10,000. However, the value of Joe's car is only $10,500 (with a salvage value of $600) so it's not really worthwhile to have the car repaired. In this instance, it would actually be less expensive for Joe's insurer to total loss the vehicle than to repair it.

Even if Joe's car was worth $10,000 and had a salvage value of only $400, it still may not be worthwhile to repair the vehicle. As with most things automotive-related, the preliminary assessment may not reveal the extent of the damage and the repair costs may increase at a later time. This is referred to as “hidden damage” and is often unknown at the time of initial inspection. Though it may be a borderline decision, it could still be regarded as a total loss.

There are many questions regarding the value of vehicles and you may have questions regarding the value of your vehicle in a total loss situation. Depending on your insurer, the value of your vehicle is determined based upon the pre-accident condition of the vehicle, the number of kilometres on the odometer, the options available on the vehicle and any damage that was not caused by the accident. Even the market is a factor, as the value of your vehicle will also be dependant on the market assessment of vehicles in the area in which the policy holder lives. Your insurance company should take all of these variables into consideration in determining the replacement cost of your vehicle.

In terms of dollars and cents, your reimbursement and deductibles will vary greatly depending on both your insurer and your auto insurance policy. If you have an Auto Insurance policy with CAA, we will do our best to ensure that your experience is as simple and hassle-free as possible. After paying your deductible, CAA Insurance will work with you to determine whether your vehicle will be a total loss and, if so, we'll do our best to make sure that the process is as straight-forward as possible for you, our customer.

In the event of a total loss, CAA Insurance will take a number of factors into consideration, including whether the car is leased, financed or wholly owned and we will reimburse the impacted parties as quickly as possible.

  • We will pay you, the policyholder, directly if you own the vehicle (your status as a contracted policyholder is determinative)
  • If the vehicle is leased, we will pay the leasing company directly.
  • If the vehicle is financed, we will work with you to determine the manner in which we need to proceed. If the finance company has status on your policy, payment will be co-payable to you, our policyholder, and the finance company.

If your vehicle is a total loss and you have rental reimbursement coverage through CAA Insurance, we will pay for your rental vehicle subject to your policy limits. Your claims adjuster will provide you with details on when you'll need to return the rental as they work to determine the value of your vehicle. They may also provide you with guidance as to when you should begin looking for a replacement vehicle, so be sure to ask your adjuster if you have any questions.

Please note that the information provided above is general-purpose information only. It does not extend your policy coverage beyond that which is written in your policy contract, so please refer to your contract for specific information.

If you are involved in an accident, please contact our Claims Department at 1-800-387-2656 to report your claim any time of the day or night on any day of the week.

To remove a vehicle from your CAA Insurance policy, or to add a new vehicle to your policy, contact our Customer Care Centre by telephone at 1-877-222-1717.

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