How much does the insurance give me for my damaged car?
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So, after the notification of total loss, you will be wondering what rights you have and how you can exercise them, but before explaining it to you, it is necessary that you know against whom you will have to exercise them.
The resulting value in most cases will be similar to the market value of the vehicle, i.e. the purchase price of the vehicle at the time of the accident. If the resulting value is much lower than the market value, the claim should be made on the basis of the market value of the vehicle.
The market value is the amount that would be obtained from the sale of the vehicle at the time of the accident. To know this value we will have to go to companies specialized in vehicle appraisals such as Ganvam or Eurotax.
This claim almost always ends satisfactorily, but when the repair value exceeds by far the value of the vehicle there is a risk that the judge considers it as an uneconomical operation and can only recover part of the amount of the invoice.
In the event of a serious traffic accident, a vehicle may be declared a total loss either because it is technically impossible to repair it without maintaining safety guarantees or because the cost of repairing it is greater than its value. Some insurance companies even classify as a total loss any property whose repair cost exceeds 75% of its value. The other possibility is that, in the event of theft, the car may not reappear or may be totally burned. In these cases, how to calculate the value of the car for the purpose of compensation?
In this case, insurers must comply with the principle of indemnity derived from article 1902 of the Civil Code: you are entitled to be compensated in full since you cannot be left in a worse situation than the one you were in prior to the loss. The DGSFP establishes that the compensation received by the third party must “include the repair of the damaged vehicle or, as the case may be, sufficient compensation to acquire a vehicle of the same characteristics and also compensation for the damages derived from the impossibility of using the vehicle until the compensation is paid”.
Total loss write-off
If the vehicle suffers a fire or flood, it is usually appraised and declared a total loss, since repair is unfeasible and would compromise its safety. In most cases it is covered by insurance, but in other cases, the compensation consortium may compensate you for your flooded or burned vehicle.
If you have a comprehensive insurance policy, the insurance will indemnify you. But you will have to do something with the remains of the vehicle. There are different options that you can do with your total loss vehicle.
The insurance companies usually deduct from the indemnity the remains of the car or “the scrap”, since for them it is much easier not to take charge of the remains and to have to take them to the scrapyard, leaving this way so that the user is who is in charge of taking the damaged car to the scrapyard.
What is a declared loss
Based on Art. 58 of Law 58/2003, of December 17, 2003, General Tax Law, which establishes market value as a valid means of verifying values for tax purposes, a solution also adopted by the General Tax Regulations of the Historical Territories of Bizkaia, Alava, Gipuzkoa and the Community of Navarra, on January 30, 1987, the Ministry of Finance published an Order with the purpose of establishing the average sales prices to be used as a means of verification for Transfer Tax and Stamp Duty.
But in my opinion, it is absolutely relevant to emphasize that the Supreme Court has not determined that percentage of affectation, and it is not by chance. Quite the contrary, the judgment itself indicates that it will be the trial judge who will have to weigh all these circumstances (the amount of administrative expenses, difficulties in finding a similar vehicle on the market, uncertainty about its operation, among others) to determine what that percentage is.