Total loss for Volkswagen Polo 2010 model (Insurer:Reliance General insurance)

[varundp]

Hi, One of my friends met with an accident in his Volkswagen Polo. He hit the divider on the road and the car took a hit from the frond end (bottom). Now we have been to the Volkswagen facility and the initial estimation for the car, looking at outside damages (bumper, fender, radiator, condenser, consumables, labor charges, timing case, muffler, etc) was Rs. 2,31,000. The Volkswagen manager told us that he suspects engine damage and if that is the case then the engine value would be approximately Rs. 3,00,000. This when added to the initial estimation of Rs. 2,31,000 comes to 5,31,000.

The problem is that the IDV of the vehicle according to the policy is Rs. 3,84,000. The manager and the insurance people are saying that if the estimate is under 75% of IDV, they can fund our repairs if it exceeds then they would declare it as a total loss and would give us some money.

The problem is that the initial estimation is only on the basis of looking from outside and they have not opened the engine yet. They (Volkswagen) need around Rs. 21,000 for opening up the engine in labor charges. The insurance says go for a total loss before opening the engine, if the engine is opened and there is a lot of damage then they would not be liable. There is also a concept of Depreciation on metal parts (10%) and salvage value (5%) on parts. The Insurance is not ready to reduce this so it is certainly adding more burden to us. Please suggest if we should go ahead and ask them to open the engine and look for any damage there or declare the vehicle as total loss and get the IDV - depreciation.

All you inputs would be valuable. Please let me know if you need clarity on anything I have written. P.S.: We would appreciate your comments or someone you know at Reliance General Insurance who we can talk to and get out of this mess. Really appreciate the time and effort you took to read this entry and for replying back to me. Thanks. Varun

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[Madhura]

How do anybody know what is inside the engine, without open it? It's like gamble.

[Manish_Kumar]

If the total of the repair comes under 75% of the IDV, it is not total loss and the vehicle is repairable. So whats the problem here. Get it repaired. If not then you will be eligible for total loss. I see nothing wrong here.

[gegonbones]

First of all show the car to an outside garage i.e not VW. Forget about the warranty. Check the damages there. Don't touch engine at all. Check everything for yourself, don't go bu what they say. You can get the radiator repaired. The engine at the most must have stalked due to the gasset getting cut.

[varundp]

Thanks for the comments folks. I sent and had a discussion with Reliance GIC today. They were saying that anything that is damaged inside engine is not the liability of the insurance company and they would not consider the car for total loss (as the estimate 231000 is less than 75% of the IDVof 384000). They said that the engine is usually a wear and tear item so according to IRDA they are not liable. Now they suggested I go either go for a repair or for a net off salvage sale. They said they would intimate agencies who would bid for the car in case of net off salvage case and we would get the money from the highest bidder plus the insurance company's liability.

In case of repair they would only be liable to 231000-(50% depreciation on plastics parts)-(20% depreciation on metal parts)-(all consumables used in the process, like bearings, sealing, packing, coolant, oil, A/c air, A/c charging etc.) this would come to somewhere around 80000 to 90000 and we would get back around 140000 from insurance.

I would ask for your expert opinion on this issues. They also said that if anything in the engine is gone, then we have to fix it using our money and they would not be liable for it. Is it right?

[Madhura]

If the engine is damaged at the time when the other parts of the vehicle is damaged then it's covered. IRDA has not part in the regulation of survey of the car, the company official say these things. If you are not happy with the present surveyor, you may ask for another surveyor from the insurance company. Hope this helps!

[damon]

well to start with i would liketo say that you can go for repairing the vehicle or can go for total loss. Actually, i too faced a similar problem, in november 2010, i bought Maruti Swift ZXI and in Arpil this year, i had a terrible accident which damaged the vehicle and belief me the damages were heavy e.g. Chasis broken, engine got cracked, Gear box broken, dashboard broken, steering's shape changed into oval and many more damages were there.

I bought it for Rs 6,03,000. After that i went to my maruti dealer and he said when the cost of repairing the vehicle exceeds the amount of insurance then they consider to take the vehicle under total loss and i thought it will be beneficial at that time and i do not reget on my decision and would like to suggest you the same. Rest depends on you. I hope this help and your friend recover fron his loss soon.

[Manish_Kumar]

Damon - When the vehicle is damaged extensively and the cost of its retrieval and repairs is more than the 75 % of IDV, it is treated as total loss claim. In all such claims insurer offers the IDV less the cost of salvage if the damaged vehicle is retained by insured or else the insurer takes possession of salvage and settles the claim for IDV.
Insured cannot choose repairing or total loss.