What is total loss in car insurance and how is it determined in Mexico?

Urban accident: severely damaged car and the importance of road safety

In Mexico, a total loss in car insurance is considered when the repair costs of the vehicle exceed a certain percentage of the insured value (usually 75%).

Types of total loss:

1. By damage: When the car is so damaged that it is not economically feasible to repair it.

2. By total theft: When the vehicle is not recovered or is found in irreparable condition.

Types of compensation:

1. "Valor Factura" (Invoice value): Is your car new? Insure it for the original invoice price, including VAT. Perfect for maintaining the initial value of your investment.

2. "Valor Comercial" (Market value): The price of your car based on the current “Guía EBC” at the time of the incident. It’s a reliable and widely used option.

3. "Valor Comercial" (Market Vale) + 10%: Want extra protection? This scheme includes a 10% addition to your car’s value according to the “Guía EBC.” Ideal for peace of mind in case of an unforeseen event.

4. "Valor Convenido" (Agreed value): Do you have a classic car or a high-end vehicle that increases in value over time? Protect it with an agreed value insurance, where you and the insurer agree on the amount when purchasing the policy. It’s a personalized scheme that adapts to your needs and gives you peace of mind.

Example:

If your car has an insured value of $300,000 and the damages amount to $250,000, the insurer will consider it a total loss and compensate you with the car’s value, minus the deductible and any unpaid premiums on the affected coverage.

Requirements:

• Report the claim.

• Provide documents such as the car’s invoice, tax payments, proof of license plate cancellation, a spare set of keys (if available), and the police report (in case of theft).

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At Sáas, we have a team of consultants who can guide you through the process of contracting and using your policy.