Britta beate schon is responsible for all legal issues at finanztip. The doctor of law and lawyer was head of the legal department at financial service providers such as telis finanz AG and interhyp. Previously, she taught and researched in japan as a DAAD junior professor for german and european law. She studied in munster, geneva, regensburg and leipzig. You can reach the author at britta.Schoen@finanztip.
- In case of a technical total loss, the car cannot be repaired. the residual value is zero.
- In the case of an economic total loss, the car may still be roadworthy, but the repair is no longer worthwhile because the value of the car is significantly lower than the estimated repair costs.
- As a rule, the insurance company will then settle the claim on the basis of the total loss: it will reimburse the replacement value less the residual value.
- There is one exception: the policyholder actually has the repair carried out professionally. But their cost must not exceed the replacement value by more than 30 percent. In this case, the insurance company pays the repair costs. However, the accident victim must continue to drive the car for another six months.
In this guide
You brake at a traffic light and an inattentive driver crashes into your car. Luckily nothing happened to you, but the car does not look good. The verdict of your car repair shop is scathing: total loss. And now? What pays the opposing car insurance? And do you have to new car buy?
What does "total loss" mean??
Total loss is not equal to total loss. A technical total loss exists when a repair is no longer possible. the residual value determined by the expert is 0 euro.
In the case of a total economic loss, the car may still be roadworthy. However, the repair is no longer worthwhile from a purely economic point of view, because the value of the car is no longer in proportion to the repair costs. But you don’t necessarily have to buy a new car or a used one.
If the question of fault has not been clearly clarified, you will have to argue with the insurance company about whether it will pay at all. If you have legal protection insurance in these cases, you at least don’t have to worry about attorney’s fees and court costs. Some insurers also offer pure legal protection insurance for traffic accidents, which is much cheaper than comprehensive legal protection insurance.
The amount paid by the other party’s car insurance company in the event of a total loss depends on the repair costs, the replacement value and the residual value.
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Replacement value and residual value
In order to be able to determine an economic total loss, you must have an estimate made of what the car is still worth and how expensive it would be to purchase an equivalent new vehicle.
replacement value – this is the amount you have to spend to buy a car of the value your old car had at the time of the accident. This is a considerably higher amount than what you would get for the same vehicle if you sold it. because the profit of the intermediary and his expenses are added to it.
the replacement value is to be determined according to local conditions. It is not sufficient to simply take it from the so-called schwacke list; however, it often provides an initial orientation.
residual value – This is the value of the vehicle after a car accident, which it has in unrepaired condition. At this amount you can still sell it. The residual value is usually determined by an expert by means of an appraisal. In the case of a liability claim, i.e. if you have suffered damage, you are free to choose an expert and hire one yourself.
There can always be a dispute about the residual value. The higher it is, the cheaper it is for the insurance company. As a rule, it is sufficient for the expert to obtain three offers as a basis for estimation, was the recommendation of the 40. German traffic court conference (BGH, ruling of 13. October 2009, az. VI ZR 318/08).
More about car insurance in our guidebook
- Compare every fall if your car insurance is still the cheapest one.
- Recommended way to the cheapest rate: first compare at verivox or check24, then get an offer at huk24.
What insurance pays in the event of a total loss
Vehicle owners and insurers often argue about whether the insurance company has to reimburse the repair costs or only the lower replacement cost. The law classifies cases of economic total loss into two basic categories:
Repair costs not more than 30 percent above replacement value
A total loss does not necessarily mean that you can not have your car repaired after all. This is possible as long as the professional repair is not more expensive than the replacement value plus a surcharge of a maximum of 30 percent – i.e. a total of no more than 130 percent of the replacement value (BGH, ruling of 2. June 2015, az. VI ZR 387/14). According to the Federal Court of Justice (BGH), only the gross repair costs count (ruling of 3. March 2009, az. VI ZR 100/08). The residual value remains out of consideration.
If the cost of the repair is between 100 and 130 percent of the replacement value, the injured party can only claim the cost of the repair if he continues to use the car for a longer period of time after the repair. Six months are sufficient (BGH, ruling of 13. November 2007, az. VI 89/07). However, the claim for reimbursement of the repair costs is not only due after six months, but already before that (BGH, decision of 18 December 2009). November 2008, az. VI ZB 22/08).
replacement value: 1.500 euro
repair costs: 1.800 euro (120 % of the replacement value)
residual value: 500 euros
If the cost of the repair is more than 30 percent higher than the cost of replacing an equivalent car, the insurance company does not have to pay for the repair. The repair would be economically unreasonable. the injured party is only entitled to the replacement value (BGH, judgement of 10. July 2007, az. VI ZR 258/06). The insurance company may deduct the residual value of the damaged car from the replacement value (§ 254 BGB).
The owner of the vehicle can also not claim the repair costs up to the amount of 130 percent of the replacement value, because nonsensical repairs should not be encouraged. As a result, the auto insurance company then does not have to reimburse the policyholder for the cost of the repair, but only for the difference between the replacement value and the residual value.
replacement value: 1.500 euro
residual value: 500 euro
repair costs: 3.000 euro (200 % of the replacement value)
Then a residual value revenue is to be imputed
If you have commissioned an expert to estimate the damage, you are generally entitled to use the residual value estimated by him when calculating the compensation (BGH, judgment of 6. April 1993, az. VI ZR 181/92). You do not need to be referred to higher offers from special residual value buyers that the insurance company holds out to you.
However, if you sell your old vehicle for a better amount than your expert’s estimate, the insurance company can deduct your profit from the money it reimburses you. The case is different if you trade in the broken car for a replacement car and the dealer offers you more than the amount estimated by the appraiser. Because this does not result in a better residual value, but in a hidden discount on the price of the replacement vehicle. The opposing insurance company must not be allowed to benefit from this.
If there are justified doubts about the correctness of the expert opinion, the insurance company may have the accident vehicle reinspected by an expert of its choice.
The insurance company must pay these additional items
In case of technical and economic total loss, the insurance has to replace the cost of a rented car. In the case of an economic total loss, you do not have to have actually used the rental car. You can also claim a so-called compensation for loss of use. Read more about this in our article compensation for loss of use instead of rental car.
The insurance company must also reimburse you for the costs incurred for the registration and deregistration and possibly for the disposal of the vehicle.
You are also entitled to compensation for the legal costs incurred in settling the claim. The insurance company pays this compensation because the injured party has the right to have a lawyer represent him for reasons of so-called equality of arms with the insurance company.
Recommendations from the legal protection insurance guide
the best way to find a suitable legal protection insurance is to use a comparison portal. From may to july 2021, we have examined these. Our recommendations from this test are: