Total loss

In property insurance, a total loss is property damage in which an item is completely destroyed and its restoration is objectively impossible or the item has been lost .

General

The concept of total loss plays especially in motor vehicles in the automobile liability insurance a role, but other things can suffer a total loss. From a technical point of view, it is a total write-off if something has been completely destroyed, its repair is objectively impossible and its restoration is impossible. The reimbursement of replacement costs is therefore the usual form of compensation in the event of a total loss of motor vehicles .

detection

When determining a total loss, the value conventions repair costs ( ), residual value ( ), reduced value ( ) and replacement value ( ) is important. The replacement value is the value before the accident , the residual value is the value after the accident. The terms are economically related: ${\ displaystyle RK}$ ${\ displaystyle RW}$ ${\ displaystyle MW}$ ${\ displaystyle WBW}$

{\ displaystyle MW = WBW-RW}

.

The reduced value is the difference between the replacement value and the residual value. The different types of total write-offs can be distinguished from one another using these terms.

Legal issues

The Federal Court of Justice (BGH) has dealt primarily with the total loss of motor vehicles. A four-step model can be derived from its case law .

${\ displaystyle RK <WBW}$

Repair costs up to the amount of the replacement value can be claimed without deducting the residual value.

${\ displaystyle RK = WBW-RW}$

If the repair costs are between the replacement value and the residual value, the injured party will be reimbursed for the repair costs (gross) without the continued use of the vehicle being important.

${\ displaystyle RK + MW = WBW \ cdot 130 \, \%}$

Repair costs which, plus any depreciation, are up to 30% higher than the replacement value, can be charged if the injured party has his vehicle repaired completely and professionally and continues to use the vehicle for at least six months.

${\ displaystyle RK> WBW \ cdot 130 \, \%}$

However, the repair costs may not exceed 130% of the replacement value, otherwise a total loss has occurred. If an injured party continues to use their accident-damaged but roadworthy and roadworthy vehicle in the event of a total loss, the residual value determined in an expert report for the regional market must usually be deducted from the billing according to the fictitious replacement costs.

species

Economic total loss of a Peugeot 806

Various types of damage are also distinguished from an insurance perspective. The classic write-off is the real or technical write-off. It is when the thing is completely destroyed and cannot be restored. If the general insurance conditions speak of "destroyed", a real total loss is meant.

The economic total loss, on the other hand, is related to the repairability. If the repair costs of a technically possible overhaul plus reduced value and residual value exceed the replacement costs, the repair is disproportionate from an economic point of view. An economic total loss exists if the repair costs are at least 30% above the replacement value.

When a total economic loss is ascertained, the cost calculation for commercial repairs carried out by specialist staff using new parts is the basis. Insofar as the repair can be carried out professionally in the private sector without incurring wage costs and with the use of used parts, a motor vehicle with an economic total loss may well be worth repairing from the subjective perspective of the injured party. Even in countries with comparatively high acquisition costs for new cars with otherwise low wages in the commercial repair sector, vehicle repairs that appear unprofitable can make economic sense. For this reason, heavily damaged vehicles with medium and high replacement values from countries with high workshop prices are very often sold to those with lower workshop prices, repaired there and then sold there or imported again on the used vehicle market.

In the case of motor vehicle liability insurance, there is also the spurious total loss , in which the repair costs of a technically possible repair (and any depreciation that may need to be replaced) for the vehicle are less than its replacement value (minus residual value), but a repair is unreasonable for the injured party .

Total loss and settlement of claims for damages

In the event of a total write-off, the injured party can usually not claim the repair costs as compensation , but only the replacement costs of an equivalent replacement item minus the residual value of the damaged item. An exception applies to motor vehicles, but not to fully or partially comprehensive damage: Under certain conditions, the injured party can claim up to 130% of the replacement costs (without considering the residual value) as compensation if the vehicle can be repaired completely and professionally for this amount.

According to the established case law of the Federal Court of Justice, the replacement costs usually (at least in the case of motor vehicle damage) represent a form of in rem restitution in accordance with Section 249 (2) BGB and no compensation in accordance with Section 251 (2) BGB. For total losses that occur after August 1st, 2002 (entry into force of the second law amending the provisions of the law on damages), this means that the replacement value is reduced by the sales tax contained therein if the injured party has not actually made a replacement and did so Sales tax has been incurred. The Federal Court of Justice has expressly approved this reduction in two rulings. A constitutional complaint lodged against the judgment of May 18, 2004 was not accepted by the Federal Constitutional Court - without giving reasons - for decision.

Total loss of an airplane

In an economic or technical total loss on a plane - often due to an aircraft accident - this is called a "hull loss" ( English Hull loss ).

International

In Switzerland , it is a total loss if the repair costs are higher than the vehicle value of the damaged vehicle before the damage occurred. In the case of comprehensive damage, the general insurance conditions of the relevant insurance policy apply to the total loss limit . As a rule, according to these provisions, the limit is 60 to 65 percent of the catalog price. If the fair value is lower, this is again the upper limit.

In Austria , a total loss is assumed if the expected repair costs exceed the replacement value of the vehicle by more than 10 percent. The repair costs are fully covered up to this limit. If a total write-off is found, the wreck value is usually determined via so-called "wreck exchanges" on the Internet. These are websites where traders can bid on the wreck. In the event of a total economic loss, the insurance does not pay for the repair of the vehicle, but compensation in the amount of the replacement value minus the calculated residual value.

Web links / literature

Wiktionary: total loss - explanations of meanings, word origins, synonyms, translations

Total loss: 130%, repair or total loss?
Literature on total write-offs in the catalog of the German National Library

Individual evidence

↑ Reinhard Greger / Martin Zwickel, liability law of road traffic , 2014, p. 611
↑ Reinhard Greger / Martin Zwickel, liability law of road traffic , 2014, p. 612
^ BGH, judgment of April 29, 2003, Az .: VI ZR 393/02 = BGHZ 154, 395
↑ BGH, judgment of 23 November 2010, Az .: VI ZR 35/10 = NJW 2011, 667
^ BGH, judgment of February 15, 2005, Az .: VI ZR 70/04 = BGHZ 162, 161
^ BGH, judgment of March 3, 2009, Az .: VI ZR 100/08 = NJW 2009, 1340
^ BGH, judgment of November 30, 1999, Az .: VI ZR 219/98 = BGHZ 143, 189
↑ Martin Schauer, in: Wulf-Henning Roth / Martin Schauer / Hans-Peter Schwintowski / Ansgar Staudinger / Wolfgang Voit et al. (Eds.), Berlin Commentary on the VVG , 1999, § 55 Rn. 17th
^ Rolf Schnitzler, The damage as a performance limit in property insurance (§ 55 VVG) , 2002, p. 46
^ Rolf Schnitzler, The damage as a performance limit in property insurance (§ 55 VVG) , 2002, p. 47
^ BGH, judgment of February 15, 2005, Az. VI ZR 70/04
^ BGH, judgment of April 20, 2004 , Az. VI ZR 109/03 and BGH, judgment of May 18, 2004 , Az. VI ZR 267/03, full text.
↑ BVerfG, Az. 1 BvR 1592/04.

[1] Reinhard Greger / Martin Zwickel, liability law of road traffic , 2014, p. 611

[2] Reinhard Greger / Martin Zwickel, liability law of road traffic , 2014, p. 612

[3] BGH, judgment of April 29, 2003, Az .: VI ZR 393/02 = BGHZ 154, 395

[4] BGH, judgment of 23 November 2010, Az .: VI ZR 35/10 = NJW 2011, 667

[5] BGH, judgment of February 15, 2005, Az .: VI ZR 70/04 = BGHZ 162, 161

[6] BGH, judgment of March 3, 2009, Az .: VI ZR 100/08 = NJW 2009, 1340

[7] BGH, judgment of November 30, 1999, Az .: VI ZR 219/98 = BGHZ 143, 189

[8] Martin Schauer, in: Wulf-Henning Roth / Martin Schauer / Hans-Peter Schwintowski / Ansgar Staudinger / Wolfgang Voit et al. (Eds.), Berlin Commentary on the VVG , 1999, § 55 Rn. 17th

[9] Rolf Schnitzler, The damage as a performance limit in property insurance (§ 55 VVG) , 2002, p. 46

[10] Rolf Schnitzler, The damage as a performance limit in property insurance (§ 55 VVG) , 2002, p. 47

[11] BGH, judgment of February 15, 2005, Az. VI ZR 70/04

[12] BGH, judgment of April 20, 2004 , Az. VI ZR 109/03 and BGH, judgment of May 18, 2004 , Az. VI ZR 267/03, full text.

[13] BVerfG, Az. 1 BvR 1592/04.