Understand in this article when it is considered a total loss of machinery or heavy equipment and find out what are the conditions for activating So Clean insurance in the event of an accident.
What is sinister?
Sinister, in the insurance market, is any condition previously established in an insurance contract that guarantees indemnification.
So, to activate the insurer, it is important to know the clauses and know what is covered and what is not.
For example, insurance for machinery might include fire, but leave out electrical damage and civil liability.
In this case, then, combustion in the engine would be considered sinister and result in compensation. On the other hand, an electrical failure or damage to a third party’s property would not be considered claims.
What is partial loss?
Partial loss is the name given to the accident that corresponds to less than 75% of the value of the insured property (house, car, or machine).
In the case of partial loss, the indemnity is released more easily by the insurer.
When the cost of repair is greater than the deductible, the insured will bear the deductible and the insurance company will pay the remaining amount.
If the value of the repair is less than the deductible, the insured will bear it on his own, as it makes no sense to inform the insurer of such a low value.
What is a total loss?
Total loss does not involve the state of destruction of the machine but corresponds to the cost of repairing the equipment due to a single accident exceeding the value of the machine stipulated in the policy. On average, the percentage is 75%.
That is, if the cost of repairing a machine valued at R$100,000.00 is R$75,000.00, the insurance company will consider a total loss (depending on the type adopted).
Any amount below that will be considered a partial loss.
After the declaration of total loss is approved, compensation is released in accordance with the terms of the contract. In the case of a total loss, there is no deductible.
Robbery and theft
In the case of robbery and theft, simple or qualified, there is no total loss, even if full compensation is applied for restitution of property.
Total loss of third-party machines and vehicles
An accident that results in a total loss of someone else’s vehicle or machine will only generate compensation if there is Optional Civil Liability coverage.
Compensation for total loss
When the total loss is confirmed, ownership of the machine or equipment is transferred to the insurer, which then pays the indemnity to the insured.
If the financing is still taking place, it is necessary to pay off the installments before releasing the indemnity. This can be done in two ways: either the insured pays the amount on his own or the insurance company does the accounting and pays the insured only the final difference.
With the impossibility of paying off the financing for different reasons, it is possible to exchange the vehicle in the guarantee of the financing with the value of the indemnity.
It is worth remembering that, depending on the type of condition for total loss, the final amount of compensation may differ from the value of the financed vehicle.
Total loss assessment on machines
There are a few steps to check the total loss on the machine. Below, we list the main ones:
expert inspection
It is important that, after the accident, the contractor contact the insurance company and ask for an inspection.
In some cases, the insured carries out the inspection himself, taking photos at the scene of the accident for later registration or taking it to a partner workshop of the insurance company.
At this stage, several points are observed, including the state of conservation of the machine and the data presented in the description of the accident.
workshop budget
After the expert’s inspection, the workshop inspects the machine and analyzes the damage for the budget.
The value includes all expenses due to the accident: electrical parts, mechanical parts, bodywork, painting, etc. Since damages prior to the activation of the insurance by the accident will not be covered.
Budget analysis by the insurer
If the workshop is a partner of the insurance company, this step is faster. Otherwise, different quotes may be required to confirm the values.
This is where the classification as total or partial loss comes in since with the total sum of the repair compared to the value declared by the machine, the loss condition is calculated.
In the event of disagreements on the value of services between the insurer and the repair shop, there is an extra stage of cost negotiation.
Formalization of the total loss opinion
Finally, the insurer’s opinion on the condition of the equipment is given.
There are two insurances for total loss in the market: referenced value and determining value.
Value referenced for total loss
In this case, the calculation of 75% of the value of the vehicle is based on the File Table (for automobiles) for that month.
For machines, the tables used are a market reference for type, make and model.
Value determined for total loss
The amount is fixed in the policy and stipulated at the time of signing the contract, normally based on the invoice for the machine or equipment. The percentage remains the same at 75%.
Do you have more questions about total loss or general insurance for machinery and equipment? Get in touch with our team!
