In the event that a vehicle is involved in a traffic accident and is either completely destroyed or its repair is deemed economically unfeasible, the owner is entitled to claim from the at-fault driver and their insurance company, among other things, compensation equal to the value of the vehicle prior to the accident, minus the value of any salvageable parts, due to the total loss of the vehicle.
Total loss of a vehicle generally takes two main forms. The first form is physical or actual total loss, while the second form, a combination of two parameters, is economic and technical total loss. There is also a third case, which concerns the near-total destruction of a nearly new vehicle.
In the first form, the physical or actual total loss, the deformation of the vehicle’s body is such that repair is technically impossible.
In the second form, the economic and technical total loss, the vehicle may be technically repairable, but the cost of parts and labor is at least equal to or significantly exceeds the vehicle’s market value before the accident (taking into account depreciation). In such cases, the repair is deemed economically unfeasible. Moreover, if a vehicle has been damaged in critical areas affecting its roadworthiness, and even if repair is economically feasible, it cannot be guaranteed that it can be restored to a condition safe for circulation, courts have frequently recognized such vehicles as total losses.
In cases of total loss as described above, the injured party is entitled to claim compensation equal to the value of the destroyed vehicle immediately prior to the collision. However, the injured party must either return the damaged vehicle to the liable party or reduce the claimed compensation by the value of the remaining salvageable parts.
To calculate the market value of the vehicle before the accident, the purchase price is taken into account, reduced by the percentage of normal wear and tear caused by usual use up to the date of the accident.
It should be emphasized that if the destroyed vehicle was used for professional purposes, such as a taxi or commercial truck, the injured party is entitled not only to compensation for the total loss but also cumulatively to compensation for lost profits. This means they may claim from the liable party and their insurance company the profits that can be reasonably proven to have been expected from the vehicle’s use prior to the accident, as estimated by the court according to usual circumstances. Irrefutable evidence includes the claimant’s tax returns. For a court to accept a claim for lost profits, it is essential that the relevant claim has been notified to the competent tax authority; otherwise, the claim will be dismissed as inadmissible.
Additionally, positive damages that the injured party may claim in the case of total loss include expenses for renting another vehicle.
It should be noted that all the above rights can only be exercised through the submission of a properly drafted lawsuit, in which all details of the accident, the costs for parts, repair, and painting, as well as the market value of the destroyed vehicle, must be fully documented in order to prove beyond any doubt the total loss. For this reason, the injured party should have either a cost estimate from a repair shop or an expert appraisal detailing the required repairs and their costs.
