Totalschaden

Totalschaden is a term used in insurance and automotive contexts to describe a situation in which a damaged asset, most commonly a motor vehicle, is considered a total loss. This occurs when repair costs or the overall damage make restoring the vehicle uneconomical relative to its value, or when the insurer determines that repairing it is not viable for other reasons.

In practice, the determination of a Totalschaden depends on policy terms and national regulations. A threshold is often used, such as a certain percentage of the vehicle’s current value (for example, 60–80%), but the exact rule can vary. An independent or insurer-appointed expert assesses the damage and estimates whether repair would be sensible. If a Totalschaden is declared, the insurer typically settles with the policyholder based on the vehicle’s value before the loss (the Zeitwert or Wiederbeschaffungswert, depending on the policy) and minus any deductible. Salvage value is commonly deducted or handled separately, and ownership of the damaged vehicle may transfer to the insurer, who may sell it to a salvage yard or dismantler.

The outcome often includes the vehicle being marked as a salvage vehicle and barred from regular road use until certain conditions are met. Policyholders may retain the right to purchase the vehicle back at a salvage value in some cases, but this usually affects the payout amount.

Totalschaden procedures aim to avoid costly repairs when the vehicle’s value has been eroded by the damage, while providing a clear framework for settlement and disposal.