Insurance declares car a total loss in Saudi? READ THIS!

If you’re here, chances are you’re trying to get a straight answer to an important question: What does a total loss mean in a car insurance claim? And how much money do you get after a car insurance company in Saudi Arabia decides your car is now a “total loss”

To save you from thinking the unthinkable and many potential frantic searches, here’s what you need to do if you ever find yourself in a similar situation..

What is total loss?

In car insurance claims, In Saudi Arabia, getting a “Total Loss” notice from a car insurance company means your car is going to be a salvage car.

Why is car insurance calling my car a total loss?

When your insurance company declares your car a “total loss,” it means they will pay you the car value instead of paying for the repairs. This happens for one of 2 main reasons:

1. The car’s too damaged to fix (Technical Total Loss )
   
   This means the car is either in a very bad shape or impossible to be safe again. Like if it were in a fire, a flood, or a serious accident.
   
   
2. Car repair is too expensive (Economic Total Loss)
   
   If Taqdeer’s repair cost exceeds 50% of the car’s value (car value written in your policy), the company may decide it’s not economically worth it to pay for repairs—even if the damage is not that bad.

In both situations, the insurance company issues a Total Loss Letter, confirming the car is going to be salavage and they’ll pay the car value instead of covering repairs.

Signs your car might be a total loss

• Airbags deploying
• A rollover accident
• Structural chassis damage
• Car engine failure

How much do you get if insurance considers your car a total loss?

Your payment = Insured Value − (Depreciation + Deductible)

Example:

Say your car was insured for SAR 85,000. SAR 85,000 − (SAR 10,000 depreciation + SAR 500 deductible) = SAR 74,500

Keep in mind: if the incident isn’t covered under your policy, the insurer has the right to reject the claim altogether.

What if you have a car loan or installments?

If you have a car loan or installments in Saudi Arabia, things work a bit differently. When insurance declares the car a total loss:

• Bank gets the money. The money goes straight to the registered owner—(your bank or finance company)
• The bank has the right to collect the car.
• Any installments you’ve already paid are treated as rental payments

⚠️ It’s a minor accident… why the total loss?

Most people are shocked by a total loss for one big reason: The insured value of the car is too low!

When buying insurance, some people lower their car’s value in the policy to get a cheaper monthly payment. (Or they just don’t pay attention to this when they buy car insurance online).

What happens if my car is a total loss in Saudi Arabia?

Unhappy with a total loss claim? Here’s what to do

To avoid a total loss, you can ask your car insurance company for an external repair authorization. With the authorization, you can repair the car yourself and submit invoices to get your money back—as long as repair costs don’t exceed 50% of the car’s value (or another agreed limit).

If you’re unhappy with how much money you’re going to get, you can file an objection through Taqdeer. If you’re still unhappy, you can get help from the Insurance Disputes and Violations Resolution Committees.

Total loss shouldn’t mean starting from zero!

Even if the worst happens, having car insurance means the money you get back will be enough to get you another car. But the real lesson is this: Don’t make the mistake of choosing the cheapest car insurance. The cheapest option can mean getting less than what your car is truly worth, or it might mean you’re left with nothing if the accident was your fault, or if the car is stolen, burned, or flooded.