A term used by some insurance companies to describe a collision or other damage claims where the claim amount was equal to or greater than the full market value of the vehicle, and/or the vehicle’s structural integrity was severely compromised (see: Why does the estimate show “total loss,” but the vehicle was neither branded as “salvage” or “rebuilt?”).
Some insurance companies offer policy amendments which automatically result in Total loss – such as 43r, and/or 19a – and/or may file a claim as Total Loss for other business reasons. This can result in claim amounts that greatly exceed the actual dollar value of the damages to the vehicle but matches the vehicle’s fair market value and/or MSRP. Typically, in these scenarios an insurance company will take ownership of the vehicle for future resale.
A CARFAX Canada report and/or vehicle seller may show estimate and/or repair record amounts that are lower than the claim amount. Check with the seller to see if they have any repair documentation that shows cost to repair and/or ask them if vehicle was acquired through an insurance-based auction.
For more information on variances in estimate and claim amounts, please see: What is the difference between an estimate and a claim?
Before you buy a used car, we recommend that you get a CARFAX Canada Vehicle History Report, take a thorough test drive and have the vehicle inspected by a qualified mechanic or auto technician to make sure the vehicle is functioning properly.