If insured plant or equipment is damaged beyond repair or is uneconomical to repair, the insurer may declare it a total loss.

How is a total loss assessed? #

The insurer may consider:

• Extent of the damage
• Estimated repair cost
• Equipment value
• Availability of parts
• Whether safe repairs are possible
• Settlement basis under the policy
• Applicable policy conditions

Settlement may be based on:

• Market value
• Agreed value
• Another valuation method specified in the policy

The applicable excess and other policy deductions may also affect the settlement.

What if the equipment is financed? #

The financier may be involved in the settlement and may receive some or all of the payment.

The insurance settlement does not necessarily equal the outstanding finance balance.

Can other costs be covered? #

Depending on the policy, additional benefits may be available for matters such as:

• Finance shortfall
• Continuing finance payments
• Substitute equipment hire
• Additional operating costs
• Recovery or towing

These benefits should not be assumed to apply automatically.

Salvage arrangements can also affect who retains the damaged equipment following settlement.

Use our Claims page if insured machinery has been seriously damaged or stolen.