Glossary · Terms explained simply
Glossary
The most important terms around vehicle reports, claims settlement and vehicle valuation — explained briefly and clearly.
- 130% rule
- Exceptionally allows the full repair of an economic total loss if the repair costs exceed the replacement value by no more than 30% and the vehicle is repaired professionally and completely.
- Actual settlement
- Settlement of the actual, proven repair costs after the repair has been carried out, including VAT.
- Contributory liability / partial fault
- Occurs when both parties involved in the accident bear a share of causing it. The costs are then split proportionally between the insurers.
- Current value
- The calculated value of a vehicle taking into account age, condition and market trends — mainly relevant for comprehensive insurance.
- Diminished value
- The merchantable loss in value a vehicle retains after an accident despite a professional repair, because the market values accident vehicles lower.
- Economic total loss
- Occurs when the repair costs exceed the replacement value (minus residual value) and a repair is no longer economically worthwhile.
- Free choice of expert
- The right of injured parties to choose the expert for the damage assessment themselves — the other party's insurer may not dictate an expert.
- Loss-of-use compensation
- Compensation for the time a vehicle cannot be used due to the accident, provided no rental car is used.
- Notional settlement
- Payout of the repair costs calculated in the report without actually having the vehicle repaired — usually without VAT.
- Replacement value
- The cost that would be needed to acquire an equivalent replacement vehicle on the used-car market — the central reference figure in a total loss.
- Residual value
- The amount a damaged vehicle would still fetch in its current condition, for example through sale to a specialized buyer.
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