Total loss is becoming a circularity issue, not just an insurance problem

Total loss is becoming a circularity issue because insurance decisions now shape vehicle flows, parts reuse, EV battery recovery and material recycling. EvaluCar’s Mathieu Millet argues that a faster, better-connected and more traceable claims process would reduce delays, prevent vehicles disappearing into opaque channels and give recyclers clearer access to incoming stock.

Mathieu Millet of EvaluCar discusses total loss management, vehicle traceability and circularity. — Mathieu Millet

As repair costs rise, EVs become more common, and Europe tightens its focus on vehicle circularity, EvaluCar’s Mathieu Millet believes total loss management must move from a fragmented claims process to a faster, cleaner and more traceable system.

For many years, total loss management was viewed mainly as an insurance matter. A vehicle was damaged; an expert assessed it; the insurer made a settlement decision; and the car moved on to repair, resale, salvage, or dismantling.

That view is now too narrow.

According to Mathieu Millet, President of EvaluCar, total loss has become one of the key pressure points in the automotive ecosystem. It now sits at the intersection of customer experience, claims inflation, fraud prevention, EV repairability, end-of-life vehicle flows and Europe’s circular economy ambitions.

His message is clear: the old model is too slow, too fragmented and too opaque for the challenges now facing insurers, experts and recyclers.

Millet argues that claims management is under pressure from all sides. The claim remains the most sensitive moment in the relationship between insurer and customer, but customer expectations have changed dramatically. People are used to fast, intuitive digital journeys in other areas of life. When their car is written off, they may be dealing with loss of mobility, financial uncertainty and emotional stress. A process that takes a month or more can quickly damage trust.

The difficulty is that total loss cases involve many different parties: the insurer, assistance provider, recovery operator, repairer, expert, recycler and sometimes a hire vehicle provider. Each has its own procedures and priorities. Without proper coordination, the customer experiences repeated requests, delays and disconnected communication.

For Millet, total loss needs a “conductor”. It should not be a chain of isolated handovers, but a managed journey.

The economics are also becoming more challenging. Modern vehicles are increasingly expensive to repair, with more electronics, sensors, ADAS equipment and high-value lighting systems. Even relatively minor damage can involve costly components. New manufacturing techniques, such as giga-casting, may improve production efficiency for OEMs but create difficult repair scenarios after a collision. If a small impact affects a large structural casting, repair can quickly become uneconomic.

This matters directly to recyclers because insurer decisions influence the flow, timing and quality of vehicles entering the salvage and end-of-life sector.

EVs add another layer of complexity. Millet remains optimistic about electric vehicles and believes they will become increasingly dominant as prices fall and the technology matures. However, the transition phase is creating uncertainty for insurers, repairers and recyclers.

Battery damage is a key issue. In some cases, conservative approaches to battery assessment can push damaged EVs towards write-off, particularly when the vehicle’s value is low. Yet Millet also sees a major opportunity. Battery diagnostics are improving, module-level repair is possible, and specialist companies are emerging to repair, refurbish and upgrade batteries.

The challenge is whether regulation, liability frameworks and vehicle design will support repairability. For recyclers, EVs are not simply a new waste stream. They contain valuable components and materials, but also require new skills, safety procedures, and traceability.

Fraud is another growing pressure. Millet warns that fraud is becoming more professionalised, while generative AI makes it easier to create false documents, images and claim narratives. At the same time, AI can help insurers automate processes, detect anomalies and reduce delays.

The future, therefore, is not about removing human expertise altogether. It is about using AI intelligently while retaining targeted physical inspection where fraud or uncertainty is suspected. In that sense, the automotive expert may return to a more fundamental role: verifying the reality of the damage when data cannot be trusted.

For the recycling sector, the implications are significant. A faster, better-managed total-loss process can improve vehicle flows, reduce unnecessary storage costs, and give dismantlers greater visibility into incoming stock. Better data can support more accurate triage, stronger parts identification and improved material recovery.

Millet also highlights the need to tackle opacity around end-of-life vehicle movements. Across Europe, damaged vehicles can leave formal channels, be exported, repaired under uncertain conditions and return to the market as low-cost used vehicles. Stronger rules on when a vehicle should be classified as waste, and tighter controls on the export of non-roadworthy vehicles, are therefore welcome.

This is where insurance and recycling increasingly overlap. The way a total loss vehicle is assessed, valued, moved and sold affects more than the insurer’s balance sheet. It has consequences for road safety, parts reuse, material recovery and circularity.

Millet describes EvaluCar’s first priority as “lean”: removing duplication, cutting delays and connecting stakeholders more efficiently. The next step is “clean”: improving the traceability of damaged and end-of-life vehicles.

That distinction is important. Efficiency alone is not enough. A faster system that still allows vehicles to disappear into opaque channels will not deliver true circularity. A cleaner system must ensure that vehicles, parts and materials are directed to the right treatment routes, with proper documentation and accountability.

For auto recyclers, the opportunity is clear. As vehicles become more complex, valuable and regulated, the businesses that can handle them safely, transparently and efficiently will become more important.

Total loss is no longer just the end of an insurance claim. Increasingly, it is the starting point of the next value chain.