What does it mean to have your car written off? When your car is deemed a write-off by your insurance company, the damage might not seem that severe to you, but it could lie beneath the surface. Navigating through the process can be a stressful experience if you aren’t prepared, so Budget Insurance has put together a detailed guide to help break down the process, explain how an insurance company will evaluate your vehicle after an accident, and why it’s a benefit to get car insurance.
What makes a car written off?
A car written off means that the cost of repairs to the vehicle following an accident or other damage is deemed to be more than the value of the car. In this case, the insurance company may declare the car a total loss and will usually pay the owner the vehicle’s current market value rather than repairing it. This means that the car can no longer be driven and must be sold for scrap.
What is the car write-off procedure?
After a car accident, the insurer will assess the damage to your vehicle. If they consider the repair cost of repairs uneconomical, then the vehicle will be declared a car write-off. This normally happens when the cost of repairs is high in relation to, or more than, your car’s insured value.
The following will happen for a car written off:
- The car will be assessed for damage following the accident
- The cost of repairs will be estimated and compared to the car’s current market value
- If the cost of repairs is deemed to be more than the car’s value, the insurer will probably declare it a loss
- The insurer will pay the policyholder the car’s current market value minus any deductibles or policy limits
- The policyholder will sign over the title of the car to the insurance company and sell the car for scrap
It’s the threshold of the cost of repairs relative to the car’s value, which determines whether a vehicle is a total loss. Additionally, some insurance companies have their own internal process to determine if a vehicle is a total loss.
What do I do after a car accident or collision?
If you are involved in a car crash, these are the steps we advise you to take:
- Record the date, time, and location of the accident
- Note the make, model, and license plate numbers of all vehicles involved in the accident
- Collect the personal details (name and ID number) of all drivers involved, including their insurance details
- It’s helpful to get contact details of any witnesses at the scene too. This may help you in the future if there is a dispute
- Contact your insurance company to get authorisation for the correct towing company to tow your vehicle[2]. The towing companies that arrive at the scene of the accident might pressure you to use them. If you do not use an authorised towing company (and confirm with your insurance company that they are, as the tow truck operators might tell you they are authorised) you may be liable for the cost of the towing and the subsequent storage costs of the vehicle
For more detailed information, take a look at What to do in a car accident.
Frequently asked questions about having a car written off
- How is a settlement figure determined?
The settlement figure is determined by calculating the insured value of the vehicle.[1] The selected value will be calculated by comparing the Trade, Market, or Retail prices of similar vehicles, depending on which insurance cover you selected initially, and then taking into account mileage, condition of the vehicle, and any upgrades the vehicle might have had to determine your car’s insured value.
The BetterCar Value insurance option is available from Budget Insurance, an authorised financial services provider with FSP number 18178. If you invest in the BetterCar Value option, your car will be replaced with a younger model with less mileage. T’s & C’s apply.
- Can I keep my car after it’s been a write-off?
Once the car is written off, you can ask your insurance company to allow you to keep it if it is not financed. If agreed to, the cash settlement will be reduced with the projected salvage value.T’s & C’s will apply.
- How do insurers determine if a car is a write-off?
A car can be declared a write-off when the cost of repairs to the vehicle is deemed more than the car’s value. This occurs under the following circumstances:
- The vehicle is involved in a severe accident
- The car sustains significant damage from a natural disaster, like a fire
- The car has significant mechanical or structural issues that make it uneconomical to repair
Get a car insurance quote from Budget Insurance
When you’re selecting the right insurance for you and your family, make sure you fully understand the different options available. Budget Insurance, an authorised financial services provider with FSP number 18178, offers four options, Comprehensive car insurance, BetterCar Insurance, Third-party Only, and Third-party Fire and Theft insurance. Each one is tailored to suit our customer’s un needs. Apply for a quick car insurance quote online today.
Pictures: GettyImages
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