After a serious accident, an insurer may decide that repairing your vehicle is not practical or financially sensible. When this happens, the car may be declared a write-off.
Understanding the process can help you know what to expect from your insurance claim.
When Is a Car Considered a Write-Off?
A vehicle may be written off when it is damaged beyond safe repair or when the estimated repair cost is too high compared with its insured value.
The decision is normally made after an assessor inspects the vehicle. The assessor considers the extent of the damage, the cost and availability of replacement parts, the vehicle’s value, and whether it can be repaired safely.
A car does not necessarily need to be completely destroyed to be written off. Even repairable damage may result in a write-off if the repairs would be uneconomical.
How Is the Payout Calculated?
Your payout will depend on how the vehicle is insured. A policy may cover the car at its retail, market, trade or agreed value.
The insurer may deduct:
- Your applicable excess
- Outstanding premiums or fees
- Amounts excluded under the policy
- The value of any uninsured accessories
Check your policy schedule to understand which vehicle value applies and how a total-loss settlement would be calculated.
What If the Car Is Financed?
If money is still owed to a bank or vehicle finance provider, the insurer will generally pay the finance provider first.
If the insurance settlement is higher than the outstanding finance balance, the remaining amount may be paid to you. If the settlement is lower, you could remain responsible for the shortfall unless you have suitable credit shortfall cover.
What Happens to the Damaged Car?
Once the claim has been settled, the insurer will usually take ownership of the written-off vehicle and arrange for its disposal. You should not remove parts or accessories unless the insurer has given permission.
Make Sure Your Vehicle Is Properly Covered
The cheapest policy may not provide the settlement you expect after a total loss. Compare the insured value, excess, exclusions and optional benefits before choosing cover.
Easy Car Insure helps you explore car insurance options suited to your vehicle and budget.