Explaining car write-offs
Is your car a write off?
If you have comprehensive insurance and your vehicle is involved in an accident, your insurance company must decide whether it makes better sense to repair it or write the car off.
Insurers often use the phrase “beyond economical repair” or “total loss” in this situation. If the cost of repairs is more than the current market value of the vehicle, they’ll declare it a write-off. A car might be deemed beyond economical repair if:
- it has a low market value (e.g. old cars)
- the cost of parts and repairs is very high, even if it’s a newer car
- other costs, for example vehicle transport and storage, courtesy or hire cars, sourcing rare parts etc., when added to the cost of repairs, outweigh the value of the vehicle.
Another reason a car can be written off is if it’s sustained so much damage that it would be unsafe to ever go back on the road.
If an insurance company writes a car off, it means that they’ll keep the vehicle and you’ll receive a pay-out for its loss.
Who decides if it’s a write-off?
The insurance company will appoint an experienced vehicle assessor to examine the car. They’ll make a judgement based on the extent of the damage and the cost of repairing it to the condition it was in before the accident, and then make a recommendation to the insurer.
Car write-off categories
We'll be updating this section in October 2017, when new car write-off categories are going to be introduced to replace the existing classification. Until then, the following information is correct.
There are currently four different categories of write-off, depending on the seriousness of the damage. The first two represent cases where the vehicle is damaged so badly that it would be unsafe for it to ever go back on the road, but the second two are less severe; repairing the vehicle might not make economic sense to the insurer, but the car can be sold on to a new owner, perhaps someone in the motor trade industry, who can repair the car more cheaply.
Category A write-off
For vehicles that are so badly damaged, they must be crushed and even salvageable parts must be destroyed.
Category B write-off
Some parts may be salvageable and can be used in other, road-worthy vehicles, but the body shell must be crushed and the car should never go back on the road.
Category C write-off
The cost of repairs exceeds the vehicle’s value, but it is repairable and can go back on the road. Category C write-offs often appear for sale at special auctions, where motor traders and repairers can buy them and do the repairs at trade prices.
Category D write-off
Quite often, the damage on a Category D write-off is relatively light and the car can be repaired and put back on the road. The insurer may write a vehicle off in this category if the total cost of getting it back on the road, including non-repair expenses such as the examples mentioned earlier, outweigh the vehicle’s market value.
Another situation where a vehicle might become a Category D write off is when it has been stolen and then recovered after the policyholder had been reimbursed.
Your car has been written off – what happens next?
If your car has been confirmed as a write-off, your insurer will write to you with an offer to reimburse you, minus any policy excess (the part of any claim payable by the policyholder).
If you accept their offer, you’ll be asked to send your vehicle logbook (V5C) to them (but keep section 9, the yellow slip V5C/3). The vehicle then becomes the property of the insurance company, who will either arrange for its disposal or, in the case of Category C and D write-offs, sell it on.
What is the write-off value of your car?
When assessing the write-off value of your car, the insurance assessor will take several factors into account:
- The make, model and age of your vehicle
- The vehicle’s general condition (obviously not including damage caused by the accident), e.g. bodywork, interior, miles on the clock, any modifications which affect the vehicle’s value.
- Its current market value, i.e. the price it would have sold for at a reputable dealer prior to the accident or theft
What can you do if you disagree with the amount you’re offered?
The insurer is obliged to offer a sum which enables you to buy a like-for-like car in a similar condition, but if you think your car was worth more than they’re offering, you can ask them to reconsider.
You need to present evidence to back up your claim, though, so look around at local garages, newspapers and websites to find like-for-like cars with a higher value.
The Financial Ombudsman
If you still can’t agree, the Financial Ombudsman is an organisation that can take an independent role in disputes over write-off valuations between insurers and consumers. They’ll look at all the facts and reach a conclusion that’s fair, reasonable and legally binding. Be aware that the Ombudsman won’t necessarily uphold a consumer’s complaint.
Should you tell DVLA your car has been written off?
Yes, you must tell DVLA if your car has been written off, although your insurer will usually take care of the actual disposal of it. There’s an online process you can follow to inform DVLA, but you can also send section 9 of your logbook (V5C/3) by post if you prefer.
You can be fined £1,000 if you don’t tell DVLA that your car has been written off.
Can you keep a written off car?
If your car is a Category C or D write-off, you might be able to buy it back from the insurer. This is how it works:
- As soon as you know that your insurer is going to write-off the vehicle, let them know you’re interested in buying it back (and remind them throughout the claims process). This is often an ideal solution for the insurance company, saving them the trouble of finding a buyer at auction
- You’ll be offered a write-off valuation by your insurer and once this is agreed between you, you’ll receive reimbursement for this amount, minus any policy excess
- At this point, the vehicle is the property of the insurance company
- You’ll then need to negotiate a separate deal with them to buy back the car.
Will your insurance be affected by a write off?
Insurance companies will insure Category C and D write-offs, but they’ll want to know that the vehicle has been repaired professionally and to a standard that makes it completely safe to be back on the road. They can (but not always) ask for an engineer’s report before providing cover. In some cases they may be satisfied with just a current MOT.
You must inform your insurer if you’re asking them to cover a vehicle that’s previously been written off. In the event of a claim, they’ll make sure that its history wasn’t a factor in the cause of a crash; if you’ve not been honest about past damage, your insurance could be invalidated and you could face prosecution for insurance fraud.
We hope this answers your questions about how the insurance write-off process works, but if you’ve arranged your insurance through 4 Young Drivers and would like more information, please get in touch.