When one hears the word “write-off” from your insurance company, the image that comes in your mind is a mangled wreck ready for the scrapyard. While extensive damages are often enough to deem a vehicle a write-off, in many instances the vehicle is just not worth repairing even though it still looks to be in decent condition.

Definition of write-off’s

Insurers work on very strict policies and procedures when insuring your vehicle. In exchange for monthly payments, the insurance company agrees to pay your losses to restore the car in the roadworthy condition it was in before the accident. However, if the damaged vehicle cannot be safely repaired or if it will be uneconomical to perform work the case could constitute a write-off and the policy holder could wither receive a replacement of the same or similar make and model or a cash payout (minus the excess, dual insurance, betterment and depreciation) in the retail, market or trade value of the vehicle dependent on the agreement between both insurer and policy holder.

The write-off process

After you have notified the insurer of an accident and your intention to claim from your vehicle insurance policy, they will then send an assessor to inspect the damages. The assessor will calculate the cost of repairs and compare them with the cash value of the vehicle. The assessor will also take into consideration availability of parts, and the age and condition of the vehicle. They will then decide whether it can be repaired and legally put onto the road, or if it will be economical or safer to write it off.

What happens afterwards

When compensating you for the write-off, the insurance company essentially buys the vehicle from you and becomes the new owner. Once in their possession they will most likely sell it to a salvage company to recover some of the costs of payout. 

One important thing to remember is that, if the vehicle is still under finance at the time it is written-off you must immediately notify the finance company. The vehicle is still the property of the financier until the insurance company settles the claim and pays the outstanding amounts to the finance house.

Can you disagree with a write-off?

If you disagree with the insurer’s decision to write off your vehicle, and believe it can be repaired effectively, you have the option of appealing to the Ombudsman. It would however be wise to first attempt to escalate the matter within the insurer to find a resolution.