What is an Insurance Write-Off? – A Comprehensive Guide

If your car has suffered damage due to an accident, your insurance company may "write off" your car and refuse to repair it for you, as it may be deemed "beyond economical repair". Although the term seems quite daunting, it's not necessarily the end of the road. In this article, Gumtree gives you the run-down of everything you need to know about an insurance write-off.

By Gumtree Editorial Team

20 August 2021 8 min read

What is an insurance write-off?

If a car has been damaged due to an accident, fire, flood or theft, the vehicle owner can file an insurance claim to mitigate the costs of the repair. Once a claim is filed, the insurance provider will hire vehicle assessors to analyse the damage, inspect the overall condition of the car and determine whether it’s worth repairing. The assessment may be done in person or via photos taken from your garage.

Often, if the cost of repairs is greater than 50-60% of the value of the car, the insurance company may decide to write it off. (Note that this figure may vary based on your insurance provider.) For example, if your car is worth £10,000 and the cost of repair adds up to a value of more than £5,000 or £6,000, then your car could be written off.

Once a car is written off, the insurance provider will give you the full pre-damage value of the car instead of repairing it and returning it.

If my car is written off, does that mean it’s unusable?

Typically, write-offs are associated with severe damage i.e. it’s a “total loss” and your car is unsafe to ever use on the road again. However, this is not always the case. The cause for a write-off can simply be an “economic total loss” i.e. other costs such as providing a courtesy car could push up the repair charges beyond that 50-60% threshold. To determine whether your car can be taken on the road again, note the write-off category that the assessment engineer placed your car in. View our guide covering all you need to know about selling a damaged car for more advice.

Car insurance write-off categories explained

Categories for damage are based on the Salvage Code of Practice drafted by The Association of British Insurers (ABI) and the Lloyd’s Market Association (LMA).

Cat A: For cars that have been in a serious accident and can never be road-safe again. They have to be crushed and even salvageable parts must be destroyed.
Cat B: Signifies extensive damage associated with a serious accident. The body shell must be crushed and the car should never appear on the road again. However, usable parts can be salvaged and may be sold off or recycled.
Cat S (Formerly Cat C): Signifies structural damage that has to be repaired professionally (for example, a bent chassis). You can use the car again if it’s repaired to a roadworthy condition.
Cat N (Formerly Cat D): Non-structural or cosmetic damage that isn’t economical to repair. An example of a Cat N damage could be an older car that’s been in a light scrape.

The ABI amended the salvage code in October 2017 and replaced the Cat C and Cat D naming convention with Cat S and Cat N respectively. This was done to better reflect the suffered damage of the car to inform used-car buyers. However, you may still see some Cat C and Cat D cars in the used market.

How much will my insurer pay me after a write-off

If you have third-party fire and theft or comprehensive insurance, your insurer will cover you for replacing your car at the current market value. Note that insurance companies will usually work out a value at the lower end of the market value, and there is room to bargain for a better price. Research cars with similar age and mileage in the pre-owned market to demonstrate the worth of the car.

If your car is on finance, things are a little more complicated. The burden of paying back the amount to your finance company is on you, and the amount you get from your insurer may not cover the cost. However, if you have guaranteed asset protection (GAP) insurance, your policy will cover the difference.

If my car is a write-off, can I buy it back?

Once you’ve agreed on a settlement figure, the insurer has the right of ownership. Your insurer will likely be unwilling or reluctant to sell the car back to you. This is because most insurance companies will have contracts with salvage firms to hand over all their written-off vehicles.

Whether you want the car back for its emotional value or you want to repair it yourself, make sure you let your insurer know as soon as possible. Keep in constant touch and remind them of your interest in buying back the car. Be sure to get your car checked before you buy it back, as you’ll likely need to repair it yourself.

Note that you’ll have to apply for a new insurance policy after the car is repaired and road-worthy. Make sure that you notify your new insurer about the write-off status, or the insurance policy may be null and void in case of a claim.

Disputing a write-off

Before you dispute a write-off, look for the words “we indemnify you up to the market value of your vehicle” in your insurance policy. In this case, your insurance company is legally obligated to repair your car if the cost doesn’t exceed the market value. Not doing so is a breach of contract on the part of your insurer.

However, if the insurer is not legally obligated to repair your car, there is room for a dispute. In this case, you’ll need to carry out the repair independently, so you must be sure that the cost of repair is worth the dispute. You can negotiate and insist that you keep the car and settlement figure, not including the salvage value.

Now that you’re aware of all your options in case of a write-off, be sure to get the best deal from your insurer. For further information on car insurance, check out more Gumtree insurance advice articles.

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