When a car gets involved in an accident, various outcomes can be had. Depending on the type of accident and the impact involved the damage could be minor or major.
In some cases, when a vehicle suffers such severe damaged it is given the term of a write-off. This term can also be known as totalled.
These terms are used by insurance companies who classify the vehicle as being damaged beyond repair.
If you do not have a comprehensive car insurance policy for your written-off vehicle, you could be at a huge loss as you will not get compensated for it.
But what constitutes to a car being deemed a write-off in Australia?
First, The Car Is Assessed
After the accident, the insurance company sends a qualified assessor to assess the vehicle and estimate how much the repairs will cost.
During this time, they consider the availability and cost of the spare parts needed, the age of the vehicle, and whether the structural damage would compromise its safety once repaired.
The assessor then compiles the cost of repairs and a report which they hand over to the insurance company.
Damage Is Calculated By Percentage
If repairing the car will cost about 50 to 70 percent of the total value of the vehicle, in most cases, the insurance company will declare it a write-off.
In some instances, the percentage of the cost of repairs can be lower than this threshold and still it is deemed as a write-off. In these cases, according to the insurer, the repairs required are considered uneconomical or the safety risk is too high.
The Ultimate Decision
The final decision to write-off the vehicle comes from the insurance company. This comes after they review the report and cost estimate for repairs from the assessor.
- The vehicle is usually written off when it is cheaper to payout the insured value than the cumulative costs to repair and any additional cost, such as storage before and during repairs.
- In some cases, the cost of repair may be lower than the payout but despite this, the car is still deemed as a write-off. This is because the safety of the vehicle is compromised and cannot be recovered through repairs.
- Also, the insurer factors-in the amount that can be salvaged by selling the vehicle for scrap.
Vehicles that suffer extensive chassis or structural damage, are flooded, or burnt out are usually classified as write-offs.
However, as the owner of the car, you cannot declare your car a write-off. This decision needs to come from the insurance company.
Your Car Is A Write Off – Now What?
Once it is considered as one, the insurer will pay-out the owner of the vehicle, and deduct any excess. Of course, this will all depend on the terms of the insurance policy.
Depending on your policy and insurer, the insurer usually keeps the vehicle so they can sell it to a scrap yard or a salvage company. In some cases, you may be entitled to purchase the written-off vehicle from the insurer for your personal use or to sell to a scrapper yourself.
However, bear in mind that written-off cars cannot be comprehensively insured and the laws around treatment of these vehicles vary by state. Therefore, selling the car to a scrapper is usually the best course of action. Then you can put that money to the purchase of a more modern vehicle.