What is an insurance write off?

If you’ve been involved in an accident and your insurance provider informs you that your car is a write-off, you're probably wondering what to do. We’ll help you understand write-off categories A, B, S and N (previously C and D), and how to insure a written-off car.

If you’ve been involved in an accident and your insurance provider informs you that your car is a write-off, you're probably wondering what to do. We’ll help you understand write-off categories A, B, S and N (previously C and D), and how to insure a written-off car.

Daniel Hutson
From the Motor team
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Posted 21 SEPTEMBER 2020

What does it mean when your car’s a write-off?

An insurance write-off is a term used to describe a car that’s either been damaged to the point that it’s no longer roadworthy, or beyond the point that repairs make financial sense. Car insurance companies each have their own assessment criteria to calculate repair costs, which are used to determine whether your car is deemed ‘written off’.

After an accident, your car is considered a write-off if it’s beyond repair or would cost more to fix than the value of the car itself. Even if the car looks okay on the outside or has what you might consider to be minor damage (such as a scrape along the side), it could mean it’s heading to the scrap heap if any repairs are likely to cost more than the car’s value.

What happens if my car is written off?

When your car’s written off, it’s retained by your insurance provider – you get a pay-out in compensation. But if your car falls into what was known as Category C or Category D (now replaced with Category S and Category N respectively) then you have the option of buying it back and fixing it yourself.

You can also buy and sell second-hand cars in these categories. But it’s worth noting these cars may be more difficult and more expensive to insure in the future. Category C and Cat D car insurance can be more expensive and difficult to get than insurance for a standard car, and some providers won’t offer it at all.

Why do cars get written off?

Depending on the damage to the vehicle, car insurance companies can decide to declare a vehicle as written off. This is because the car’s repair costs are higher than the car’s value.

The damage to your car doesn’t necessarily have to prevent it from running. Even minor or cosmetic damages can lead to a car being declared written off, if the cost of repairs still outweigh the car’s value.

This is why write offs are broken down into a number of categories, to separate the types of damages that can lead to a car being declared written off.

How does an insurer decide if a car is a write-off?

After being in an accident and putting in a claim with your car insurance provider, they’ll assess the damage to your car and decide whether it’s classed as a write-off. They’ll calculate how much it would cost to repair the damage, and whether this is ‘economical’. Economical is a term they’ll use to weigh up the costs of repairs against the car’s value. If your insurance provider classifies it as a write-off, they’ll pay-out your settlement fee.

An example of a pay-out would be that your car insurance provider values your car at £5,000. You agreed this as a settlement fee amount when you took out your policy. So, when your car is declared written off, your provider will pay-out for this amount, minus the excess amount on your policy, which varies between policies. For example, your excess amount could be £250, which would leave you with £4,750 in total.

What can I do if I don’t agree with the write-off decision?

If you disagree with your car insurance provider as to whether your car is a write-off, you can dispute this. You should know though, they will make their decision based on the car’s current value, not what you paid for it whenever it was you bought it.

If you think it’s still worth keeping the car, you could ask to hang on to it, receive your settlement fee, but have the car’s salvage value deducted from your pay-out.

The important thing here is your settlement amount. You should agree an amount you’re happy with, with your car insurance provider when you take out the policy. Disputing this amount later will be very difficult, as you agreed to it at the time.

If you’re really unhappy with the valuation provided by your insurance provider, you could appeal to the Financial Ombudsman Service, who may be able to handle your complaint and advise you further.

Car insurance write-off categories explained

If your insurance provider thinks your car’s a write-off, it will fall into a write-off category. Some of these have been updated as per the Vehicle Salvage Code that came into effect in October 2017:

Category A (Scrap)

If placed into this category, it means that your vehicle is too damaged or old for repair. It also means that the car parts themselves are useless and can’t be sold second-hand.

Category B (Break)

Cars in this category are also considered too damaged or old to be repaired. However, as long as they are removed by an expert, some parts may be re-used or sold second-hand, although a Category B write-off can’t be sold second-hand.

Category S (Structurally Damaged Repairable)

Formerly known as category C, these cars can be repaired and only have damage to the structure of the chassis. All Cat S cars will need to be re-registered with the DVLA before being put back on the road.

Category N (Non-Structurally Damaged Repairable)

Formerly known as category D, category N vehicles can also be repaired. These vehicles have only been damaged superficially and the structural integrity of the vehicle remains intact. There’s no need to re-register Category N cars with the DVLA before taking to the road again, but you’ll need to notify them that your car was written off.

Can I buy my car back if it is written off?

If your car’s declared a write-off, but you still want to keep it, this could be possible. If it’s classified as a category S or N, this is deemed repairable, so you should be able to buy it back.

You should let your insurance provider know as soon as possible, if you’re intending to buy it back, because they’ll have a standing agreement with various salvage companies who will be ready to take the car away. Once your settlement fee is agreed, your insurance provider legally owns the car, so you’ll need to act quickly.

If you’re seriously considering buying back your written-off car, you should get a mechanic to take a look and make sure it’s safe and worth repairing financially.

What do insurance companies do with written off cars?

What car insurance companies do with your written-off car depends on the category of write off. If the damages are categorised as an A or B, the car will be crushed. If your car falls under the S or N categories, your insurance provider can sell your vehicle on, either to a third party, for salvage, or even back to the owner.

How much will I get for my written-off car?

Unless you have new for old car insurance, you’ll get the current market value of your car, not what you paid for it. You can dispute the value with your insurance provider if you’re not happy with what they offer.

What happens if I still owe money on my vehicle when it’s written off?

If you bought your car on finance, you need to contact your finance provider as soon as possible to discuss the matter. As mentioned, if your car falls into category S or N (C and D), you have the option to buy the car back and fix it using your own money (just remember that it’ll almost certainly cost more to repair than it’s worth).

It may be possible to use the money you get from your insurance provider to buy another car and keep paying off your finance, but this would need to be negotiated with your finance provider.

Once you’ve agreed that the car is written off, your insurance provider will offer you the settlement amount for it. This should have been agreed with you when taking out your policy, so be sure to check the amount before agreeing. If the amount your insurance provider pays out isn’t enough to pay off the outstanding finance on your car, you’ll be responsible for finding the rest of the money.

You can either continue to make your monthly repayments, or you could contact your car finance provider and make an agreement to settle the amount owed then. However, this will usually result in some sort of early repayment charge, so you’ll want to do your sums to find out if it’s worth it or not. One way or another though, you’ll need to pay off what you owe.

Should I buy a written-off car?

Repaired insurance write-offs can be found for sale second-hand and can be good bargains. However, you might want to get the car professionally checked out before you buy it.

You should be able to find car insurance for written-off cars. When comparing car insurance with Compare the Market, we won’t ask you for your write-off category for a car you’re looking to insure. However, once you’ve found cover you like, you’ll need to contact the insurance provider and disclose any write-off information, before taking out the policy, to ensure they’ll approve the vehicle to be insured.

If a car is classified as a category A or B write-off, it should be scrapped, which means you should avoid it completely. Category B write-offs may well be worth purchasing for parts, but parts only.

For category N and S cars, these should be safe to drive once the necessary repairs have been made. Once it’s repaired, you will need it to pass an MOT, to ensure it’s safe to drive on public roads, as well as re-register it with the DVLA.

When considering the value of buying a previously written-off car, you should keep in mind the potential resale value as well. You’ll likely find that the car holds much less value if you decide to resell. So, while it may be a bargain for you now, keep in mind that you’d likely have to sell it as a bargain, too.

Buying a written-off car can work out as a good deal, but bear these things in mind when deciding whether it’s the right option for you.

Insurance is your safety net

Nobody wants to hear that their car’s a write-off, but having insurance means you should at least get your car’s value if it is. And that’s why it’s so important to use our car insurance comparison service to find the right car insurance policy for you.

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