What is an insurance write off?
If you’ve been involved in an accident and your car’s a write-off, you're probably wondering what to do. We’ll help you understand write-off categories A, B, C, D, N and S, and how to insure a written-off car.
If you’ve been involved in an accident and your car’s a write-off, you're probably wondering what to do. We’ll help you understand write-off categories A, B, C, D, N and S, and how to insure a written-off car.
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.
It sounds dramatic, but you may be surprised by how often and how easily it happens - even if the accident didn’t seem serious or the damage doesn’t appear too bad.
Each car insurance provider has their own assessment criteria to calculate repair costs, which are then used to decide whether your car is ‘written off’.
This is why write-offs are broken down into a number of categories, to separate the types of damage that can lead to a car being declared written off.
Even if the car looks okay on the outside or has seemingly minor damage (such as a scrape along the side), it could mean it’s heading to the scrap heap if repairs are likely to cost more than the car’s value.
Car insurance write-off categories explained
If your insurance provider decides your car is a write-off, it will fall into one of the following categories:
Category A (scrap)
Your car is too damaged or old for repair. The entire vehicle should be crushed and can’t be used for parts.
Category B (break)
Your car is too damaged or old for repair but some parts may be re-used or sold second-hand, as long as they’re removed by an expert. A Category B write-off can’t be sold second-hand as a complete vehicle.
Category C (too expensive to repair)
Cars in this category can be repaired, but those repairs would cost more than the vehicle’s worth. You can continue to use the car if it’s repaired to a roadworthy condition.
Category D (total costs make it too expensive to repair)
The cost of repairs may be less than the vehicle’s worth, but other costs, like transporting the vehicle, take it over the limit of its value. You can use the vehicle if it’s repaired to a roadworthy condition.
There’s no need to re-register Category D cars with the DVLA before taking to the road again, but you’ll need to notify them that your car was written off.
Category N (non-structurally damaged repairable)
Category N vehicles can 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 but you’ll need to notify them that your car was written off.
Category S (structurally damaged repairable)
These cars have structural damage but can be repaired. All Category S cars will need to be re-registered with the DVLA before being put back on the road.
What happens if my car is written off?
When your car’s written off, you don’t get it back. It’s retained by your insurance provider, ownership of the car transfers to them and you get a pay-out in compensation instead.
Your insurance company will usually make all the scrappage arrangements but you should follow these steps:
- Apply to take the registration number off the vehicle if you want to keep it, via GOV.UK.
- Send the log book (V5C) to your insurance company but keep the yellow ‘sell, transfer or part-exchange your vehicle to the motor trade’ section.
- Tell the DVLA your vehicle has been written off.
- If you don’t tell the DVLA your car’s been written off, you could be fined £1,000.
If your car falls into Category N or Category S, you have the option of buying it back and fixing it yourself. You’ll need to:
- Send the complete log book to your insurance company
- Apply for a free duplicate log book using form V62
- The DVLA will record the vehicle’s category in the log book.
You can also buy and sell second-hand ‘S’ and ‘N’ write offs. But these cars may be more difficult and expensive to insure in the future. Some providers won’t insure them at all. If you’re debating this check out how much you’re likely to pay for a policy first.
How does an insurance provider decide if a car is a write-off?
After being in an accident and putting in a claim, your car insurance provider will assess the damage to your car and decide whether it’s 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.
For example, your car insurance provider might value your car at £5,000. You would’ve agreed this as a settlement fee amount when you took out your policy and it will be clearly stated in your paperwork. Check your policy details to find out what your settlement fee is.
When your car is declared a write off, your provider will pay out this amount, minus the excess amount on your policy, which can vary. For example, your excess amount could be £250, which would leave you with a £4,750 pay-out.
Why do cars get written off?
Depending on the damage to the vehicle, car insurance providers can decide to declare a vehicle as written off. This is because the car’s repair costs are higher than the car’s value.
Contrary to popular belief, 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 damage that can lead to a car being declared written off.
What can I do if I don’t agree with the write-off decision?
If you disagree with a write off decision, you can dispute it. But be aware that your insurance provider will have made their decision based on the car’s current value, not what you paid when you bought it.
If you think it’s 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.
If you’re really unhappy with the valuation provided by your insurance provider, you could appeal to the Financial Ombudsman Service (FOS), who may be able to handle your complaint and advise you further.
The FOS is free and it’s a useful tool if you’re left with a decision you’re not happy with. It’s independent and can rule in your favour – but it may also agree with your insurance provider.
What do insurance providers do with written off cars?
It depends on the write-off category. If the damages are categorised as an A or B, the car will be crushed. If your car falls under Categories N or S, your insurance provider can sell your vehicle on, either to a third party for salvage or back to you.
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. This is almost always going to be less than you paid, especially if it was a brand new car. That’s because cars lose their value very quickly unless you chose new for old insurance. You can dispute the value with your insurance provider if you’re not happy with what they offer. If you’re not happy at the end of that process, you can go to the Financial Ombudsman.
What happens if I still owe money on my vehicle when it’s written off?
Many people buy their cars on finance, so if you still owe money to a dealer and your car is written off, you need to contact your finance provider as soon as possible to discuss the matter. If your car falls into Category C, D, N or S, you have the option to buy the car back and repair it using your own money (just remember that it will 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. That’ll hopefully be enough to pay off the outstanding finance on your car, but if it isn’t, you’ll be responsible for finding the rest of the money.
You can either continue to make your monthly repayments or contact your car finance provider and make an agreement to settle the amount owed. 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, you’ll still need to pay off what you owe.
Whatever you decide, it’s key to continue speaking to your provider and to make sure they know where you stand. If money is tight and you’re worried about repayments, contact your provider straight away and they should be able to help.
Should I buy a written-off car?
Buying a written-off car can work out as a good deal but there are things to bear in mind when deciding whether it’s the right option for you. You might also want to get the car professionally checked out before you buy it.
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 could be worth buying for parts, but parts only.
Category S and N cars should be safe to drive once the necessary repairs have been made. Once repaired, the car will need to pass an MOT, to ensure it’s safe to drive on public roads.
When valuing a previously written-off car, you should keep the potential resale value in mind as well. You’ll probably find that the car holds much less value if you decide to resell. While it may be a bargain for you now, you’ll probably have to sell it as a bargain too.
Can I get insurance for a written off car?
You should be able to find car insurance for written-off cars but the category will be crucial. When comparing car insurance with Comparethemarket, we won’t ask you for a 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 share any write-off information about your car. You need to do this before taking out the policy to make sure they’ll approve the vehicle to be insured. Don’t be tempted to skip this step - without it you may end up with the wrong kind of policy.
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. You should always have insurance in place, as it’s the law to unless your car is declared as SORN. Without it you wouldn’t be able to make an insurance claim and would probably be out of pocket if your car was written off. That’s why it’s so important to use our car insurance comparison service to find the right car insurance policy for you.
