How car insurance write-offs work: from accident to payout

One of the most frustrating things for someone to hear after their car has been involved in an accident is that the vehicle is a “write-off”. This is when the insurer decides repairing the car does not make financial sense, or it is not safe to put back on the road. Some people can find this process beyond frustrating, especially if the car does not look that badly damaged to the eye.

Ernest North, co-founder of the car insurance provider Naked, says an insurer may decide to write off a car after a major accident, or, less commonly, if it is damaged by fire or severe weather, or recovered in poor condition after being stolen. “When you submit a claim, the insurer will appoint an assessor to inspect the vehicle and calculate the cost of repair,” says North. “If the repair costs are high compared to the car’s value, the insurer may decide it is a total loss rather than something that should be repaired.” He highlights that thresholds can differ between insurers; a common rule of thumb is that if repairs are likely to exceed 50–75% of the car’s value, the car is usually written off.

“In simple terms, the insurer is weighing up what it would cost to repair the car properly and safely, against what the car is worth,” adds North. “If the numbers don’t make sense, or there are safety concerns, it’s more likely to be written off.” ●How severe the damage is – bad structural damage to the frame of the car might make it too expensive or even impossible to repair safely. ●The age and condition of the car – it does not make sense to pay more to fix the car if repairs will be more than its book value.