How Car Insurance Companies Decide Whether A Car Can Be Repaired Or Not

Insurers write off around half a million cars every year but how do they decide what constitutes a write off and how will you know if your vehicle is likely be a write off or back on the road?

Firstly, what is a write off?

Also known as a total loss, a write off is a vehicle which has been in an accident is either uneconomical to repair or so extensively damaged that it should never be returned to the road.

There are several factors that make up the insurance company's decision to write off a vehicle but essentially it's a judgement that is totally based on the cheapest option available.

A simple rule of thumb is that the insurer will write off a car when the cost of repairs outweigh the perceived value of the car"write off" a vehicle when the cost of repairs is judged be more than the value of the car. This is a more complex calculation than it first appears because of the different costs involved with writing off a car.

1. Scrap value of the car can be a deciding factor

Let's look an example. If your vehicle is worth £2500 and repairs cost £1800 then surely you would expect to see your vehicle back on the road?

Not necessarily. Car insurance companies take into account the salvage or scrap value of the car when making the decision. Let's say that a cat is worth upwards of £700 as scrap, this can be offset against the settlement fee paid to you. Where the settlement fee is in the region of £2500, the offset figure represent a 35% redeemable value against the expense the net difference, £1800 being the figure that they need to compare against the cost of repairs.

There are borderline cases to consider too – looking at the example above, if your car were worth only £400 in scrap the insurer may well decide to write off the car assuming that there is a high possibility that when repairs are started the mechanics may find further problems not revealed in the initial assessment, thus increasing the cost of repairs.

2. Parking charges

Many garages charge insurers extremely high rates for keeping "written off" vehicles on their premises. It's often deemed sensible to completely avoid such cost by writing off a vehicle and then disposing of it at a salvage yard.

3. Type of policy

Another deciding factor in whether your vehicle is written off or not is the type of policy you have. For example, if you have a new for old policy the insurer may be more likely to write off the vehicle under the terms of your policy.

4. Hire charges

Again, the cost of car hire charges can effect the decision – if your policy includes a courtesy car the charges for the hire of the car may prove too high for the insurers.

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