Car insurance write-offs

A write-off (or a total loss) is when your car is damaged so severely that your insurer considers it too expensive or impractical to repair. Even if the damaged vehicle looks okay following an incident, it could still be a write-off if there are serious unseen issues (e.g. damage to the chassis or similar structural damage).

Certain thresholds have to be met for a car to be considered a total loss and written off, which are laid out in the written-off vehicle register (WOVR).

The assessor will analyse the damage based on standardised damage assessment criteria and categorise it based on:

• The incident
• Damaged areas of the car
• The type of damage and the severity.

Once the vehicle inspection is complete, the assessor determines if it’s a statutory write-off or repairable write-off. This assessment will consider:

• The current market value or agreed value of the vehicle
• The cost of replacing exterior body parts
• Other expenses involved in repairing the vehicle.

The Written-off Vehicle Register (WOVR) is a directory that lists cars deemed a total loss by state and territory governments. The Personal Property Securities Register (PPSR) is a database that helps car buyers find out if a used car has a security interest against it.

A PPSR check can include information on whether a car is written off, which is information supplied by the WOVR.

Statutory write-offs are considered unsafe to repair. They can never be driven or registered again in some states and territories and may be reduced to scrap metal or spare parts. Check your state or territory’s WOVR restrictions for further details.

A repairable write-off is when the cost of repairs is higher than the sum insured, but can be repaired. In this instance, if your insurer covers the event that caused the damage, they may retain the vehicle and pay you up to the vehicle’s market value or agreed value as per your policy at the time the accident occurred.

It depends on the type of cover you have for your vehicle. Comprehensive car insurance typically covers your vehicle if it’s written off as a result of the following insured events:

• Motor vehicle accidents
• Weather events (storm, flood, hail)
• Fire
• Theft.

Third Party Fire and Theft insurance may only cover your own car if it’s written off from fire damage or stolen. Third Party Property Damage covers your legal liability for damage to another person’s car or property.

Yes, a repairable write-off can be insured again, provided it passes its safety checks and is re-registered. However, some insurers may deny cover for repairable write-offs, so it’s important to compare your options and see what’s available.

The market value of your car is typically calculated based on things like the:

• Make, model and age
• Condition of your vehicle
• Odometer reading of your vehicle.

Your insurer could pay the amount of the loan up to your sum insured amount if your car was written off by an insured event. However, if it wasn’t an insured event or your claim is declined, you may still need to pay out your car loan. If it was a secured loan, the lender may repossess the vehicle to sell it for scrap.

You can find out if there’s finance remaining on your vehicle by doing a PPSR check.

Claims will often influence your premium regardless of who was at fault. This is because a write-off isn’t always caused by an accident. It could be caused by things like a storm, hail, or fire where no one is ‘at-fault’. This is considered an unrecoverable claim.

There may be a bigger impact on the premium if you were at-fault in an accident vs other scenarios. If you were deemed at fault, this will go on your claim history and may increase the cost of insurance the next time you purchase a policy.

Only repairable write-offs may be registered again in Australia , and only if they pass safety inspections. Statutory write-offs can’t be registered again.

It’s possible to sell a car after it’s been written off, but the buyer must be notified about the vehicle’s history. If you’re selling it as a registered vehicle, it must fall within the category of a repairable write-off and pass a roadworthy inspection.

For a vehicle that fails its safety inspections, depending on the rules within your state, you may be able to sell it privately. Alternatively, you could sell it to a scrapyard for parts.

Your insurance company will typically sell the scrap, but they may let you keep it if you ask them. In this instance, you may have the value of the parts deducted from your insurance payout.