A Complete Guide to Insurance Write-Off Categories

What is an insurance write-off mean?

What does the term write-off mean, and what are different write-off categories? It is a commonly used jargon among car insurance companies to decide if the insured vehicle is a total loss. The term write-off may sound an alarm for many, but on the one hand, many cars are scrapped; on the other hand, they may be repaired and brought back on the road.

If your vehicle has ever sustained damage in an accident, robbery, or vandalism, your insurance company would have assigned one of the categories. The insurance engineer assesses the vehicle’s condition and assigns it a particular written-off category, which will be explained below.

insurance write off

What are the types of Categories in Insurance Write-Off?

The insurance companies assign your vehicle one of the four categories based on its condition. Previously, there were four car damage categories A, B, C, and D, but now the C and D categories were updated as N and S categories by DVLA in October 2017. The categories are as follows:

Category A: Scrap

The badly damaged cars that are beyond repair get a category A. The “Cat A” vehicles must not be on the roads again and become scrap.

Category B: Break

The category B cars are beyond repair and should not be back on the roads. The only difference between category A and B is that parts of category B cars are salvageable.

Category S: Structurally Damaged

The cars that have endured structural damage, such as the body, frame, or chassis, fall under category S. It also includes vehicles for which the repair cost is more than the car’s original value. If you want to keep a category-S car, you must send the current logbook for this write-off category and apply for the duplicate logbook from DVLA.

Category N: Non-structurally Damaged

The cars that have not endured structural damage but rather non-structural faults such as airbags, brakes, or other parts fall under this category. In this case, the insurer may have decided that it wasn’t economical to repair, or the repair-to-value ratio was high, so it would be better to write it off.

How does Insurance Companies Value your Car?

The insurance companies decide if your vehicle is economical to repair or not. The accident highly depreciates the car’s price. The insurance engineer checks the vehicle’s condition and compares its current value to its market value before the incident.

The car’s value depreciates over the years as the mileage grows. So, the engineer compares your car’s mileage with the car’s average mileage of the same make and model. In case it is high, the cost becomes less.

Moreover, the cost is evaluated based on past incidents and repairs. Due to the repairs, the vehicle may have installed used parts or been repainted, which also contributes to calculating the cost of the car. How much the car has been used and even minor stains on the car’s body also impact the price of the car.

So, considering all these factors, the insurance engineer decides the car’s market value before the accident. The company then calculates the amount spent on repairing the car by considering the workshop repair and the parts required cost. The insurance company then compares the value and decides if it is economical to repair the car.

Sometimes, the repair amount is less than the market value, but the car is still written off. This is due to the repair-to-value ratio, distinct for different companies. Let’s say that the vehicle is worth Rs. 500,000, and the repair-to-value ratio for the company is 70%, so if the repair cost is more than 350,000, the vehicle is written off.

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How to check if a Car is Written-Off ?

How can you know that the purchased car is not being written off? The vehicle write-off check is prudent to see if it has ever taken damage or been in a collision. It should be no concern buying a written-off car if repaired to roadworthy condition. They usually cost less than non-written-off vehicles.

The sellers usually don’t tell if the car has ever been in an accident. But you can check it by getting a car history report online from different websites using Vehicle Identification Number (VIN).

Is it a Good Idea to Buy an Insurance Written-Off car?

If you want to buy a insurance written-off car, there is no harm in buying one as long as it is safe and secure enough to be on the road. It should be dismantled or scrapped if category A and B. Written-off vehicles usually cost a lot less than non-written-off vehicles.

Can I Buy a Category N or S Car?

You can buy a category N or S written-off car as long as it has been repaired. No doubt its value is a lot less. However, resale may become a problem for you. Other than that, you are good to go. But it will need to be registered again with the DVLA and must be insured with a new MOT. If you want to buy a car that has been assigned an N or S category, you must ask the seller to send the complete logbook to the insurance company and request a new one. If you find the deal “too good to be true”, it should be no problem as long as it is in a roadworthy condition.

Conclusion:

If your car has ever been involved in an accident and an insurance company has written it off, the insurance company will retain the car and pay a cash settlement to you. If it is under category S or N, i.e., the car is uneconomical to repair, you have two options. You can either get the cash or keep it and fix it yourself.

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