Insurance write-off category -meaning
If your car has suffered damage because of a crash, and your insurer considers the cost of repairs to be uneconomical, then it will be classed as an insurance write-off category A, B, C, or D. The car will then be kept by the insurer, and you will receive a cash payout for the loss. (usually the vehicle’s ‘market value’—the price it would have sold for at a trusted dealership, before it was damaged or stolen).
How does an insurer decide if a car is a write-off?
If your car is involved in an accident and you put in a claim, an insurance assessor or engineer will normally come and inspect the damage.
The assessor follows strict criteria, but could judge your car to be a write-off if it is beyond ‘economical’ repair.
Note the word economical—if repair costs are around 50% of the car’s valuation, it will most likely be declared a total loss or a write-off.
If so, your insurer will offer a payout in the event of a write off, which should be enough to replace your car with a similar vehicle in a similar condition in your area.
The company will, however, deduct the policy excess.
Let’s say your car is worth £10,000 and is written off in an accident. The insurance company might offer a settlement of £10,000, less the excess of £300, to give you £9,700.
What are the insurance write-off categories?
If your car is written off, it will fall into one of four categories: A, B, C, or D.
The Association of British Insurers’ Salvage Code dictates that Category A and Category B cars body shells be crushed. However- Category B vehicles are allowed to donate some safe and serviceable parts.
Insurance write-offs in categories C and D can be sold by the insurance company. They can then be repaired and put back on the road, as long as they pass a Vehicle Identity Check, with the DVLA when necessary.
- Category A— is the most serious and means the car is fit only for scrap and should never be driven again and all parts must be destroyed. Cat-A cars usually go straight to metal recycling companies.
- Category B— is a vehicle that has suffered extensive damage and should never be driven on the road again, although some parts can be salvaged/used.
- Category C— is given to vehicles that could be repaired, in theory, but have sustained more damage than a Cat D car, or have had more expensive parts damaged. The AIB defines a Category C write off as: “Repairable total-loss vehicles where repair costs including VAT exceed the vehicle’s pre-accident value”. Cars written off as a Category C case do not require a Vehicle Identity Check (VIC) before a V5C registration certificate is re-issued by the DVLA any more. The VIC was carried out by the Driver and Vehicle Standards Agency (DVSA) (formerly VOSA).
- Category D— is a write-off, where the vehicle could be repaired, but the costs are deemed too high, relative to the vehicle’s value. No notifications are made to the Driver and Vehicle Licensing Agency (DVLA) or DVSA (VOSA) when a car is written off in a Category D situation as the vehicle is not subject to a VIC before it is allowed back on the road. (just make sure the repair work has been carried out to a safe and satisfactory standard)
- Category Stolen Recovered— can be additional to the categories above. This means the car was stolen but recovered after some time. Car recovered without damage- Cat-D Stolen Recovered. Damage more than value of the car- Cat-C.
Insurance Write-off values are relative.
Category D write-offs tend to be the most contentious. This is where insurers can write off cars if they think the repairs are too costly, relative to the value of the car.
They base their decision on the repair-to-value ratio. If your car is worth £4,000 and the repair-to-value ratio is 50%, the car would be written off if it would cost near or more than £2,000 to repair.
Different companies use different repair-to-value ratios, and you should be able to find out the figure from your insurer.
The repair-to-value calculation can result in surprising write-offs.
Let’s say the damage to a car is not particularly serious. For instance, you might have reversed into your neighbour’s wall, scratching the paintwork on your car. It might not look too bad, but..
Some cars have very expensive parts i.e. headlights- £600+vat each.. Repair may involve the removal of panels and a courtesy car. In some cases an electrical or mechanical fault occurs as a result of collision and needs more investigation.. The costs could mount, causing the insurer to declare the car a total loss.
This would be a Category D insurance write-off.
A written-off car won’t necessarily have sustained serious damage. Cases have been known when the car simply will not start after light front damage. In this case if the RAC or AA are not able to start it, the car is declared a total loss.
The reason for this is very simple.. Let’s say the car is worth £10,000. A car dealer has to diagnose the fault, and this can take days.. The insurance company will be charged for storage of the car before it can be looked at. Then £200 an hour for diagnostics. In the end, the insurance company could potentially end up with £4,000 bill for diagnostics alone. Then they have to wait for parts. (A courtesy car costs them ~ £150 a day.) Pay the dealer for repairs (some dealers charge £800 just for a bumper respray).
As soon as the insurance company find out the car doesn’t start, the answer is known: write-off.
In this example, if the potential repair bill would be over £10,000 it would be recorded as Cat-C.
If the potential bill would be less than the value of the car, it would be Cat-D.
All insurance write-off Category-C and Category-D Cars are then sold at a specialised auction for 50% – 70% of the value. In some cases, the insurance companies win more than you think, just for taking your car off you.