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Guide to insurance write-offs

What happens when your car is a total loss?

Man with a clipboard inspecting a damaged car

Recent changes to the way cars are classified as a total loss by insurance companies has just come in to force. Find out what it means when you're told your car is an insurance write-off.

What is and isn't a write-off?

When a vehicle is involved in a serious accident and extensively damaged, it's obvious that it can't be repaired and needs to be scrapped. When this happens car insurance is vital to make sure you're not seriously out of pocket.

But not every vehicle that's written off is only fit for the scrap yard. Sometimes insurance companies classify a car as a total loss (write-off) if it's not economical to repair the vehicle.

So what you consider to be just a panel dent or paintwork scratch, your insurance company may consider to be a total loss if the cost of repairing the damage is more than half the value of the car, for example.

Salvage categories

To help drivers understand the different types of total loss, insurance companies classify write-offs in one of four ways. These are called salvage categories.

These categories came in to force ten years ago, and have recently been updated with the hope that they'll lead to more cars being repaired rather than simply written off for commercial reasons.

Category A

These cars are damaged beyond repair and must never be driven again. The car will be crushed and no parts can be salvaged.

Category B

These cars are unsuitable for repair and cannot be driven. However, useable parts can be salvaged and recycled.

Category S

These vehicles have damage to the structural frame or chassis, which can be repaired, but the self-insured owner or insurer has decided not to repair the vehicle.

To make it easier for car buyers to tell whether a car has been involved in a crash that has led to a structural repair, category S vehicles will have their vehicle registration document (V5C) marked with an S and include the wording:

"This vehicle has been salvaged due to structural damage but following a technical evaluation declared suitable for repair."

This will help buyers to be aware that the vehicle they're looking to purchase has been damaged and to check that any repairs have been properly carried out.

Category N

These vehicles have no structural damage and can be repaired, but the self-insured owner or insurer has decided not to repair the vehicle.

Even though the car may not have structural damage, it may still need work on safety critical parts, such as steering, brakes and suspension, so buyers should be aware of any repairs carried out.

Deciding what to do with a written off vehicle

If your car is deemed to be in salvage category A or B, then there's not much you can do about it. The car is unfit to drive and you won't be getting it back.

That's one of the reasons to take out car insurance in the first place. Your insurance company will pay you the going rate for a similar car from a reputable dealer in your area, less the excess on your policy.

However if your car is classed as category S or N, you can choose to take the write-off value from the insurer and buy a different car, or you may be able to keep your car for repair, subject to your insurer's retention guidelines.

If your car is deemed to be in salvage category A or B, then there's not much you can do about it.

What happens after your car is written off?

When you accept the pay out from your insurance company, you no longer own the car. You need to let the DVLA know that the insurance company (or their agent) is now the legal owner of the vehicle.

You can do this by completing the Notification of Sale slip on your vehicle registration document and sending it back to the DVLA.

If your car is written off and it's less than 12 months old, LV= provides 60 days for you to transfer a new vehicle onto your existing policy. LV= includes new for old car replacement as part of your comprehensive insurance policy, so you may be eligible for your car to be replaced with a new one of the same make, model and specification for no extra cost.

Buying LV= car insurance is quick and easy