When Is Car Insurance a Write Off

January 27, 2012

To understand car insurance write off, you need to be aware of the law governing car insurance in the UK. If your vehicle has been in an accident and the vehicle costs more to repair than its actual market value, your insurance company will declare your vehicle as a write off. This is because it is cheaper for insurance companies to declare the vehicle as a total loss than make payouts towards repairs.

Declaring a Vehicle as a Write Off:

  • If your vehicle has been declared as a write off, the insurance company will most likely move your vehicle to a salvage dealer. This is because auto repair facilities charge the insurance company daily rates to store the car in their garage.
  • Sometimes auto insurance companies declare the vehicle as a total loss and move the car to a salvage dealer even before informing the rightful car owner. However, it’s important to abide by the terms and conditions of the auto insurance company as they might ask you to pay for storage costs if you choose not to move the vehicle to the salvage dealer.
  • The insurance company will ask you to produce several relevant documents such as the registration document, V5, vehicle maintenance records, loan documents and the car keys. All these documents have to be produced as originals, in order for the claim to be processed quickly.
  • After these documents are submitted, the insurance company will verify the details and contact you regarding your settlement amount. Since there are several fees and insurance premiums that may be deducted from your settlement amount, it’s best to understand your settlement proposal clearly, before you sign your form of discharge.

The car may be declared as a "write off" if it has sustained damage due to a theft, flood, earthquake and fire. You should contact your auto insurance company soon after the incident, to quickly initiate the claims filing process.