We all rely on our cars – whether to get the kids to school, to drive to work, do the weekly grocery shopping, run errands on the weekends, or even just for heading away on a fun Alpine road trip. And luckily for most of us, our driving lives are generally uneventful. You get where you’re going without a hitch.
However, sometimes accidents happen. It can be your fault, for instance, if you’ve rear-ended someone because you didn’t leave enough room to brake. Or perhaps someone has run a red light and a stop sign and has T-boned you. Either way, your car could be deemed to be a write-off by your family mechanic.
So what exactly do you do next? That’s precisely the question we’ll be answering today, namely by sharing all the steps you should take if your car is declared a write-off following a motor collision.
What is a Write-Off?
First, let’s begin by explaining what we mean when we use this term. Insurance companies will pay for repairs for a car or cars that have been in an accident that is either covered by the at-fault party or the driver, whoever caused the accident.
In most cases, the repairs are carried out, and each party gets their car back as good as new. However, when the cost of repair is deemed too expensive to be worth it (above 50-70% of the car’s estimated value), the car is written off, and the insurance company will pay out the relevant party. Sometimes, both cars are written off if the accident was a major one.
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In this case, the insurance company will pay either the market value of the car, taking into account equivalent sales based on the car’s condition and odometer reading, or to agreed value if the car was covered by a comprehensive policy that specified agreed value. Agreed value is when you and the insurance company agree on the value to replace the car.
If you have a third-party car insurance policy, third-party owned vehicles that are damaged in accidents where you’re found at fault may be declared written off, resulting in the insurance company paying out the other party and you paying your excess to your insurance provider. For third-party policy holders, repairs for your car won’t be covered by your insurance provider, so it’s up to you to decide whether your car is worth repairing based on your mechanic’s quotation.
What to Do if Your Car is Written Off
Whether or not you’ve caused the accident, if your car is a write-off, there are a few things to do. In most cases, the insurance company will retain the wreck in order to auction it off to a wrecker, who will break it down and sell it for parts. So, in most cases, all you have to do is wait for the insurance company to contact you to tell you what figure you’ll receive for the payout.
If your car was damaged in a fire or other incident that rendered it a valueless asset and not fit for parts resale, then your insurance provider is likely to pay you the agreed upon value of your car that was laid out in your insurance policy.
If You Think the Payout is too Low
Sometimes, the insurance company will offer you a payout figure that seems too small. In most cases, they get it right, but mistakes can happen. If you disagree with the amount they pay, you can dispute this.
However, if you do this, make sure to do your research. Browse car sales listings for equivalent vehicles with similar odometer readings and catalogue them via screenshots. Present your evidence to the insurance company and you might find that you can receive a higher payout figure. It is always worth a try.
Get A Registration Refund
If you’ve paid for a year’s registration in full, you’ll be entitled to a refund for the portion that you didn’t use. Simply contact the relevant state driving or roads authority, for instance, VicRoads in Victoria or Service NSW in New South Wales. There are online forms you can complete, or you can call up or visit a centre to do this if you prefer. You’ll be refunded, and you can put this cash towards registering your replacement vehicle.
Buy a Replacement Vehicle
If you’re comprehensively insured and you receive a full payout, the next logical step is to go car shopping! How exciting. Hopefully, you can get a comparable vehicle or a brand new one if your car is new, and the payout covers the cost of a purchase. It is worth mentioning that if you were at fault, your payout would be minus the cost of your annual insurance premium, which can reduce the payout figure. This is so the insurance company can recoup some costs of the policy and payout they give you.
Repairable Write-Off
In some cases, your car may be deemed a repairable write-off. This means that the car is not beyond repair but that the insurance company deems it too expensive to repair and not worth the cost to them. In this case, you can request to keep your car, and you’re likely to get what the car is worth minus a salvage amount. So you wouldn’t get the same payout as above. You may even be able to repair the car and drive it again at your own cost.
However, write-offs are recorded on a register, and potential buyers can check this if you ever decide to sell the car. This may mean you might struggle to sell it down the line.
Navigating Car Write-Offs
Nobody wants to deal with the aftermath of a car accident of any scope, but sadly motor collisions are still quite common across Australian highways – even in country Victoria. At any time, your car could feasibly be declared a write-off, so understanding how best to approach the situation can likely provide you with the confidence you need to get a reasonable payout and a swift resolution for all parties involved.
