# Write offs/Total loss



## chillly

Hi guys

When a vehicle is in an accident and has sustained damage what is the criteria used to determine whether insurers write it off or not??


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## Shiny

https://www.abi.org.uk/~/media/File...ce for disposal of motor vehicle salvage.ashx :thumb:


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## Nico1970

It is to do with the principle of 'economic repair' i.e. the balance of cost of repair v. insurance payout.

If the Insurer deems the damaged vehicle beyond economic repair then it will take the vehicle off the insured's hands and pay out under the policy. The problem is the Insurer is obligated to return the Insured to the position he was in before the damage, hence, repairs can be very expensive.

Generally, the Insurer will employ some sort of assessor to make the call on 'economic repair'.


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## Shiny

As Nico says, this is the case as above for category C & D vehicles. It is priced on new parts too, which is why older cars can be written off so easily.

Take my old Accord, the headlights are £400 each so a small front end knock involving damage to headlights will mean a starting point for repairs at £800 just for the headlights, factor in any other parts, paint and labour and it doesn't take much to make an otherwise immaculate car a cat C or D total loss.



Nico1970 said:


> The problem is the Insurer is obligated to return the Insured to the position he was in before the damage, hence, repairs can be very expensive.
> .


Just to clarify (i'm sure Nico meant to say this), but the obligation is to return the insured to the same "financial" position they were in prior to the loss (less any excess). So in other words, if you had a car with a market value of £2k, your financial asset is £2k, so they won't pay out £2.5k to get it repaired. This is where Cat C comes in.

Cat D is where a judgement is made when, for example, your car is worth £2k and the repair costs are £1.8k. Yes, it would mean the Insurers would be £200 better off if they repair the car, but in reality it is not economically viable to spend £1.8k fixing a car worth £2k. They normally work on a % of repairs to value, I can't remember what the % is, but i think it is usually around 70% of market of value. However, the more expensive the car, the more reluctant they are to write it off. If it were a £100k car, then 30% = £30k extra on the claim, so they would be looking to repair it where possible.


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## chillly

Thanks guys. Lloyd is there a simpler answer like over 50% cost to repair means total loss for example??

just seen your other post thanks Lloyd very helpful mate:thumb:


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## Shiny

As per my post above mate, i seem to recall around 70%, but it depends on the insurer, the value of the car etc.

They are more likely to write off a lower value car. The assessors probably have a fixed scale. Also, with substantial damage, some costs are not known until work commences, so if it is borderline with potentially more costs, they would probably write it off rather than take a chance and commence repairs.


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## Nico1970

Shiny said:


> Just to clarify (i'm sure Nico meant to say this), but the obligation is to return the insured to the same "financial" position they were in prior to the loss (less any excess).


 Yes, correct, insofar as money can be used to do that.

I'll leave demonstration of the principle of _uberrimae fidei _to another day _:thumb:_


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## Shiny

Ah, but the Consumer Insurance Act 2012 has gone and ruined all that! lol

_(apologies to the normal people of DW for the lol, insurance law themed jokes are just not funny)._


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