What does it mean when a car is a 'write off'?

What is a write-off car?

A car is considered a write-off when it is damaged beyond repair, either for safety or economic reasons. A write-off car is also sometimes called a total loss, especially by car insurance providers.

Usually a car will be written off as the result of a crash or accident, but the cause of the damage is not usually relevant to determining whether a car will be declared a write-off. Instead, the extent of the damage is the focus.

There are two main categories of write-off: statutory write-offs and repairable write-offs.

What is a statutory write-off?

A statutory write-off is a car (or vehicle) that is so badly damaged that there is no way to repair it back to a safe standard, regardless of resources. This is the more clear-cut of the two, once a car has been declared a statutory write-off, it won’t be able to be registered or driven on the road again.

For a car to be a statutory write-off, there will often be damage to safety-critical parts of the car such as the chassis, or the car may have been heavily damaged by flood or fire.

In the case of structural damage, inspectors will assess the roof, pillars, floor pan, firewall, chassis and components, like airbags and seatbelt pretensioners, to determine how significant the damage to the vehicle is.

If your airbags have deployed, chances are other safety functions like seatbelt pretensioners have too. These functions happen when significant force is detected, and is often a sign your car is too damaged to repair.

For fire and flood damage, the assessment is determined by how much of the vehicle was affected by the fire or water. For the latter, the source and type of water doesn’t matter.

Once a car has been determined to be a statutory write-off, it will be recorded on the Written-Off Vehicles Register (WOVR) and only be able to be used as scrap or for salvage parts anywhere in Australia.

What is a repairable write-off?

A repairable write-off is a car that can be returned to a roadworthy condition (depending on the rules in your state or territory), but is considered too expensive to be worth repairing. Sometimes, a repairable write-off is called an economic write-off.

Usually this means your insurer has determined that the cost of repairing the car is greater than the cost of paying you for the insured value and selling the car to a third party (usually a wrecker) for parts.

Older cars with rarer parts are more likely to be considered repairable write-offs given they are often more expensive to repair. Parts for a British car from the 1970s generally won’t be as readily available as parts for a five-year-old Japanese car, for example.

In some areas of Australia, hail damage is also a concern when it comes to how much damage it takes to write-off a car Australia. Because hail damage can be time-consuming to repair to a near-new standard, even a safe car can become a repairable write-off with a relatively small amount of hail damage. For example, a severe hail storm hit Brisbane in 2014 and insurance companies were hit with tens of thousands of claims.

Repairable write-offs will still be recorded on the WOVR, but can be repaired in accordance with relatively strict standards defined by your state’s roadworthy requirements and the vehicle manufacturer.

The vehicle will then need to be reassessed, certified and deemed roadworthy by a government-accredited inspector before it can be registered and driven on the road again.

Even if a repairable write-off becomes roadworthy again, a record of its status as a write-off will remain with the authorities.

A repairable write-off can be insured once roadworthy again, but its history will also affect insurance premiums for your car, leading to higher car insurance costs.

Similarly, selling a previously written-off car should come with an expectation of a lower sale price, and should be approached with transparency to avoid an upset buyer.

What is the Written-Off Vehicles Register (WOVR)

Designed to prevent written-off cars being used on the road again or having their identification details reassigned to stolen cars, the Written-Off Vehicles Register is a national registry each state complies with to ensure there is a record of cars and other vehicles that have been written off.

Accessible usually for state authorities, insurers, wreckers and used car dealers or auctioneers, it allows potential buyers or insurers to determine whether a vehicle has been repaired after major damage in the past.

It also allows authorised users (insurers, dealers or auctioneers, vehicle assessors and wreckers) to add vehicles to the WOVR. Written-off vehicles must be reported, but private owners generally aren’t able to officially declare a car written-off without an authorised party.

If my car is written off, how long before I get paid out? What do I get back?

When a car is written off, your insurance company will likely want to have the process settled as quickly as possible.

After you make a claim, your insurer has 10 business days to contact you, and unless there is difficulty determining whether to write-off your car or not, usually a claim shouldn't take more than a few weeks.

Your payout will be the insured value, minus any remaining premiums to be paid until your next insurance renewal and your excess.

If your car has registration remaining, you should be reimbursed the remaining amount.

Can you dispute a car being declared a write-off?

It’s rare for an insurer to change their decision about a car being written-off, and it must be done before the vehicle is added to the WOVR, but if you’re able to provide evidence that it would be more economical to repair the car than to write it off you may be lucky.

What is a write-off car?

If your desire to dispute the write-off status is due to a desire to keep the car, you can negotiate 'buying' the car from your insurer. While it’s standard practice for the insurer to take possession of a written-off vehicle and pay out the insurance minus remaining premiums and excess.

If you request to keep the write-off car, your insurer will also subtract any salvage value from your payout. Keep in mind that getting a repairable write-off back on the road can be an extremely expensive undertaking.

What happens if my car is written off and it's under finance?

If your car is written off while still under finance, your insurer will first pay your finance provider any amount still owing, before then paying you the remaining balance.

If the insurance payout is less than the money owed on your car’s finance, you’ll be responsible for covering the rest of the balance.

How do the write-off rules differ by state and territory in Australia?

While the rules and processes are relatively uniform in most of Australia, some states and territories have specific rules for written off cars, particularly when it comes to repairable write-offs.

As these rules are fairly situationally specific and can sometimes change depending on legislation, it’s best to check with your local transport authority.