Unfortunately there are times when a car that has been involved in a shunt will be beyond economical repair. This is commonly
referred to as a car being written off (or the car is a write-off) or a total loss (also known as an insurance total loss).
Apparently over 1000 cars are written off every day.
Once a vehicle is written off it is classed as salvage. There are several categories of salvage. In summary the categories are as follows:
Category A - the entire vehicle must be crushed.
Category B - the vehicle may be broken for parts but it must never be returned to the road.
Category C - possible structural damage but the vehicle is repairable. The cost of the damage would have been more than the
book value of the car if that repairs were carried out at garage prices and official manufacturers parts.
Category D - most likely to be nonstructural damage and should be relatively easily repairable. In this case the vehicle may
have been economical to repair but for other reasons it was written off. For example where the insurer have to provide a
courtesy car the time taken to repair the vehicle would mean that the courtesy car cost together with the repair cost would
be excessive. In a category D scenario it is more likely that the insurer did not wish to repair.
Category X - this is minor damage and easily repairable.
What about "not recorded" accident damaged cars? These have usually not been through the insurance system and as such will
most probably be where the owner was not able to claim for the loss due to their insurance cover (i.e. they have crashed it
themselves or they suffered a hit-and-run and were only insured third-party or third party fire and theft).
If you are faced with a total loss situation you will want to maximise the compensation you are paid. This will of course be
at odds with what the insurance company would like, that being to minimise their loss. You will most probably find that the
first offer you are made for your vehicle will not be to your satisfaction. This is an area where it gets complicated. For
a start it is very likely that your opinion of your vehicle prior to the accident will be slightly different to what the
insurers believe the condition was. It will be very difficult to prove that your vehicle was in a pristine condition in any
Rare, Leased and Financed cars - Agreed Values and GAP insurance
If you have a very special or rare vehicle it is always recommended that you insure on the basis of "agreed value" with your
insurer, whereby you both agree upon what the value of the vehicle is and this forms part of your contract. This is especially important in the case of leased or financed cars (or indeed where loans have been taken to purchase a car) as you could be potentially left with negative equity and having to pay off the remainder of loan in the case where the insurance settlement is not sufficient to cover the loan, finance or lease agreement value. Please read our financed cars section to read more about how to protect yourself from this kind of situation. GAP insurance is another type of insurance which will hedge against this risk. If you have no insurance for a financed or leased car which is subsequently written off then you will be on your own!. You will have to compensate the finance or lease company yourself. Do not let yourself get into that situation.
Maximising and Concluding Settlement Figure
If you find that the insurer has offered you a very low figure of settlement you will need to prove to them that you are not
able to purchase a vehicle similar to yours for the figure they have paid. Usually this negotiation process is relatively
quick as insurers do not like the idea of paying for you to use a vehicle while yours is not driveable. You will need to
obtain some copies of vehicle sales listings. Publications such as autotrader or exchange and Mart. Find vehicles that
match yours as closely as possible in terms of mileage, colour, specification and age. Ideally you should choose vehicles
which are available from dealers, and these are usually the hassle free way of purchasing.
With that information and proof to hand most people manage to obtain a satisfactory compensation on the third try.
Bear in mind if you are claiming on your own fully comprehensive policy, you will receive your settlement less the excess. If
the accident was not your fault and you are able to successfully recover from the third party, you will get this excess back.
If you are paid directly by the third party insurer in the case of a non fault accident, you will not be deducted any excess
in the first place.