Demystifying claims: what’s a writeoff?

If your car is considered a writeoff after an accident, it means the cost to repair your vehicle is more than its value after subtracting the scrap value. In this case, we would offer you a settlement for the actual cash value or market value, depending on your coverage.

How do we determine whether a vehicle is a writeoff?

An appraiser calculates how much your undamaged vehicle was worth on the day of the accident, and compares the repair costs to your vehicle’s actual cash and salvage value. They then decide if it makes more sense to offer a settlement based on market value or to repair your damaged vehicle.

Our appraisers use several resources to help determine your vehicle’s worth, primarily:

• The year, make, model, edition and odometer reading.
• The type of engine, interior features and overall condition, noting any unrelated damage and any aftermarket equipment added to the vehicle (careful consideration determines if these additions really add value to the vehicle, or just cost).
• The J.D. Power Market Survey Report, indicating sales of similar vehicles of the same year, make and model.
• The value listed in the industry-standard Red or Black Book, websites like AutoTrader.ca, dealer lots and classifieds.

For example, if your 2000 Honda Civic was in an accident, our appraiser notes:

• Two-door hatchback DX model with standard transmission and air conditioning.
• Odometer reading of 220,000 kilometres.
• Condition of the vehicle’s interior and exterior, including prior damage.

Finding several of the same model of Honda Civic for sale in your area ranging in value from $2,500 to $3,500, the appraiser matches your vehicle’s options, mileage and condition, and narrows down an average asking price of $2,900. The appraiser adjusts the true selling price (after buyer and seller negotiation) to determine the final cash value of the vehicle.

If your car is a writeoff

You have several options for dealing with a writeoff:

• If you disagree with the amount of the cash settlement you receive for your car, you can present your own evidence of comparable vehicles for sale.
• If there are no structural safety issues, it’s possible to keep the damaged vehicle as part of the settlement. Each province has its own Salvage Branding legislation to govern how damaged vehicles can be used in the future. If the car is branded “Irreparable,” you can only salvage it for parts; it can never be repaired or driven. If it’s branded as “Salvage,” you must have it repaired and inspected before you can drive it legally. In the majority of cases, it doesn’t make financial sense to keep your damaged vehicle.