What happens if your car is deemed a write-off?

What is a write-off? It’s a term commonly used when the insurance industry determines your vehicle to be a total loss. In other words, the cost to repair your vehicle after a collision is more than its value after subtracting the recycle or salvage value. In such cases, we offer you a settlement that is based on your policy coverage.

How do we determine whether your vehicle is a write-off?

An appraiser calculates how much your undamaged vehicle was worth immediately prior to the collision and compares the repair costs to your vehicle’s actual cash value, less its salvage value. They then determine if repairs are feasible.

Our appraisers use several factors to help determine your vehicle’s value. Primarily:

• The year, make, model, and odometer reading.
  
  
• The type of engine, options, and overall condition, noting unrelated damage and aftermarket equipment added to the vehicle; careful consideration determines if these additions really add value to the vehicle.
  
  
• Independent market survey reports, indicating sales of similar vehicles of the same year, make and model.
  
  
• The value listed in industry-standard publications, websites like AutoTrader.ca, and dealer and classified ads.

For example, if your 2012 Honda Civic was in an accident, our appraiser notes:

• Four-door sedan LX model with automatic transmission and air conditioning.
  
  
• Odometer reading of 175,000 km.
  
  
• Condition of the vehicle’s interior and exterior, including any prior damage.

Finding several of the same model of Honda Civic for sale in your area ranging in value from $7,500 to $8,500, the appraiser compares your vehicle’s options, mileage and condition, and narrows down an average asking price of $7,900, based on the market findings. The appraiser adjusts the true selling price to determine the actual cash value of the vehicle.

What you can do if your car is a write-off

You have several options for dealing with a write-off:

• If you disagree with the amount of the settlement offer you receive for your car, you can present your own evidence of comparable vehicles.
  
  
• 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,” it can only be used 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. If there are no structural or safety issues, it may be possible to keep the damaged vehicle as part of the settlement. In most cases, it doesn’t make financial sense to keep your damaged vehicle.

Get more information about what to do if you’re involved in a collision, discover some common auto claim myths and find out if your car has any outstanding recalls from the manufacturer.