What Defines a “Write-Off”?

It’s important to understand the definition of this often thrown around term.

It’s a question we get from more customers than you might imagine: what is a “write-off”? The term is commonly used to describe the aftermath of a bad accident, but beyond that, many of us don’t know how it is actually defined. Technically, a “write-off” is a term used by the insurance industry to determine if a vehicle is a total loss. The math is simple: if the cost of repairing a vehicle is more than its value (after subtracting the recycle or salvage value), then the vehicle is deemed to be a “write-off”.

How do insurance companies determine if a vehicle is a write-off?

This is the job of an appraiser, who is employed by the insurance company. The appraiser first decides how much the vehicle was worth just before the collision took place. They then compare that figure, minus the salvage value, to the repair costs. The appraiser will also decide if the repairs are feasible.

Factors that go into deciding a vehicle’s value include:

• The year, make, model, and odometer reading of the vehicle.
• Options, overall condition, aftermarket alterations, and unrelated damage.
• 3rd party market surveys that indicate the value of similar vehicles.
• The listed value in things like Kelly Blue Book and AutoTrader.ca

Let’s say you have a 2010 Toyota Corolla that was in an accident. The appraiser would note the following:

• Four-door base spec sedan with automatic transmission.
• 160,000km on the odometer.
• Fair to better-than-expected condition for the interior of the vehicle, and no significant pre-existing exterior damage.

The appraiser will indicate that, through market research, similar cars fetch $6,000 to $7,000 on the used market in your area. After further comparisons of overall condition, the appraiser narrows down the value of your vehicle, pre-accident, to $6,500. You will then be offered a settlement from the insurance company in accordance with the appraiser’s findings and your policy.

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

If you can present your own evidence, you may contest the findings of the appraiser and advocate for a higher payout.

Every province deals with damaged vehicles differently. If your vehicle is labeled “irreparable”, it is illegal to use it for anything beyond parts. A vehicle labeled “salvage” must be repaired and inspected before it can legally be driven. If there are no structural or safety issues, you may be allowed to keep the vehicle and use it as you please.

Want to avoid the insurance companies?

If you suspect your vehicle is subject to nothing more than cosmetic body damage, it may be in your best interest to bring it by our shop. At Island Color, we have decades of experience repairing dings, dents, scrapes, and gouges. We can usually get the work done for less than your insurance deductible AND you don’t have to worry about rate hikes in the future.

For all things auto body, just give us a shout – we’re happy to chat.