How Does an Insurance Company Determine a Write off?

• 

  John Kimble on 08/10/2019 - 08:31

  +6

  When repair costs > value insured. The smash repairer/assessor would advise your insurance company this.

  • 

    TheOneWhoKnocks on 08/10/2019 - 08:32

    +3

    /Thread

  • 

    0burntrice0 on 08/10/2019 - 08:38

    So you mean that it would be 100% of the insured price?

    (assuming that the car would be in safe working condition after the repair if it had one)

    This is what I was under the impression of until different people stated it was a certain percentage of the amount.

  • 

    [Deactivated] on 08/10/2019 - 08:53

    +8

    Not necessarily. It is when repair cost > value insured + price to scrap.

    If a car is insured for $10k, they may write off at $8k if they think they can get $2k for the unrepaired car.

    • 

      John Kimble on 08/10/2019 - 08:55

      +3

      I stand corrected.

    • 

      0burntrice0 on 08/10/2019 - 09:17

      Thanks, I appreciate the help.

    • 

      Hellfire on 08/10/2019 - 09:53

      +3

      They also factor in other things such as lifetime guarantee on repairs, premium remaining, and admin costs.

      • 

        [Deactivated] on 08/10/2019 - 09:57

        +1

        Yeah. Essentially, John Kimble's point is fundamentally correct - the insurer will do what is least costly.

        • 

          Noblejoker on 09/10/2019 - 11:43

          +2

          @[Deactivated]: 30 years in the game and agree with all comments above
          Insurer equation = market/agreed value payout versus
          Repair cost/quote + tow + hire car + allowance for future cost from repair guarantee + margin for other costs or increased repair quote once disassembled + general rounding up
          Depends on the value of car but anything from 30%+ on low value cars to 20% on higher value
          $3K repair on a $5K car (40% margin) could be a write-off depending on nature of damage and the type of vehicle and ease of repair

    • 

      apple2016 on 08/10/2019 - 11:08

      repair cost : I think this can include cost replacement car rental etc…

      • 

        brendanm on 08/10/2019 - 11:13

        The insurer will do what is least risky. If it is a complex repair, and they may have issues further down the line, they would rather write it off than deal with that. If it's straightforward, they will repair, up to the point where it doesn't make financial sense.

• 

  yaozy on 08/10/2019 - 09:58

  +2

  When it isn't financially viable to repair the car, due to either it being more expensive then the cars value, or if the structural integrity of the car has been compromised eg Chassis damage. These are two very different things as it might only cost 5 grand to fix a bent chassis, but no one does this nowadays as you can never repair it back to factory standards

  • 

    [Deactivated] on 08/10/2019 - 10:01

    +1

    Chassis damage is a statutory write off. The vehicle will never be road worthy again.

    • 

      Gracey on 08/10/2019 - 10:55

      +2

      @tshow I always thought this to be correct until recently. My mothers partner bent the chassis on his Navara after hitting a washout in the outback. Came home and insurance ordered it to be straightened and returned to him.

      Pic of the ute

      • 

        ShannonN on 08/10/2019 - 10:59

        I'm surprised he made it home without the coppers pulling him up and defecting it and making it towed only?

        • 

          Gracey on 08/10/2019 - 11:03

          +1

          @ShannonN: I know right. Somehow continued along their holiday and made it 4000km back home to brisbane

          • 

            ShannonN on 08/10/2019 - 11:09

            @Gracey: Gee I bet he drove nice and slow must've steered like a cart

      • 

        [Deactivated] on 08/10/2019 - 11:09

        Not sure. Maybe it is specific parts of the chassis.

        I am not familiar with the Ute ladder chassis but I suspect it may be different for non-passenger vehicle.

        Just a guess.

      • 

        Euphemistic on 08/10/2019 - 11:10

        +1

        That chassis repair is quite different to the chassis repair on a sedan. Two beams or the back of a ute can quite easily be straightened and then strengthened and be better than new.

        Some Navara models had an issue which required repair work to the chassis to strengthen it becuase it was prone to rust.

        • 

          [Deactivated] on 08/10/2019 - 11:15

          @Euphemistic: Thanks for confirming what I was pondering. Saves me some mental capacity for my actual day job… not that much is needed anyway.

• 

  Euphemistic on 08/10/2019 - 11:06

  +1

  The answer is as simple as ‘it depends’. The repair cost might be lower than the insured value by the vehicle is still written off because ‘reasons’.

  It isn’t as cut and dried as a percentage. The age of the vehicle may come into it, wether the damage is easy but expensive to repair or difficult but cheap. Ie replacing a fender bumper and doors might be easy but expensive vs minor chassis/body damage that would make the car unsafe. NSW Has a guide on what will get the car written off in terms of damage to chassis, roof, etc. Then don’t forget that modern cars don’t really have a separate chassis, the body skeleton is the chassis.

  My parents had a car that got hail damaged. They were told it would be a repair job and the insurance co would get back to them when to book it in. Quite a while went by and the insurance co decided to write it off, probably because there was too much hail repair work for the industry to cope with. Unfortunately during that period the car needed new tyres and rego renewed. Money my parent didn’t get back, but they did manage to find some older tyres and stock rims to put on the car and kept the good tyres for their trailer.

• 

  apple2016 on 08/10/2019 - 11:06

  +2

  If the damage to the car has compromised the safety then it would be write off as well.

• 

  paulinspace on 09/10/2019 - 09:00

  Its a really complicated mathematical formula. Cost of repair > cost to replace/payout.

  Poh! My mind is blown.

• 

  jt247 on 09/10/2019 - 10:06

  Insurance will do whatever they see as most viable, depending on cost of repair vs market value of car and the age of it.
  In saying that, I bought a repairable write off, similar story with a not at fault accident, a ute reversing out of a driveway clipped the front of it.
  Insurance paid the owner out $9000 for the car
  I bought the car for $1500, repairs cost $600, go through roadworthy inspections and registration costs (it was cancelled by vicroads due to being listed as written off) and it cost around 4k all up back on the road.
  Car drove perfect and never had any issues with alignment etc.
  The maths doesn't add up to why it was written off for damage/repair costs, maybe because it was a 15 year old car. Insurance does whatever they want basically

• 

  backpaqer on 09/10/2019 - 10:28

  It's been a while since I worked in insurance, but the "repairable write-off" I thought applies when you get your insurer to repair your car when you're at fault and the repairs exceed the amount your car is insured for. However, if someone else is at fault and have insurance coverage, then your vehicle does not have an amount assigned to it and that unless your vehicle is a "statutory write-off" you could have a position that they pay for repairs. The basic premise should be that you are restored to a position financially as if you suffered no loss (as if the event never happened). If they can't repair your car, you should get another one in similar condition.

  Well, that's how it used to be.