December 2021

What are the different categories of an insurance write-off?

When a car is damaged in an accident one of the first things an insurer will do is assess whether it’s worth repairing. In those cases where they deem that it’s not, the vehicle is technically known as a ‘write-off’.

But what does this mean? The criteria for the different categories of write-off have changed over the years with the most recent updates coming in October 2017. In this blog we’ll take you through some of the most asked questions.

First of all, what is an insurance write-off?

The term write-off is an insurance technical term that has entered the common vernacular and in the process its meaning has become somewhat distorted.

The technical definition of a write-off is that the vehicle has been damaged so much that it’s unsafe to go back on the road, in other words it wouldn’t pass its MOT. Or in the case of more cosmetic damage where the car is still safe to drive, it’s when it’s not economically viable to repair.

What happens when your car is written off?

In the event your car has been damaged structurally and deemed unsafe to drive, instead of paying for repairs the insurer will usually authorise a cash payout for the loss.

In the case of uneconomical repair, it’s a little more complicated as the insurance company uses what’s known as a ‘repair-to-value’ ratio to determine the threshold. 

What is the Repair-To-Value ratio?

The insurer needs two figures to work this out: the current value of the car (prior to the damage), and the cost of the repairs to return it back to this condition. If the ratio of these two numbers is greater than the insurers set repair-to-value ratio, it will fall into the write-off bucket.

For example, if your car is worth £8000 and sustains damage that will cost £4800 to put right, the repair-to-value ratio is 60%. If the insurers deem anything more than 50% to be a write-off, that’s how they’re going to work it out.

Insurance companies typically have a repair-to-value ratio of 50-60% but varies from insurer to insurer and even car to car.

How much damage is required to write a car off?

Not always that much! Some big crashes with obvious structural damage are clearly going to be at risk of the insurance write-off, but in some cases even light cosmetic damage can have the same result.

The main reason for this is that insurance companies have a legal obligation to return your vehicle to the condition it was in prior to the accident. They have to use certain parts and workshops to carry out the work and this can quickly increase their repair costs.

Clearly, a car with a big scratch down the side or a bit of a dent in the rear bumper is still in a perfectly drive-able condition. But is it legal to buy and sell a car that has technically been written off? This is where we get into the different insurance write-off categories.

What are the different insurance write-off categories

There are 4 categories of write-off, A, B, S and N.

Category A: In this category the car is headed for the scrap heap as damage is so bar it could never again be considered roadworthy. It’s so bad that even parts that may look salvageable have to be scrapped.

Category B: Very similar to Category A in that the car will never be seen on the roads again, but it’s possible to salvage a few of the parts.

Category S: These vehicles can be salvaged, but there is structural work required to return them to a roadworthy condition. Until it has been professionally repaired the car isn’t safe to drive.

Category N: Vehicles in this category have only sustained cosmetic damage or other non-structural damage such as to the brakes, electrics or steering for example. The damage may not be structural, but if it’s in this category it means it’s still a write-off as the cost of repair is greater than the agreed percentage value of the vehicle.

What this means to you as the driver, is that Category A and B vehicles are headed for the crusher. But if you’re in Category S or N the insurance company is free to sell it on either to you or a third party, usually through a salvage company specialising in insurance write-offs.

If you know what you’re looking for it’s possible to pick up a bargain when a car has been written off in Category N, as you may be able to repair it to an acceptable standard for less money than the insurance company would have been paid.

However, this also throws up an important ‘buyer beware’ warning as some sellers try to pass off Category S or N as undamaged by obfuscating their past. Therefore it’s so important that you carry out a vehicle history check so you can be confident the car hasn’t been in an accident and end up paying more than you should for an insurance write-off.

So the process is...

  1. You call your insurers to make a claim.
  2. Your insurer looks at your car to assess the damage.
  3. If they decide it's not worth repairing, either because it’s not safe to drive or it’s uneconomical to repair, they’ll tell you it's a write-off.
  4. They’ll get the car valued and they offer you a payout.
  5. If you accept the payout, they give you the cash and they keep the car.
  6. If you're not happy with the offer, you can contest it and try to negotiate for more.
  7. If you particularly want to keep the car, if it’s not category A or B, you can buy it back from them.