Car Write Off: What Happens Next?
Vehicle collisions in Canada are more common than you might expect. In 2016, there were approximately 35,972 vehicle collisions in Canada.
Although there are no official statistics, we can assume that many of these collisions resulted in vehicle write offs.
What is a vehicle write off?
A car write off (also commonly referred to as a total loss in the insurance industry) is a term used to describe a vehicle that has been damaged to the point where it will cost more to repair than its current value.
Are all vehicle write offs related to collisions?
No, there are a handful of other situations in which your insurance provider may consider your vehicle to be a write off car.
A typical example of a non-collision-related write off is when your car is stolen and stripped for expensive parts. If the cost of replacing the parts exceeds the face value of the vehicle, or the car is considered hazardous to drive, then it may be deemed a write off.
How do insurance companies determine vehicle write off value?
We're glad you asked!
As mentioned earlier, a vehicle is considered a write off if the cost of repair exceeds the price of the vehicle.
However, it's important to remember that your insurance provider will base their decision on the market value of your vehicle preceding the event that caused the write off, not the value of a brand new model.
As an example, if you paid $25,000 for your vehicle eight years ago, it's doubtful that you'll receive $25,000 from your insurance provider.
Many insurance providers consider the following factors when determining the value of a written off car:
- Listed value of the model
- Value of similar models in your locale
- Condition of your vehicle pre-collision
- Total kilometres driven
If you'd like to get a general idea of what you'd receive in the event of a vehicle write off, you can use a Canadian car value estimator.
Whether to accept or fight your write off settlement
Many Canadian drivers are unaware that they have the power to either accept or fight a write off settlement from their auto insurance company.
Accepting a settlement from your auto insurance company
Accepting a settlement from your auto insurance provider is relatively straightforward. After receiving an estimate from a certified mechanic and assessing the necessary variables, your auto insurance provider will offer you a number value for your old vehicle.
If you're comfortable accepting the offer, your auto insurance carrier will send you the necessary documents, which you are then responsible for signing.
After a few days or weeks, you'll receive payment via check or direct deposit.
Fighting a settlement from your auto insurance company
There are several reasons why you may want to fight your write off settlement. However, if you're planning on fighting the settlement, we recommend that you create a game plan beforehand.
One of the most common reasons Canadian drivers fight these types of settlements is vehicle modifications. Many drivers take pride in their vehicles and enjoy spending money on improvements or upgrades.
Some examples of popular vehicle modifications include:
- Stereo systems
- Sport seats
- Suspension upgrades
- Aesthetic improvements (tints, rims, paint jobs, etc.)
If you have made any modifications to your vehicle, be sure to keep your receipts. In the event of a collision resulting in a vehicle write off, you'll be able to include these purchases in the overall value of your car.
For an in-depth look at how you can proceed with remuneration, be sure to reference your auto insurance policy. Your auto insurance policy has all the information you need to know about how to fight a settlement.
Getting your vehicle back after a write off
Although most divers are happy to say goodbye, you don't have to part ways with your old vehicle after it's been written off.
Once a vehicle is written off, insurance companies generally auction off or sell the destroyed vehicles to scrap yards. Doing this allows the insurance company to get rid of the vehicle swiftly.
However, it's essential to know that you have the right to purchase the vehicle back from your insurance company. Doing this allows you to scrap the vehicle for parts or work on it as a side project.
In these cases, your insurance carrier will deduct the price of the vehicle from your settlement.
If you'd like to purchase your old vehicle from your insurance provider, be sure to act fast — if you wait too long, you may miss out on the opportunity to do so.
Are you planning on driving your previously written off car?
Before repurchasing your vehicle from your insurance carrier, there are a few factors you should take into account, particularly if you're hoping to drive it in the future.
After writing off a car, your insurance provider will do one of two things: deem it irreparable or give it a salvage title.
If a vehicle gets classified as irreparable, then it can never be legally driven again. On the other hand, if a vehicle receives a salvage title, it can potentially be drivable again. However, to become roadworthy, the car needs to be repaired and professionally inspected.
Furthermore, vehicles with a salvage title generally require high-risk car insurance, which is more expensive than standard auto insurance.
Does writing off a vehicle influence your auto insurance rates?
Collisions involving a vehicle write off are very similar to less serious auto accidents.
If you don't get deemed at fault in the accident, the write off will not influence your insurance premium. However, if you are at fault in the accident, you may see an increase in your insurance premiums.
Furthermore, if you happen to have a spotty driving record (numerous tickets, multiple offences, etc.), you may be required to obtain high-risk car insurance after writing off your vehicle.
With this in mind, it's easy to see why Canadian drivers should always be careful on the road — you never know when an accident might occur.