What does it mean when an insurer writes off a car?

What is a write-off?

A write-off occurs when an insurer determines that the cost to repair a damaged vehicle exceeds a certain percentage of its market value, or when the vehicle cannot be safely repaired to roadworthy standards.

In South Africa, insurers typically consider a vehicle a write-off when repair costs exceed 60-70% of the vehicle's retail value, though this threshold varies between insurance companies.

Types of write-offs

There are generally two categories of write-offs:

• Uneconomical to repair: The vehicle can technically be repaired, but the cost exceeds the insurer's threshold. These vehicles may still be roadworthy after proper repairs.
• Code 3 (Permanently unfit): The vehicle has sustained structural damage that makes it unsafe to return to the road. These vehicles are typically sold for parts or scrap only.

How the decision is made

An assessor inspects the vehicle and prepares a detailed damage report. This report includes:

• Itemised repair costs (parts and labour)
• Current market value of the vehicle
• Assessment of structural integrity
• Recommendation on repair viability

The insurer then uses this information, along with their internal policies, to make the final write-off decision.

What happens to the vehicle?

When a vehicle is written off, ownership typically transfers to the insurer after they pay out the claim. The insurer then sells the vehicle (often at auction) to recover some costs.

In some cases, you may have the option to buy back the salvage from your insurer, though this affects your payout amount.