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What happens when your car is a write-off?

By Joy Persaud

Martin Smith, claims manager, technical claims, Aviva Insurance, explains: “Write-off or ‘total loss’ – the two are entirely interchangeable – in the world of motor insurance is a term used to describe a vehicle [that] a motor insurer has decided not to fund repair works for, as it is not economic or viable to do so. They will instead make a cash settlement, which reflects the market value at the time the loss happened.

“Once the claim is settled, the vehicle should either remain with the owner to dispose of, or more likely the motor insurer will take control and ownership as part of the claim settlement,” says Martin.

If the insurer takes control of the vehicle, they will arrange to dispose of it in line with industry approved guidelines and will tell the DVLA and commercial companies such as HPI [Hire Purchase Information] about the category of the write-off. This is so vehicle history checks can be undertaken so a prospective buyer knows a vehicle was previously written off. Such checks also cover whether the vehicle is stolen or has outstanding finance, too.

Write-off categories

So, what do the categories mean? There are currently four write-off categories: A, B, S and N. The old system included categories C and D, which were based on the cost of repair – the latter have not been in use since October 2017.Salvage categories A and B (see table below) are allocated to vehicles that have suffered extensive damage and are beyond viable repair.

“These vehicles have reached the end of their days and must never return to use on the public roads,” says Martin. “The DVLA will not issue V5 registration documents for those vehicles on the database shown as category A or B write-offs.”

Category S and N vehicles can be repaired, although they will carry their salvage category for life. Any repairs should be undertaken by garages that are part of the Thatcham Research’s preferred network – this organisation, funded by UK motor insurers, specialises in vehicle safely, detailed repair methods and vehicle testing, among other things.

“It should be stressed that many other garages not part of an insurer-approved network, will be quite capable of undertaking repairs,” says Martin. “The important thing is wherever work is carried out it is done according to the [Thatcham Research] methods.”

The Association of British Insurers (ABI)  Code of Practice for Categorisation of Motor Salvage requires all motor vehicle salvage to be categorised as one of the following, depending on the damage caused and the value of the car:

Category A: scrap

These vehicles tend to have been completely destroyed and are often burnt out.

Category B: break

This category is for vehicles that may have useable parts that can be salvaged for future use, but the structure – the body shell – must be crushed after parts recovery.

Category S: repairable structural

Such vehicles have suffered damage to their structure. The ABI defines ‘damage’ as any structural part requiring realignment to the vehicle’s original dimensions, or needing replacement. Structure comprises various parts including the front and rear inner wings, sills, front bulkhead, A-post and B-post. Note that major components including the steering and suspension are not classified as structural.

Category N: repairable non- structural

Category N vehicles have not suffered structural damage but repairs to safety-critical elements may still be required.

Should you buy a Cat S or N vehicle?

Martin says category S and N vehicles are not necessarily beyond repair and using second-hand parts can help to make the work cost-effective so a vehicle can be returned to the road.

“When consumers are purchasing a second-hand vehicle it is always advisable to have a vehicle history check carried out which will show if the vehicle has previously been declared a write-off,” he says. “If the vehicle has a history then the purchaser should exercise due diligence in checks to ensure they are satisfied it has been correctly repaired before proceeding.”

Beware that repair work is not independently inspected and there is no guarantee that a category S car will be safe. Paying for an independent mechanic’s inspection so you have a full vehicle report is wise.

“If you are unsure, or if it’s a category A or B being offered for sale, best advice – walk away,” warns Martin.

Insuring a write-off

If you choose to purchase – or buy back – a write-off, your insurance will be affected. While category S and N write-offs can be repaired to a roadworthy standard, some insurers will ask specific questions that could result in them declining to insure the vehicle.

“Vehicles with a previous total loss history are generally worth less than those without, both at time of purchase and again in the event of an insurance claim,” says Martin. “In the event of a further claim, those vehicles with a salvage marker will be worth less. This may make it more likely the insurer will decide not to repair – and if declared a total loss for a second time, the reduced value will be reflected in any claim settlement offered.”

If you wish to keep your category S or N write-off, you should negotiate with your insurer so they sell the vehicle back to you for a mutually agreeable sum. If your vehicle is a category S write-off, you’ll need to send the logbook to the insurer and apply for a new one from the DVLA, at no cost. You won’t need to do this for a category N write-off.

Also, remember that it’s up to you to tell the DVLA that your car has been written off or scrapped – if you don’t, you could be fined £1,000. You also need to apply to keep a personalised number plate if you wish to retain it, or it will be cancelled.

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