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What is an Insurance write-off? Car write-off categories explained

Your car may have sentimental value and you probably love it even if you’re not especially attached to it. After all, your car gives you the freedom to go where you want, when you want. But to your insurance company it’s just another commodity; something to be disposed of at the stroke of a pen.

As a result, if your car gets damaged and repairing it will cost too much relative to its value, it’ll be written off, at which point it becomes a ‘total loss’. In some cases such cars have to be scrapped but in many instances they’re free to be sold on. Generally, a car will be written off if repairing it will cost more than half of what it’s worth.

For example, you might own a supermini worth £5,000 and you drive into the back of someone at low speed. But as a result the radiator, bonnet, headlights, bumper and front wings all need to be replaced, along with a stack of small bits in the nose. The cost of the parts and labour to put it back together (including repainting) could easily be £3,000-£4,000. No insurance company will sign that off; they’ll just cough up for the value of the car then bin it.

The less a car is worth, the more likely it is to be written off. Sometimes though, high-value cars are written off because they’re damaged so badly. This is where the category (or ‘Cat’) system comes in, as it gives some indication of how badly damaged a car was when it was written off. The groups are Cat A, Cat B, Cat C and Cat D.

What the categories mean:

  • Cat A cars are so badly damaged that they must be scrapped, with very little salvagable.
  • Cat B cars can’t go back on the road and their bodyshell must be crushed, although some parts can be reused.
  • Cat C cars can go back on the road, but repair costs will be more than the pre-accident value. 
  • Cat D cars have sustained damage that’ll cost less than the value of the car to repair. 

While it’s not legal for someone to repair or sell on a Cat A or Cat B car, you could buy a Cat C or Cat D – but you wouldn’t want to do so unintentionally. That’s where an HPI check comes in; invest in one of these and one of the many things that will be checked is whether or not the car has ever been an insurance write off.

With 450,000 cars written off through accident damage each year, the idea of buying one inadvertently will fill you with horror. But not all write-offs are death traps as there are are all sorts of variables. Because repair costs are so high nowadays – both labour and parts – and used car values are so low, write-offs are increasingly common.

Cat D and Cat C explained

Cat D is the least serious of the various write-off categories, which is why there are quite a few advertised in the classifieds, especially at the lower end of the value scale. A cheap car might need just a dented panel and some scraped paint for it to be written off, even though it’s still perfectly safe to drive.

As an example, a 10-year old Ford Fiesta worth £2,000 might end up with a creased door that doesn’t affect its safety or usability at all. But the cost of replacing a door and sorting out the paintwork could easily be well over £1,000, consigning the Fiesta to the scrapheap.

Cat C cars are simply those that have sustained a bit more damage than a Cat D car. The damage may be only slightly more serious, or just that bit more costly to fix, because of added complexity or more costly parts being affected.

The Association of British Insurers (ABI) defines Cat D write-offs: as: “Repairable total loss vehicles where repair costs including VAT do not exceed the vehicle’s pre-accident value.” The same body says a Cat C car is a: “Repairable total loss vehicles where repair costs including VAT exceed the vehicle’s pre-accident value”

Buying a Cat D car or Cat C car

Unsurprisingly, a car that’s previously been written off will be worth less than an equivalent one that hasn’t, no matter how well it’s repaired. How much less is open to interpretation, but it’s reckoned to be anywhere between 25% and 50%.

Buy a Cat D or Cat C car and you may have trouble selling it on, and when it’s returned to the road your insurance company may insist on an engineer’s report being produced to confirm that the car has been fixed properly. Such a report is much like a pre-purchase inspection as it’ll look at the condition of the bodywork and mechanicals and give an insight into whether anything is worn or hasn’t been properly repaired after a shunt.

Cat C and Cat D cars and the law

By law, if a Cat C or Cat D car is sold, its history must be disclosed. So if you’re selling such a car you must be open about it, but if you’re buying you know that consumer law is on your side. But there are no guarantees of course; some unscrupulous vendors will just keep quiet which is why an HPI check is so important. Of every 100 cars checked, four are an insurance write off.

Unwittingly buy a write off and you can take civil action under consumer protection laws – whether it’s from a dealer or a private individual. That’s because sellers can be sued even if they were unaware of the car’s history under the ‘innocent misrepresentation’ clause in the Misdescriptions Act. But this means that if you’re selling your car and it’s been written off at some point, you must ensure you alert any potential buyer of its status – or you could end up in the dock.

Richard Dredge

April 2016