Car insurance write off. What you should do after an accident

According to the Automobile Association, South African roads average about 14,000 fatal road accidents each year[1], which is one of the highest rates in the world.  Many of these vehicles are written off. But what does this mean exactly? Discover more about the implications of having a car written off with Dialdirect’s guide about car insurance, and the process and procedures involved with this type of vehicle event. 

What you should do after a car accident?

After you’ve checked on your own health and safety, and the health and safety of passengers or other drivers, you must do the following to assist with your auto claim process:

• Take notes of the incident details such as time, location, and all vehicles involved. 

• Write down as much as possible such as the vehicle registration, make and colour. 

• Include the details of any other drivers involved, such as their names, ID numbers and contact details. 

• Try to note exactly how the incidents took place. Explain in your notes how it started and what measures were taken to avoid the most damage and remain safe. 

• Remember: you are required by law to report any car accident[2] or collision, regardless of how minor it may be, to the police within 24 of the event. 

Why are cars written off?

If you’re involved in a car accident and you have a car insurance policy, the insurer is obligated to bear the costs in order to restore the car to an acceptable, roadworthy condition. However, if the vehicle is beyond repair, in other words, it has too much damage or wouldn’t be financially viable to repair given the extent of the damage, the insurer may elect to write the car off. 

In this case, the policyholder could receive a replacement vehicle (similar make and model) or a cash payout that is the trade or market value of the car.

How does the insurer know if they should have a car written off? The insurer uses a calculated process to determine whether or not to write off a car. Once a policyholder has notified the insurer of an accident and their intention to file an auto claim, the insurance agency will require an insurance assessor to inspect the vehicle’s damages. The report generated will be used to calculate the cost of repair. Comparisons will be made in relation to the cash value of the vehicle. 

The process: what to do if your car is written off?

Following a car accident, you may be informed that your car is written off, which leads many car owners to ask what this means and what course of action should be taken? 

Dialdirect can confirm that there are basically two routes to this scenario, which can basically be broken down into those who do and those who do not have car insurance. Let’s unpack this a little further:

Scenario 1: You do have car insurance

If your car was covered by a car insurance policy, it’s highly likely that the car insurer elected to write off the car. If this is the case, you can start your car insurance claim process and claim the value of your policy from the insurer. This will require you to log an auto claim with your insurance agency and follow their procedure.

Once the money is paid into your account, you can use the funds to purchase a new car or use it as a deposit on a new car, depending on the amount paid and the value of your car insurance policy.

The pay-out received will depend on the following factors:

• The type of car insurance you have - comprehensive car insurance covers the policyholder in the event of a car accident or collision, even if the accident was the policyholder’s fault. 

• Your particular car insurance excess (this is the amount you’re required to pay initially when you make a claim).

• How much is still owing on the car if it is financed

• The depreciation of the vehicle (this relates to the decreasing value of one’s car based on general wear and tear). Most cars depreciate in value at a rate of between 15-20% each year. [3]

Scenario 2: You don’t have car insurance

If your car was not covered by a car insurance policy, your car’s status regarding it being written off is a matter between your personal financial situation and the vehicle inspection agency. If your car doesn’t meet safety regulations after the accident and is deemed unroadworthy by an authorised inspector, your car will be considered illegal to drive. This usually occurs when the chassis has been damaged and is deemed unrepairable in terms of regulated vehicle safety standards. 

However, if your car was passed as roadworthy by an authorised vehicle inspector, you can proceed to get quotes for repair work. If the vehicle is too expensive to repair or if you don’t have enough funds available to cover the cost of these repairs, you can get a personal loan to help out or opt to write the vehicle off yourself and purchase a new one using car instalments. 

Frequently asked questions

• What does it mean to have a car written off?

A vehicle is deemed a write-off if, after a car accident, where the cost to repair is higher than the insured value of the vehicle. 

• Who determines whether your car is a write-off? 

If your car was insured then your insurer will make the decision to have the car written off. If your car was uninsured then the decision to write it off will be up to the relevant vehicle inspection agency.  

• Can I appeal against a write-off?

Yes, suppose you disagree with the insurer’s write-off decision and you have a valid reason to believe that it is financially viable to repair your damaged vehicle. In that case, you are entitled to appeal the decision to the Ombudsman for Short Term Insurance.[4]

• Is it worth buying a written-off car?

This is not advisable. In fact, the South African Insurance Association, which controls the national vehicle salvage database provides information to the public on accident-damaged cars. This is an attempt to prevent poorly repaired vehicles from re-entering the used car market.

Get a car insurance quote for comprehensive car insurance 

Get a comprehensive car insurance policy with Dialdirect. This will ensure you’re adequately covered if your car is written off. Compare car insurance options or get a car insurance quote with us by contacting 0861 007 367 or you can apply online at your convenience. 

Sources:

[1] IOL: South Africa’s road deaths are a national crisis

[2] AA: What to do after a road accident in South Africa? 

[3] Cars: How car depreciation affects the car value

[4] OSTI: The ombudsman for short-term insurance 

SAIA: Vehicle Salvage database 

Disclaimer: Dialdirect Insurance is an authorised FSP insurer. Terms and Conditions online.