How to challenge a car write-off

In another article we showed you what to do if your car gets written off while you’re still on finance. Today we’ll show you what to do if you don’t agree with the amount you’re being offered by your insurance company.

The last thing you want to hear when you’ve had an accident are the words – ‘it’s a write-off’. And if these words come while you’re still paying for car finance, it’s even more disappointing. As, potentially, you’ll have to find the money to pay for the finance and possibly a new car too.

But you don’t have to accept what the insurance company say without a discussion; you do have the right to challenge two things. The first thing you may want to challenge is fact that the car has been written off at all. The second is the amount you’re offered, if you accept that it’s a write-off.

First let’s have a quick recap of what happens when your car gets written off.

Zuto is a credit broker, not a lender. Representative 19.9% APR.

What happens when your car is written off?

If you’ve had an accident and your car is written off, your insurance company will contact you and let you know. There are two kinds of write-offs, the first are category A (scrap) and B (break), which are connected to the roadworthiness of the car. If your car is one of these, it means that it cannot be made roadworthy again, regardless of how much money you spend on it.

The second class of write-off are category C (too expensive to repair) and D (total costs make it too expensive to repair). These are connected to the value of the car, and mean the car will cost more than it’s worth to repair, so your insurance company have decided it’s not worth paying for the repairs. As you may have guessed already, you can only challenge the write-off, if your car is a category C or D write off.

Once your insurance company has decided that the car is a write-off, they’ll offer you a settlement amount. This should be equal to the amount that will allow you to buy a like-for-like car, but is often a lot lower than that.

If you disagree with either the car being written off, or the amount you’re being offered for it, you can challenge it at this point.

How do the insurance company decide to write-off a car?

This is easy to answer – they’ll have the car assessed at a garage. If the amount the mechanics quote to repair the car is more than about three quarters of what it’s worth, it’ll usually be considered a financial write-off.

So, how does the insurance company decide on the write-off amount?

Your insurance company will look at the value of your car in the usual places, like the Glass’s or Parkers guides. So before you start any process of challenging what you’re being offered, it’s worth you having a check in the guides yourself to see if what the amount is about right or not. Don’t forget to take into account the condition and mileage of your car, as these will reduce what it’s worth.

If you decide that they’re not offering you what you think the car is worth, challenge it. And what you’ll need to challenge it is evidence. So have a look at the price of similar models online, what are they going for? Start a little list of the locations of the advertisements and, if you can, take a screen shot of the page so you can show it to the insurance company. But, remember to take the condition of the car you’re looking at into consideration, and ask yourself if yours is in the same condition.

You could also ask a number of local dealers what they think the car is worth and, if they’re willing get them to put it in writing. Go find your service history and any other evidence you have of adding value to your car, like four new tyres or a fancy entertainment system. If you have the receipts for these, all the better.

One other thing to remember is that the value the insurance company are working with is not the retail or forecourt price you’d have to pay to buy the car, it’s the trade price.

Finally, if you want an independent valuation, you should also have a look at the Institute of Automotive Engineers. You can search for engineers in your area who can help you. However, if you choose to do this, there will be a cost involved, so you’ll have to think about whether it’s worth it.

What now?

Now you’ve got all your evidence together, you should present it to the insurance company and start your negotiations. You can go one of two ways here, the first is to try and convince the insurance company that you think the car has been undervalued and it’ll not cost more money to repair than it’s worth.

Or you can accept that they are going to write it off, but ask for more money. If you choose the first option, bear in mind that they are not obliged to stop a write off just because you ask them to. So, if they decide to write the car off, but you want to keep it, you can offer to buy it back from them and do the repairs yourself. Well, it doesn’t have to be done by you obviously, we mean if you find a garage who’ll do the repairs for a reasonable cost.

If you want to do this, you should make sure you speak to your insurer as soon as possible. If you don’t, you may find the insurer has disposed of your car before you get the chance to buy it back.

If you choose the second option and would just like to ask for more money than they’ve offered you, simply present your case and see where it goes.

Taking it to the Financial Ombudsman Service (FOS)

There is one other path you can choose, if the insurance company refuse to accept your request for a higher value for your car – the ombudsman. If you’re hearing scary music in your head right now, don’t worry, it’s not half as scary as you may think. In fact, it’s really quite simple approaching the ombudsman these days.

If you want to do this, you’ll have to get it done within six months of reaching a deadlock with the insurance company. There’s more advice on contacting the FOS on their website.