Car Write-Offs – An Insurance Guide

Learn what to do if your car is written off, including payouts, financed cars, and next steps. Pineapple explains it clearly.

So, your car’s been written off (breath, we got you). This can be very frustrating, especially when you don’t know the next steps to take. But worry not, because we’re coming in full clutch with all the answers you need.  

TL;DR – Our version of “I’m not reading all that, *SparkNotes pls.”

• Understanding a Write-Off: A car is considered a write-off when the cost of repairs exceeds its value. This decision is made by your insurer based on the car’s market value and the extent of the damage.
• Types of Write-Offs: There are two main categories—’repairable’ and ‘non-repairable’, also known as a ‘statutory write-off’. Repairable write-offs can be fixed and returned to the road, while non-repairable ones are only good for parts or scrap.
• Insurance Payouts: If your car is written off, your insurer will pay out the agreed or market value, depending on your policy. This payout helps you either replace your car or cover some of your losses.
• What Happens Next?: After a payout, the car’s ownership usually transfers to the insurer. You may have the option to keep the car (in some cases), but it will likely be deregistered.
• How to Protect Yourself: Ensure your insurance policy covers the full value of your car and understand the terms around write-offs to avoid surprises in a claim situation.

What Is A Car Insurance Write-Off?

A written-off car, also called a total vehicle loss, is when an insurance company or provider considers your car to be too damaged or expensive to repair compared to its current value. 

It doesn’t always have to be caused by a nasty accident; it can also be caused by any significant incident that costs the car more to repair than it’s actually worth. For example, if your car gets caught in a flood and the engine is completely damaged, the repair bill could be higher than the car’s actual value, making it a write-off.

Now, there isn’t just one type of write-off; you’ve got repairable and non-repairable/statutory. Let’s explain these:

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How Insurers Decide if Your Car Is Written Off

Deciding to declare a car a write-off is based on a few key factors, including a thorough assessment and a cost-benefit analysis.

Insurers look at a few key factors when deciding whether your car is written off. These include: 

These include:

1. Damage:
   Light scratches and dents won’t make your car a write-off, but if the accident caused serious structural damage, messed with the engine, or affected the car’s electronics, it has entered the write-off chat.

2. Repair cost vs retail value:
   If fixing the damage will cost more than your car’s worth, it doesn’t really make sense to repair it. For example, if your car is valued at R80,000 but repairs cost R85,000, insurers will likely declare it a write-off and pay you out instead.

3. Age:
   Older cars tend to have a lower retail value, so it doesn’t take much damage to push repair costs over the edge. For instance, if you’ve got a 15-year-old hatchback worth R30,000 and it racks up R25,000 worth of damage, it could still be written off. Why? Because the car’s overall value is so low that even relatively “smaller” repair costs don’t make financial sense.

4. Safety:
   Even if a car could be repaired, it must still be safe to drive once repairs have been completed. Suppose other critical safety systems are compromised in a way that cannot be guaranteed as roadworthy. In that case, the vehicle will be classified as a statutory write-off. This means it cannot be driven legally on the road, protecting you and other road users from the risk of an unsafe car on the road. 

Also, some car insurance policies dictate the threshold for a write-off. This could be a specific percentage of the car’s value (For example, repair costs that amount to about 70% of the vehicle’s insured value) or a clear definition of “uneconomical to repair”. 

The Car Write-Off Claims Process: Step by Step

So now that we know the two different types of write-offs, let’s get into what you need to do when it comes to making a claim. Please note that this list is not exhaustive. 

There’s more that goes into it, and each claim is different, therefore requiring different things:

Step 1: 

At Pineapple, we require our clients to open an accident report at a police station nearest to the accident scene. 

Step 2: 

Your claim will now be assessed, which is just a fancy way of saying your insurance provider will gather all the facts to decide if your claim is valid and how much they should pay out. This can include reviewing your documents, inspecting the damage, or even getting repair quotes. 

Step 3: 

You’ll need to gather documents to support your claim, namely the incident report, photos of the vehicle, proof of ownership, and any other relevant information.

Step 4: 

A damage value evaluation will follow to determine the car’s worth in its damaged state.

Step 5: 

Your insurance provider will determine whether your vehicle is a total loss based on the assessment and salvage ratio.

Step 6: 

If a bank is helping you finance your vehicle, your insurance provider will pay the bank first. You’ll be liable for the shortfall amount if you do not have a vehicle credit shortfall as a value-added product. 

At least Pineapple offers credit shortfall as a benefit you can add on to your comprehensive coverage, though (hint hint, nudge nudge). 

Step 7:

Provide all necessary documents to finalise the claim process. This will also expedite the procedure and make receiving your settlement amount easier. 

This is what makes Pineapple’s digital claims so amazing. It’s quick, convenient and brings you faster results. And as a Pineapple Claims Team manager, says, “any delays on the client’s side will inadvertently prolong the process and hold up the resolution.”

So, for a fast and easy claims process, we strongly encourage clients to work with us to settle sooner rather than later.

You don’t have to jump through hoops and hurdles to speak to us either. Pineapple policyholders can chat with us directly on our Pineapple app or via our WhatsApp (060 012 3771).

When it comes to reaching out to us, you’ve got options, fam. Whether you’re a texter, a typer, or a serial scroller, we’ve got a way for you to reach us. Chat with us on our in-app chatbot, send us an email at fresh@pineapple.co.za, slide into our WhatsApp DMs (060 012 3771), or visit our website. 

At Pineapple, we’re proudly all-channel, because you deserve to talk to us the way you want, not the way insurance companies usually force you to.

Expert Insight: Pineapple’s Claims Manager 

The aforementioned Pineapple Claim’s Manager sat down with us and shared insights into the claims process and what documents you must prepare when filing a claim.

Here’s what she had to say:

“Upon receiving an assessment report confirming the write-off, we request the client to provide us with the following documents:

1. ID copy
2. Original NaTIS document (National Administration Traffic Information System)
3. Signed NCO document (Notice of Confirmation of Ownership/Sale of Motor Vehicle)
4. Updated licence disk (if expired or expiring soon)
5. All vehicle spare keys
6. Collection address for documents and keys (Pineapple usually uses a courier company to collect…) 

She adds that “once we’ve received the necessary documents, we’ll compare them to the information we have on the vehicle in our database. This is to ensure we have the correct vehicle model and registered owner captured, plus to ensure there are no discrepancies in the information provided.”

What is Salvage Value and Can You Keep Your Car?

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Salvage value is the estimated amount your car is worth after a total loss. Even though the vehicle may no longer be drivable, many of its parts can still be sold, or the car itself can be scrapped for its metal value. In short: It’s the Rand value of what’s left once the dust has settled.

For example, let’s say your car’s retail value is R120,000 at the time of the accident. After assessment, the insurer determines that the salvage value is R30,000. That means the payout to you would be calculated as the retail value (R120,000) minus the salvage value (R30,000), which equals R90,000.

However, if your car is still financed, the salvage option won’t apply to you. In this case, the insurer will first pay the finance house directly to settle the outstanding loan amount. 

What Are Your Options After a Write-Off?

You may be wondering, “My car has been written off. What now?”

Well, before you channel your inner MacGyver, here are a few options you’ve got in your toolbox

1. Accept your payout:
   

   If your car is financed, your insurer will first settle the amount that you owe the bank. Any leftover funds after you’ve paid your excess will be subtracted from the overall amount. If your car isn’t financed, you’ll get the payout directly.

2. Buy back the car (salvage option):
   If your car is fully paid off, you can keep it by paying its salvage value. Weigh the repair costs against the payout to see if it’s worth it.
   Remember: If your car is considered unsafe to drive, keeping it might not be the smartest decision.

3. Replace your car:
   You can always use your payout to get a new set of wheels. Remember to factor in costs like financing, insurance, and fuel before committing.
   
   Another note, because why not: Pineapple covers your car for its full retail value (the highest value you can insure it for). This means you’ll have the best chance of finding a proper replacement. Why not give your baby the full coverage it deserves? 

Get a free car insurance quote today. It only takes 90 seconds, so what’s your excuse?

Your Rights if You Disagree With a Write-Off Decision?

Whenever we talk about the legalities of car insurance, you know it’s time for the FSCA (Financial Services Conduct Authority) to slide into the chat. They’re basically the referees of South Africa’s financial world, keeping insurance providers like us in check. 

Psst, we try not to get on their bad side, though.

Here’s what you need to know and what you’re entitled to when it comes to disputing a write-off decision your insurance provider has made:

Your rights:

• Request all documents and assessments related to a write-off decision.
• Get clear explanations on how the decision was made, including the assessment process and how salvage value was determined.
• Dispute or negotiate your settlement amount if you believe it doesn’t reflect your car’s pre-accident retail value.
• If you’re not happy with how your insurer handled things, you can file a complaint with the FSCA or the NFO (National Financial Ombud Scheme).

Guidance on disputing settlement offers:

• First, ask your insurer for a breakdown of how they calculated your payout.
• If you believe the valuation is too low, provide evidence (e.g., comparable vehicles from Autotrader or dealership quotes).

Remember: financed vs. paid-off cars have different rules, so while you can dispute, that doesn’t guarantee an adjustment. Also, it is important to note what is mentioned in your policy wording, as this will dictate who is ultimately responsible for determining if a vehicle is, in fact, a write-off or not.

Your responsibilities as a policyholder:

• Read and understand your policy documents (yes, you, no skimming).
• Stay on top of updates and communication from your insurer.
• Knowing your policy means fewer unpleasant surprises at claim time and ensures you have the right cover for your needs.

The FSCA exists to ensure the insurance industry remains fair and transparent. But at the end of the day, your best defence is being clued up on your own policy. Knowledge = power (and fewer headaches).

Frequently Asked Questions: Written-off Wheels

1. Do I still pay excess if my car is written off?
   Yes, excess, which is the first amount payable by you after an accident, still applies. Whether your car is repairable or written off, you must pay the agreed excess amount on your policy. Think of it as your share of the bill before your insurer covers the rest. The only difference is that, in a write-off, it comes off your payout rather than repair costs.

2. What happens if my financed car is written off?
   If your car is financed, it belongs to the bank until you’ve paid it off. That means your insurer will first settle the outstanding loan with the bank. If there’s any money left after that (and once your excess is deducted), it comes to you. If the payout doesn’t cover the full loan, you’ll still need to settle the shortfall, which is the difference between what your car is worth and its insured value, unless you have credit shortfall cover (which we highly recommend).

3. Can I buy back my written-off car?
   Usually, yes, but only if the car is fully paid off. In that case, you can repurchase it at its salvage value (what the wreck is worth in its current condition). Before you take this route, make sure it makes financial sense to repair it. Also, if it’s not roadworthy, you won’t be able to drive it even if you own it again legally.

4. How long does a write-off claim take?
   It depends on the severity of the case, but generally, you can expect a few weeks from assessment to payout. First, the insurer needs to assess the damage, determine if it’s a write-off, calculate salvage and retail value, and then finalise the payout. Delays typically occur when documentation is missing or when there’s back-and-forth on settlement values. The faster you provide all required documents, the quicker things move.

5. What documentation do I need?
   To claim from an insurance provider, you’ll typically need:
   

   1. 1. A copy of your ID and driver’s licence

      2. The vehicle’s registration certificate

      3. Proof of ownership (if it’s not financed)

      4. Bank details for the payout

      5. A completed claim form (your insurer will provide this)

6. Can I dispute a write-off decision?

Yes, you can dispute an insurer’s decision to write off your car. Here’s how:

• Request all documents and assessments related to the decision.
• Ask your insurer to explain how the payout was calculated.
• Provide evidence of your car’s market value if you think the value has been estimated too low.
• Escalate your complaint if you’re not satisfied with your insurer’s response.

Just note: Disputing doesn’t always mean the value will change, especially if your car is financed. But you do have the right to ask, challenge, and escalate the matter to the relevant ombudsman if necessary.

Stay Protected, Come Write-off Or High Waters

We get it, having your car written off is stressful. However, knowing your options, understanding your rights, and having an insurer in your corner turns a scary situation into something you can actually handle (without losing your cool).

Ready to make sure your ride is fully covered? Get an obligation-free Pineapple quote in 90 seconds and drive easy knowing you’re protected.

Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice. 

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.