ON THE ROAD
Repairable write off: What is it and are you insured?
18 October 2021
A repairable write off: What is it?
There are generally two definitions of a write-off; a statutory write-off and a repairable write-off.
Statutory write-off (SWO)
A car so badly damaged it can’t be repaired to a standard that is considered safe for road use. They’re suitable only for use as parts or scrap metal. For example, if a car has been written off due to a heavy rear end collision, undamaged parts from the front end of the car may be used.
Repairable write-off (RWO)
A car that technically can be repaired, but it would be uneconomical to do so. They’re sometimes referred to as an ‘economic write-off’. This usually happens when the cost of repairing a car is higher than its market value.
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You’ve just had an accident.
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We understand you might be feeling a little stressed.
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That’s completely normal.
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Even a minor car accident can give a driver quite a scare.
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Whether your vehicle has sustained major damage or just a scratch your next question might
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be, ‘Should I claim?’
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Whether you lodge a GIO claim or not is entirely up to you.
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But let us walk you through a few scenarios where you might decide to make a claim or
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not.
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When you lodge a claim with GIO, we consider the total claim cost, which can include repairs,
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assessment fees, towing, and hire car.
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With most GIO recommended repairers, repairs are automatically approved so work can start
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straight away and prevent any delays.
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After your repairs are completed, we review the claim and if your excess is higher than
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the total claim cost, we will reimburse the difference.
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At fault claims may affect your GIO Claims Free Savings.
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You may also consider this when deciding whether or not to claim.
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If your vehicle is unsafe to drive, it’s important you don’t continue using it.
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If you’re the first registered owner and have been continuously insured with GIO Platinum
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from within 13 months of your car’s purchase until the time of the total loss, we will
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replace it with a new car of the same make, model, and series if available, or similar
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if not.
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Otherwise, you’ll be paid the amount covered on your certificate of insurance, less any
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deductions.
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In this case, claiming may make sense for you.
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Head to our website to compare levels of cover and what might be right for you.
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While no repair may be needed on your own vehicle, your excess will cover the repairs
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to another vehicle or property, and include other incurred costs like towing, assessment
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fees, and hire car costs.
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Third Party Property Damage, Comprehensive and Platinum Car Insurance provide coverage
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here.
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We’re here to help, so it may be worth claiming in this scenario.
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While stopped at a set of traffic lights a car behind rear ends your vehicle.
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Should you claim?
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If you are found to be NOT at fault, you’ll retain your GIO No Claim Bonus once the claim
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is settled.
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Your excess may also be waived.
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It’s very important for you to provide the at fault party’s full name, full address,
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and vehicle’s registration.
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You got into a car collision involving another party, and they’ve requested you pay their
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car repairs and associated costs.
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Should you claim with GIO or correspond with their insurer?
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It’s your choice.
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But there are benefits to lodging your own claim, as GIO will represent you and correspond
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with the other Insurance company.
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Your excess will apply to your claim, but this can save you time and give you reassurance
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we’ll act in your best interest.
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Legal costs can also be covered when you claim through GIO, whereas they may not be if you
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don’t claim through GIO.
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Speak to GIO before you engage with any third-party claim against you.
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You’ll have the option to pay your excess now or later when making a claim.
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If you choose to pay later, a GIO representative will contact you within two business days
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to discuss your options.
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If you’re charged an excess and ‘pay now’ but are later found to be not at fault, you
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may be refunded.
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If repairs cost less than the excess charged, you will also be refunded the difference less
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any other fees.
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When taking out Insurance, you can choose to lower your premiums to increase your excess.
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This is called voluntary excess.
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It’s important to think about what you can afford if you do ever need to pay an excess.
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There are many scenarios in which you might wonder whether you should claim or not.
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Think about the cost of repairs, your excess, legal costs and whether this claim could affect
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your future premium.
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If someone else is at fault, gathering all their information will smooth out the process
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and you may not need to pay an excess.
Who decides if your car is a repairable write-off and how?
If your car is significantly damaged and you choose to make a claim, an assessor may be sent to inspect the damage. On top of any physical damage, they’ll examine:
- your car’s listed value against other models
- the condition of your car pre-accident (make sure you keep lots of photos!), and
- the distance on your odometer.
An example of a repairable write-off
Consider this: your car's market value is around $5,000. It’s heavily damaged in an accident, and a selection of wrecking yards tell your comprehensive insurer they might pay $1000 for the wreck – ‘salvage value'.
Panel beaters, in contrast, have told your assessor the damage to your car will cost $4500 to repair. It's touch and go here but you could be paid the market value of $5000 while an insurer recovers $1000 from the salvage. The cost all up for your insurer? $4000. In contrast, repairing the car will cost more than $4500. Your car in this case is likely to be written off and classified as an RWO.
It's common among comprehensive insurance policies in Australia for a vehicle that's written off, whether repairable or statutory, to become the property of the insurer. Both SWOs and RWOs are registered with the National Written-Off Vehicle Register (WOVR) and the vehicle’s registration is cancelled.
What happens if my car has been written off?
This will depend on your policy and the terms and conditions listed in your product disclosure statement. When your car has been written off, these items will be assessed:
- the damage,
- its listed value,
- its condition before the accident, and
- the distance on the odometer.
If your car is deemed a write-off and you’re eligible under your insurance policy, you may be offered a payout. This payout might be lower than what you expected, as the following factors will be considered:
- Excess – if an excess is payable on your claim, it will usually be deducted from your insurance payout. An excess may not be payable if another driver is at-fault and you can provide the name, address, and registration details of the at-fault driver.
- Your remaining premiums – even if you pay your insurance premiums monthly, you’ve still agreed to pay a year’s worth to your insurer under your contract. Any outstanding premiums could be deducted from your payout.
- Registration outstanding – the unused portion of your registration and CTP insurance. When determining the market value of your car, insurers will often deduct any outstanding registration and Compulsory Third Party insurance costs from this value.
Unlike an SWO, an RWO can be sold, mostly through damaged-vehicle auctions, or repaired by the owner, if the vehicle was only covered for extended Third-Party Insurance.
Have you considered new for old replacement?
If you have new for old replacement cover and your car is written off, you may be eligible to receive a replacement car – either one of the same models or of the same market value.
Read more about Lifetime New Car replacement for your car with GIO. To qualify, you must be the first owner of your car and register within 13 months of purchase.
GIO Platinum Comprehensive Insurance Cover
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Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Read the Product Disclosure Statement before buying this insurance. Go to gio.com.au for a copy. The Target Market Determination is also available. This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.
The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.
