Damaged Beyond Repair? The Truth about Insurance Write-offs

If you have been involved in a bad accident, and the insurance company deems it to be beyond repair, you will be advised to get it written off. Insurance companies will get in quotes on the repair bill, and if it is close to or higher than the current value of your car, they will not repair it. What if you want to keep your vehicle and have an outstanding finance on it that will not be covered by the insurance? Not many motorists are aware that they don’t necessarily need to accept the decision, and can seek help outside of the insurance company’s offer. Find out the truth about insurance write-offs, so you can make an informed decision.

Damaged Cars are Often Repairable

Just because the companies working with your insurance company gave them an expensive quote, you don’t have to accept it. You might want to shop around for used spare parts, as insurance company contractors only use expensive, brand new ones. If you are unsure whether or not you can reject the offer of the insurance company, you should consult with car wreck attorneys who can advise you on the next steps. You need to know that just because the car is not economical to repair at one garage, it doesn’t mean you cannot seek cheaper options.

Your Insurance Might Cover Buying the Car Back from the Finance Company

If you don’t want to change your car, or cannot get a good finance deal, you might decide to buy it back from the finance company. Make sure that you get a good deal. This way, you might have some money left from the insurance payout to get the repair work carried out yourself. This is an option that not many people consider, however, it can be the most cost-effective for many. You might be able to keep your car after all, and cancel your lease agreement, freeing up some monthly cash.

Car Wreck and Damage Categories

There are different car damage categories, ranging from A to D. A category A car is doomed, as it has a damage so serious that it needs to be broken down. This doesn’t mean that you might not be able to recover some of your cash by selling the car to a company that specializes in your make. Category B cars are seriously damaged, and can be sold for parts. Category C and D car wrecks are slightly damaged, and might even be OK to drive, but repairing them would cost more than their market value, so they are written off. When making a decision about repairing the car, insurance companies take into consideration various costs, such as courtesy cars, inspection fees, and so on. Therefore, if your car is a category D write-off, you might want to do your own research and investigation.

Auto Insurance Companies Are in the Business to Make Money

You need to look at the categories and the decisions of the insurance company from their profit-oriented perspective. Car insurers will only take into consideration the current value of your car before the crash, and not the amount you owe on the finance deal. This means that you will be left with a huge gap that needs to cover. Therefore, it is easier for auto insurance firms to write off your car and pay out the current value than to spend time looking into the small details.

You Will Never Get Your Investment Back Unless You Have Gap Insurance on Your Finance Deal

Let’s face it. If you buy a brand new car, as soon as you drive it around the corner, you lose a couple of hundred dollars. Put a few thousand miles on the clock, and you have lost even more. Some finance deals are designed to make you pay the interest first, then the borrowed money. This means that the value of your car will go down much faster than the amount of outstanding finance. You might consider taking out a GAP insurance that will cover the difference between the insurance payout when you damage your car and the outstanding finance. However, if you take this cover out, you will end up with a much higher monthly cost just to have an auto on the road.

Being involved in a car accident is stressful enough. Being told by your insurance company that your car is not economical to repair can make things even worse. Carefully consider your options and don’t take the insurance people’s word for granted.

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