Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

Full Bio →

Written by

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

Full Bio →

Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: May 19, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.

You carry insurance to protect you when you are in a collision or if you have an incident where you need to file a claim.

While no one ever really wants to use their insurance, it is important to prepare for possible scenarios before they happen so that you know how claims are handled and what terms mean before you receive correspondence that is full of terms you may not understand.

If you ever have face a situation where you must file a damage claim because of a collision, theft or vandalism, knowing what the term “insurance write off” means is important.

Read on, and learn about the claims handling process and what it means when your car is deemed a write off by your insurer.

Use our FREE comparison tool above to start searching for the best insurance quotes.

What does it mean if your car is a write off?

You carry insurance to protect you when you are in a collision or if you have an incident where you need to file a claim.

While no one ever really wants to use their insurance, it is important to prepare for possible scenarios before they happen so that you know how claims are handled and what terms mean before you receive correspondence that is full of terms you may not understand.

If you ever have face a situation where you must file a damage claim because of a collision, theft or vandalism, knowing what the term “insurance write off” means is important.

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

What does it mean if your car is a write off?

Write off is a term that is used by insurance claims adjusters to describe a vehicle that will be retained by the carrier instead of being repaired. While this is a common term used throughout the world, in the United States most insurers will use the term total loss instead.

They both mean the same exact thing in the insurance world, but knowing that the two are used interchangeably is important.

Not all cars are considered total losses or write offs when property damage claims are filed.

This is because many cars that are damaged in collisions or vandalized will only sustain a minimal amount of damage that can be repaired at an economical cost.

The cars that are damaged so badly that they are unsafe to be driven or that they will cost more than their worth to repair are another story.

Why is a car written off or classified as totaled?

If you review your personal car insurance policy booklet, it states what your car is covered for and what the insurer will pay for when your vehicle is damaged. For those who carry physical damage coverage, the definition and terms of comprehensive and collision cover applies.

As you read the definitions and terms, you will see that it says that the carrier will pay for either the repair or replacement of your vehicle when it damaged because of a listed peril.

Whether the insurer will pay for repairs or replacement depends entirely on the fair market value of the car and how much the repairs are estimated to cost.

Insurance companies want to pay as little as possible to help you recover from a loss.

It is not economically realistic to pay for repairs if these repairs add up to more than the actual fair market value or actual cash value (ACV) of the car.

Some companies might even totaled when repairs cost less than the ACV of the car.

This happens when a car’s value is depreciated because of the loss and the repair costs and value are very close to one another.

Some carriers may be justified in writing off cars that are damaged so badly that repairs cost 75% of the ACV. This means that a vehicle valued at $10,000 could be considered a write off if the repairs cost $7,500.

What threshold does your insurer use?

The criteria for write offs and when the car is eligible for repair can vary from company to company. This information will more than likely not be disclosed in your policy terms, but you can discover it on your own as a wise consumer by making a quick phone call.

Ask what the total loss ratio is and what limits are set by the claims department so that you can see if the insurer is complying with state law.

If you have filed a damage claim and the insurer has not complied, knowing the state law could support your appeal and help you file a complaint. You can find a list of the Total Loss Threshold allowances in each state by clicking here.

It is important to check with your insurer about valuation and thresholds that are used for write offs before you ever need to file a claim, but if you are in the process of dealing with a total loss claim it is not too late to learn before signing on any dotted lines.

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

When are cars more likely to be write offs?

A car can be written off by your insurer or by the other party’s insurer. The company that has a say is the one who will be responsible for paying out in the loss. Some cars are much more likely to be deemed total losses because of their value.

While there are models that retain their value very well, older vehicles are classified as write offs much more often than newer vehicles. Older cars that are not as valuable and still cost just as much to repair will very often be totaled even when just one are of the car needs repairs.

After a vehicle is written off, they are issued a salvage title. A big reason why older cars are salvaged is because it does not take as much damage for these cars to be total losses.

The cost to replace a fender my be the same for a new and an old car, but the cost of that fender could be the entire value of the car when the car is 10 plus years old. If you are driving an older vehicle around, learning about car insurance write offs could prepare you in the event that you need to file a claim.

What happens when a car is found to be a write off?

You have rights as a policyholder, and knowing these rights is imperative when your claims adjuster calls to tell you that your car is totaled. The insurer still must pay you, and how you are paid depends on whether or not you want to keep your car. Here is a brief explanation of the process so that you know what you should expect:

The Car is Valued and Repair Costs Estimated

Claims adjusters need to assess vehicle repair costs and valuations before they can define a car as a total loss. If the adjuster says that the repair costs are beyond the Total Loss Threshold allowed in the state, then you have the right to review the information that they used to come to this conclusions.

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Disputes on Vehicle Valuation

It is not typically the repair estimates, but instead the valuations of the car that insurers and vehicle owners do not agree on. If you do not agree, you have the right to have value reassessed by an unbiased party.

If your insurer is paying the claim, you can hire an appraiser and then have the appraisal averaged with the insurer’s appraisal. If the other party is paying the claim, you can seek payment through your collision cover and have your insurer pursue reimbursement to avoid a lawsuit.

Your insurer is in business to help you recoup and this is why they will pay when you have collision cover.

Choosing Between Replacement and Retaining Your Car

How much you are going to receive for your damage claim depends on what you decide to do with your car. If the car is totaled and you sign it over to the insurance company to retain, you will receive the fair market value of the vehicle or of comparable vehicles in your area.

Some companies may even give you additional money to buy a replacement if this is written into the policy as a perk.

You also have the option to keep your vehicle if you feel like it can be repaired and still be safely driven on public roads.

If you decide that you want to keep your write off, the insurer will calculate the value of the car and then subtract the salvage value of the car from the total amount of the settlement.

This amount is subtracted because it is how much the insurer can recoup for the car when they sell it at auction.

You will then have to apply for a salvaged title, if you are the title holder, and will be asked to report the totaled car to the Department of Motor Vehicles for an updated registration.

Many people know that they need insurance, but they do not know how their insurance will really work until they file a claim. If you have a total loss, dealing with everything can be stressful when you do not understand how everything works.

For those of you who are not happy with your insurer and how they dealt with a claim, it is time to shop around.

You can compare premiums and then research insurers by using unbiased rating tools that will give you instant rates quotes through only reputable companies. Start quoting, and find an insurer you can trust. Use our FREE tool below now!