Can I keep my car after the insurance write-off?

12 minute read Published on Jan 26, 2024 by BrokerLink Communications

Loss Adjuster Inspecting Car Involved In Accident and taking notes

After getting into a major car accident, there is a chance that your car will be beyond repair, or as the insurance company calls it, a write-off. Even common car accidents can result in a totalled car. Understanding how insurance companies determine that a vehicle is a write-off, how to file a claim for a totalled car, and whether you can keep your car after an insurance write-off are what we will be covering today.

Keeping your vehicle after it is deemed insurance write-off

Can you keep your vehicle even after the insurance company deems it a write-off? The answer is usually yes. You can negotiate with the insurance company if you want to keep your car, even after it is totalled.

If you choose to go this route, the payout you receive from the insurance company will be equal to the actual cash value of your car minus your deductible and the amount of money that your car would have been sold for as salvage.

Why keep your car after the insurance company deems it a write-off?

Generally speaking, most people do not choose to keep their cars after the insurance company has written them off. However, the main reasons for negotiating to keep your car are if you want to salvage the parts yourself because you believe you will get a better rate for them or if you believe that the car can be repaired.

Can you drive a car that’s been written off?

It depends. If the car has been branded as “irreparable,” then you will have no choice but to sell the parts for salvage because trying to repair your car is not an option. However, if it has been branded as “salvage,” then you might be able to have it repaired so that you can drive it again. That said, it must pass a series of tests and have it inspected by a professional mechanic before you can legally drive it.

What is a totalled car?

Before we proceed with this article, let’s make sure that we’re all on the same page about what a totalled car is. A totalled car or “write-off” occurs when a car is damaged following an auto accident, and the insurance company determines that the cost of repairing the vehicle would be more than the value of the vehicle. If your car is deemed a write-off, you will have a few options to consider, which we cover below.

Does car insurance cover cars that are written off?

Car insurance policies vary throughout Canada as there are so many types of auto insurance that can be added to a policy. Depending on what types of coverage you have, your policy may or may not cover you if your car is damaged in an accident and is deemed a write off. The following is a list of the most common types of coverage that come into play if your car is totalled and you need to file an auto insurance claim.

Third party liability coverage

Liability insurance, also known as third party liability car insurance, may cover the cost of replacing your totalled vehicle if you get into an accident that another driver is at fault for.

Please note that it would not be your liability insurance that would come into play but the other drivers that might pay to replace your written-off car.

Third party liability coverage is mandatory in every Canadian province or territory. It is specifically designed to help pay for legal fees, medical fees, and vehicle repair costs should a policyholder get into an accident that they are liable for.

Comprehensive coverage

Comprehensive car coverage is another type of coverage that may come into play if your car is totalled and deemed a write-off. This type of coverage will only apply if the damage to your vehicle occurred while it was parked. Comprehensive coverage is also referred to as parked car coverage because it exclusively protects against non-collision-related risks.

For instance, if your car was damaged in a fire or a tree branch fell on it and it led to extensive damage, your insurance company might deem your car a write-off. In this case, you would file a comprehensive insurance claim to cover the cost of having to buy a new car.

Uninsured automobile coverage

Uninsured automobile coverage is another type of car insurance that may cover you if a vehicle is written off. This type of coverage only comes into play if the damage to your car resulted from an accident that occurred with another motorist who is uninsured, underinsured, or who fled the scene of the collision.

Collision coverage

Next, collision insurance can also help if your car is deemed a write-off. As with comprehensive coverage, this type of coverage is usually optional, except if you lease or finance your car, in which case your lender might require you to purchase it. Whether you are obligated to buy it or not, adding it to your policy is usually smart because it can pay to repair or replace your car if it is damaged in a car accident.

Plus, collision coverage applies whether you caused the accident or not or whether the accident was with another car, an animal, or even a grounded object on the road. In any of these situations, you can still file a collision coverage claim and receive a payout to cover the cost of buying a new vehicle (make sure that you select a coverage limit that accurately reflects the value of your car).

Loss of use coverage

Finally, loss of use coverage may also help if your car is deemed a write-off because it can pay for you to take alternate modes of transportation while you are without a car. For example, loss of use coverage can reimburse policyholders for transportation-related expenses, such as hiring a rental car, taking ride-shares or taxis, or even taking public transit. If your car is written off and it’s going to take a week or two before you can buy a new one, you can claim loss of use coverage during this time.

Writing off a car

Before a policyholder can file an insurance claim for a totalled car, the insurance company must first deem the car a write-off. In order to determine if a car is a write-off, the insurance company will usually have an appraiser evaluate the car.

They will calculate both the market value and the replacement cost of the vehicle in order to determine this. Factors that will be considered include the year, make, and model of the vehicle, as well as its condition, features, the number of kilometres on it, the type of engine it has, and if there was any damage to it before the accident. Typically, appraisers will need to see the car in person.

However, they will also do independent research in order to obtain an estimate of how much it would cost to repair the car. Once their research is complete, they will send their recommendation to the insurance company. If the appraiser determines that the cost of repairing the car is higher than the car’s worth, the insurance company is likely to deem it a write-off.

What to do if your car is written off

If your car is written off, there are various routes you can go down. You can use the insurance payout to help cover the cost of buying a new car to replace your totalled one or you can fight the insurance company’s determination and negotiate a different outcome. Keep reading for a quick outline of how each avenue works.

Use the payout to buy a new car

Your first option is to accept the insurance company’s determination and take the insurance settlement. The payout you receive can then be put toward buying a new car. Since the payout you receive will take into account the depreciation of your car, you likely will not receive enough money to fully fund your new car purchase, especially if you intend to buy a brand-new vehicle.

This means that you should be prepared to pay at least a portion of the cost out of pocket. It is worth noting that if your insurance policy includes a waiver of depreciation, then your payout will be significantly higher - perhaps even equal to what you originally paid for your car, or at least closer to that. Thus, if you have a waiver of depreciation, you may not need to put much of your own money toward a new car because the insurance settlement will largely cover it.

Negotiate for a different settlement

If you agree that the insurance company was correct in determining the car a write-off but you disagree with the settlement amount offered, you might be able to dispute the settlement amount.

In order to do this, you will need to do ample research and perhaps even contact a professional appraiser independently. To successfully alter your settlement amount, you will need to show clear proof that your car is worth more than what the insurance company says. One way to do this is by conducting independent research into similar vehicles and their values.

Dispute the determination altogether

Finally, if you do not believe that your car should have been written off in the first place, i.e. you believe that it can still be repaired, you will need to get in touch with your insurance company as soon as possible.

The next step is to collect evidence that proves the car will be safe to drive after the necessary repairs have been completed. You will also need to show that the cost of these necessary repairs is less than the cost of replacing the car. We recommend reaching out to a professional mechanic (or multiple) to obtain evidence to prove your case.

How to file an insurance claim after your car has been written off

If you get into a car accident and your car is totalled, there are several steps you need to take, including filing a claim with your insurance provider. Continue reading for a step-by-step guide on what to do if you total your car in an accident.

Exchange information with the other driver

If the accident involved another driver, be sure to take down their contact and insurance information. You will need this when filing a claim with your insurance company. The specific pieces of information that you should get from the other driver include their name, phone number, home address, the name of their insurance claim, their licence plate number, their driver’s licence number, their vehicle registration information, and their insurance policy number.

You should also note the make and model of the driver’s vehicle, as well as the circumstances surrounding the accident (the location, road conditions, weather conditions, etc.). Once you have exchanged the necessary information, call a tow truck (if necessary) to get your car to a safe place.

Contact your insurance company to report the accident

Step number two is to contact your insurance company. Reporting the accident to your insurer is of the utmost importance. They will help you determine what kind of claim to file, whether it be a comprehensive claim, collision claim, accident forgiveness coverage claim, or accident benefits coverage claim.

This is also a necessary step because they will be the ones to officially determine if your car is a write-off or not. Be prepared to provide lots of information about the incident to your insurance company. You will also need to fill out several forms in order to file the claim.

Gather your evidence and submit your claim

Next, it’s time to submit your insurance claim for a totalled car. Most Toronto car insurance companies now allow policyholders to file claims online. Once filed, you can expect it to take up to a month to hear back from the insurer.

During this time, an adjuster will be assigned to your case to evaluate the accident. Meanwhile, if it is, in fact, totalled, an appraiser will work to determine the value of the car.

Wait to hear back from your insurance company and decide how to proceed

The final step is waiting to hear back from your insurance company to find out if the car has been deemed a write-off, and if so, how much money the insurer is offering you.

Assuming it has been written off, you can either choose to accept the settlement amount, which can then put toward buying a new car, or negotiate the outcome by disputing the settlement amount or fighting to have your car be repaired rather than written off.

Contact BrokerLink

If you want to learn more about how insurance companies determine that a car is written off or what your options are after your car has been deemed a write-off, contact BrokerLink today. We know the ins and outs of the insurance industry and can help you understand how the entire process works.

We can also give valuable advice on how to file a totalled car insurance claim and what to do when the insurance company offers you a settlement. Plus, as a full-service car insurance brokerage, we offer other services, too.

For instance, we can provide you with free car insurance quotes to give you an idea of how much car insurance costs per month in Ontario. Get started today by using the online quote tool on our website.

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FAQs on car insurance write-offs in Canada

The damage to my car wasn’t serious, why was it deemed a write-off?

The reality is that even if car damage doesn’t appear serious from the outside, the cost of fixing it could still be very high. Recalibrating a car following an accident can be extremely expensive due to the sophistication of car technology that exists today. In addition, certain types of cars, like electric cars, might be more expensive to fix, both in terms of buying replacement parts and labour costs since mechanics need specialized knowledge to repair them. As such, even if you only got into a minor car accident, an insurance company may still deem your car a write-off.

Can I repair my car instead of accepting that it’s written off?

You might be able to fight to have your car repaired instead of it being written off. However, you will need to contact your insurance provider and gather evidence to support the fact that your car would be safe to drive if it is repaired and that the repairs would not cost more than the value of the car. If there is a safety issue with the car, the insurance company is unlikely to allow you to keep the car and repair it yourself. They will likely label it “irreparable.”

What if I want my car to be written off rather than repaired?

If you want your car to be written off instead of repaired, you can dispute the insurance company’s appraisal of the repair costs. As mentioned above, an insurance company will estimate not only the value of your car but also the cost of repairs. If you believe that the insurance company low balled the repair estimate and that it will actually cost far more, you can try to gather your own evidence to show that repairs will actually cost a lot more. If you are successful in obtaining car repair quotes that are much higher than what the insurance company showed you, you can fight to have your car written off instead, as at that point, the cost of repairs may be more than the value of the car.

Do I have to have my car repaired at my insurance company’s preferred shop?

No. You do not have to have your car repaired at your insurance company's preferred shop. While doing so may come with certain advantages, such as convenience because the insurer may pay the auto body shop directly for the repairs, you are under no obligation to use the shop that your insurance company recommends. In fact, before agreeing to do this, it is recommended that you shop around and obtain quotes from different auto body shops as the cost of repairs may vary. You may find a shop that is willing to complete the repair for less. It is worth noting that a professional mechanic may recommend additional repairs. However, none of these extra repairs would be covered by your insurance company - only those relating to the vehicle damage for which you filed a claim will be covered.