What Happens When Your Car Is Written Off in South Africa?

Your car is written off, or treated as a total loss, when repairing it is economically worse than settling it out. When that happens, your insurer pays you the insured value of the car, less your excess and any applicable deductions, and if the car is financed the bank is paid first. There is no universal fixed percentage at which every car is written off.

What does written off mean?

It means the insurer has decided not to repair the car, either because the repair cost is too high relative to the car's value, or because it is unsafe or uneconomical to repair. The policy then settles the claim as a total loss instead of paying for repairs.

How do insurers decide whether a car is a write-off?

They weigh the cost of repairs against the car's insured value and its likely salvage value. If repairing it is worse value than settling it as a total loss, it is written off. OUTsurance, for example, explains that it compares the insured value minus salvage against the repair cost, using historical salvage data, rather than applying one fixed percentage. So be wary of any blanket "60% rule", because there is no universal South African write-off percentage.

How much will insurance pay?

You are paid the insured value of the car at the date of loss, which depends on whether it is insured at retail, market or an agreed value, less your excess and any deductions. Insuring at the right value matters, because it decides your payout.

Is your excess deducted?

Yes. Your excess is deducted from the settlement, along with any other applicable deductions set out in your policy.

What happens if the vehicle is financed?

If your car is on finance, the settlement normally goes to the finance house first to settle what you owe, and any balance is paid to you. King Price's policy wording, for example, follows this order.

What happens if you owe more than the car is worth?

This is the shortfall problem. In the early years a car can be worth less than the finance balance, so the payout may not clear the loan. Credit shortfall, or gap, cover is designed to pay that difference. It is optional but valuable on a financed car.

Retail vs market vs trade value

Retail value is roughly the dealer selling price, trade value is roughly what a dealer would pay for it, and market value usually sits between the two. Agreed value is a figure fixed in your policy up front. The basis you are insured on directly affects your write-off payout, so check your schedule.

The bottom line: a write-off pays your insured value less excess, with finance settled first. Make sure your car is insured for the right value. Compare cover and insured values.

Figures are Savvy Insurance quote data unless a third party is named. Cover depends on your policy schedule and wording, premiums are risk-profile dependent and paid monthly, and Savvy Insurance is a comparison service. Always check your own policy documents for exactly what is and is not covered.

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