Understanding Car Write-Offs in Australia

A car write-off is when your car insurance company ‘writes off’ your damaged vehicle and pays you an amount based on the current market value of your car.

This can be a stressful situation for any car owner, but understanding why and how a car is written off can help relieve some of the stress associated with it.

Let’s take a look at the 5 most common causes that can lead to a car being written off.

Accident or Collision Damage

By far, the most common cause of a car write-off is damage caused by an accident or collision.

If your vehicle is severely damaged due to an accident, and the repair costs exceed 70% of its market value, then your insurer may decide to write off the vehicle rather than pay for repairs.

Theft or Vandalism

If your vehicle is stolen or vandalized beyond repair, then it may be declared a total loss.

If your vehicle has been vandalised, your insurer will assess the cost of repairs against the estimated value of your car in order to determine whether it should be written off or not.

Fire Damage

If your vehicle suffers extreme fire damage repair is often impossible. As such it may be declared a total loss.

Depending on the severity of the damages, insurers may choose to declare a total loss even if repairs are possible as this might be more cost-effective than repairing the vehicle.

Flood Damage

Flood damage can also lead to insurers declaring a total loss depending on how water-affected your vehicle was during the flooding event.

The same rule applies – if repairs would cost more than 70% of its current market value then it will likely be declared as a write-off by your insurer instead.

Mechanical Damage

Even if you do everything right in terms of regular servicing and maintenance for your vehicle, mechanical damage can still occur due to wear and tear over time.

In such cases, insurers may choose to declare a total loss if repairs would cost more than 60% of its current market value – 10% less than what’s required for accident/collision damages due to wear and tear being generally easier (and cheaper) to fix than collision/accident damages.


Car write-offs are unfortunate but sometimes necessary outcomes under certain circumstances that occur during the ownership of any motorised vehicle in Australia.

By understanding what these circumstances are – such as theft/vandalism, fire damage, flood damage, mechanical damage and collision/accident damage – you can better prepare yourself in case you or someone close to you encounters such an issue.

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