Car Write-Offs – An Insurance Guide


July 10, 2024
Team Pineapple

Good on you for owning a vehicle. Better still, if you have it insured. 

As a vehicle owner, you recognise that with great responsibility come great risks, namely theft, accidents and other dangers. 

In insurance, we call these “perils”. Some are minor, causing minimal damage to your car, and simply require a mechanic's skilled touch. 

Other perils, however, are so hazardous that they can render your ride useless. In this state of total vehicle loss, we refer to your vehicle as a “write-off”. 

Pineapple’s comprehensive insurance guide is the only essential resource you’ll ever need. Read on as we explore the nuances of vehicle total loss and salvage value assessment and help you navigate South Africa’s insurance claims process with relative ease.

Our article covers the following topics:

  1. Understanding Car Write-Offs
  2. Factors Influencing Write-Off Decisions
  3. Insurance Claims Process for Car Write-Offs
  4. Determining Salvage Value
  5. Next Steps After a Car Write-Off
  6. Understanding Insurance Terms and Coverage
  7. Legal Considerations and Rights of Policyholders
  8. Frequently Asked Questions (FAQs)

Understanding Car Write-Offs

Firstly, what is a car write-off? 

A written-off car, or vehicle total loss, occurs when an insurance company or provider deems an automobile too damaged or expensive to repair compared to its current retail value*. A major collision, accident, or other significant incident usually causes damage to this extent.

The decision to declare a car as a write-off is based on a thorough assessment and a cost-benefit analysis.

Some car insurance policies typically dictate the threshold for a write-off. This could be a specific percentage of the car's value (for example, damage to about 49% of the vehicle or more) or a clear definition of "uneconomical to repair."

And if all that information wasn’t enough, there are also different types of write-offs to consider. 

Sometimes, the insurance company might declare your car a write-off but still allow you to repurchase it at salvage value—provided that the vehicle is not financed, of course!

Salvage Value definition, what are car write-offs and how does salvage value work

This value represents the car's remaining worth after the accident and is usually determined by an assessor. 

You can then choose to repair the car yourself or sell it for parts and, at least, make some money from your misfortune. This is called ‘repairable write-off’. 

But again, this only applies to non-financed cars. 

(P.S. If you choose to sell the car for parts or as scrap metal, the returns might be lower than the salvage value offered by your insurance company.)

However, if the vehicle is regarded as too unsafe or extensively damaged for repairs, it will be declared a ‘statutory write-off’. Should this happen, you cannot legally drive the car. Instead, it will be disposed of by a scrapyard or salvage auction.

Should your car be declared a write-off, your insurer will help you through the subsequent claims process. 

The procedure typically involves receiving a settlement offer or other options, such as writing the car off or a disclaimer. 

The insurance company will assess the car's pre-accident value and deduct any applicable excess amounts to determine the appropriate settlement amount. 

You might also have the option to receive the amount in cash or use it towards a new car purchase, but this is typically entirely up to your insurer. If your car is classified as a repairable write-off, you might be offered the option to repurchase it at its salvage value.

However, the above is only true for fully paid-off, non-financed vehicles.

*Pineapple insures your car for its total retail value at the time of cover. This value is the amount or price a retailer might sell your vehicle. 

What Factors Influence Write-Off Decisions?

Classifying a vehicle as a write-off in South Africa differs based on the insurance provider. Here are a few examples of considerations that go into deeming a car as written off:

  • The extent of the damage
  • The repair cost versus the retail value
  • The car’s age and overall condition
  • The availability of spare parts

Remember that older cars with lower retail value might be more susceptible to being declared write-offs than newer models. Similarly, repairing the vehicle might only be feasible if essential parts are easy to find due to the car's make or model.

Let’s better explain these factors for your understanding, which can ease some of that post-accident anxiety.

Your insurer will evaluate your car, primarily focusing on the above vital factors. The extent of the car’s damage is (hopefully) a no-brainer. Vehicles that are unsafe to drive due to compromised structural integrity or extensive frame damage are more likely to be write-offs. 

Afterwards, your insurer will likely compare repair estimates from qualified repair shops with the car's pre-accident retail value. 

As previously mentioned, if the repair cost surpasses a certain percentage of the car's worth or is simply higher than the car's retail value, the probability of a write-off becomes higher.

Lastly, the car’s safety is a crucial consideration. 

Insurance providers prioritise the safety of motorists and passengers on the road. If repairs cannot guarantee the car's post-accident safety, it will be declared a write-off to remove a potential safety hazard.

Insurance Claims Process for Car Write-Offs

Now, let’s dive deeper into how an insurer will likely proceed with the car write-off process. 

What goes on with the insurance car write-off procedure?

Firstly, a virtual inspection. This will typically be assessed by one of our service providers. They will then analyse the extent and location of the damage and evaluate its impact on the car's structure and critical components.

Sometimes, the assessor might consult with qualified repair shops to get accurate repair estimates.

The claims process can sometimes be challenging and, of course, stressful. So, let’s break it down even further so that it’s easier to understand.

A Chat with A Pineapple Champ: Johanna, a Claims Team Manager, Weighs In on Car Write-Offs

We sat down with Johanna, a Pineapple Claims Team Manager, to get insight into the claims process and what documents to prepare when filing a claim.

Here’s what she had to say:

“Upon receiving an assessment report confirming the write-off, we request the client to provide us with the following documents:

  1. ID copy
  2. Original NaTIS document (National Administration Traffic Information System)
  3. Signed NCO document (Notice of Confirmation of Ownership/Sale of Motor Vehicle)
  4. Updated license disk (if expired or expiring soon)
  5. All vehicle spare keys
  6. Collection address for documents and keys–Pineapple usually uses a courier company to collect..”

Johanna added, “Once we’ve received the necessary documents, we’ll compare them to the information we have on the vehicle in our database. This is to ensure we have the correct vehicle model and registered owner captured, plus to ensure there are no discrepancies in the information provided.”

When quizzed about the expected turnaround time for a claim’s finalisation, Johanna said it can take 10 to 15 working days.

“Any delays on the client’s side will inadvertently prolong the process and hold up the resolution.” 

So, for a fast and easy claims process, we strongly encourage clients to work with us to settle sooner rather than later. 

Cooperation is the best way to ensure your claim goes smoothly.

Pineapple policyholders can chat with us directly in-app or at

Claiming Made Easy: Seven Steps to Help You Claim from Your Insurer 

Step 1: At Pineapple, we require our clients to open an accident report at a police station nearest to the accident scene. Here’s a detailed breakdown of what to do if you’re involved in a car accident.

Step 2: The assessment will take place. Help the insurer by complying with their requests, as this will expedite the procedure.

Step 3: You’ll need to gather documents to support your claim, namely the incident report, photos of the vehicle, proof of ownership, and any other relevant information.

Step 4: A damage value evaluation will follow to determine the car’s worth in its damaged state.

Step 5: Your insurer will determine whether your vehicle is a total loss based on the assessment and salvage ratio.

Step 6: If a bank is helping you finance your vehicle, the insurance provider will pay the bank first. You’ll be liable for the shortfall amount if you do not have vehicle credit shortfall as a value-added product. You’re also responsible for paying the relevant excesses.

Provide all necessary documents to finalise the claim process. This will also help expedite the procedure and make receiving your settlement amount easier.

The claims process for a car write-off.

Determining Salvage Value

For those with financed rides, the written-off car is technically still the finance house’s property. So, this next bit of information is not so much for you. Cover your eyes and scroll once.

Having your (fully paid-off) car written off might feel like a total loss, but there is still light at the end of the tunnel. You still have a chance to recoup some value through its salvage value. 

While the car may not function as it once did, some parts are still valuable. This value represents the estimated worth of the car's usable parts or the car itself as scrap metal. So, the salvage value is the amount your vehicle is estimated to be worth at the end of its useful life. 

By now, you already know what factors affect salvage damage (remember, we covered the topic in the ‘What Factors Influence Write-Off Decisions?’ section.) 

And while scouring the internet for more information on this topic, we came across this neat little formula from Peak Frameworks:

The Straight-Line Depreciation method uses salvage value to determine the annual depreciation expense.

Formula: Annual Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life.

Example: A European tech firm buys software equipment for €500,000.00 (R9 879 234.21), estimating its salvage value to be €50,000 (R987 923.42) after a 5-year life span. 

The annual depreciation would be (€500,000 - €50,000) / 5 = €90,000 or (R9 879 234.21 - R987 923.42) / 5 = R1 778 262.16. 

Determining the salvage value is essential as it impacts the payout amount you may receive from your insurer. However, if your car is financed, the insurer pays the finance house first. If there are funds left over, you’ll receive this balance. 

Having this understanding ensures you receive fair compensation for your vehicle’s total loss.

Next Steps After a Car Write-Off

You may be wondering, “My car has been written off. What now?” 

Well, depending on the outcome, you’ll need to consider the options provided by your insurance provider. 

If the vehicle is financed, it technically still belongs to the bank–if a financed vehicle is written off, your insurer will likely first pay the bank. 

The insurer will pay you the balance if funds are left over (and you’ve spent the excess). If your car isn’t financed, this is the only time you’ll have an opportunity to choose whether you keep the vehicle (as a buyback) or write it off.

Remember to weigh the salvage value against the estimated repair costs if you keep the vehicle. 

Ask yourself, “Self is it financially viable to repair the car yourself?” 

Even if you decide keeping the car makes financial sense, if it is deemed unsafe to drive legally, repurchasing it might still make the decision impractical. This mainly applies to non-financed vehicles.

Alternatively, you can pursue solutions like purchasing a brand-new vehicle or exploring other transportation options. After all, car write-offs are disruptive, and no one would side-eye you for making a plan. 

South Africa has various public transport options, such as buses, trains, taxis, and e-hailing services like Uber and Bolt. Check the different routes, schedules, and costs to see if they meet your daily needs.

Connecting with colleagues or neighbours to carpool is another cost-effective option for commuting. But, if you purchase a new set of wheels, remember to factor in the new car’s potential financing and ongoing expenses like insurance and fuel. 

Speaking of insurance, here comes the obligatory reminder to get an obligation-free car insurance quote.

Pineapple covers your car for its total retail value, which is the highest value that you can insure your vehicle for.  This is enough to get you new sets of wheels, just sayin’.

So, click here to protect your ride's total value!

Ensure your new ride meets your needs and budget before purchasing.

Don’t know where to start? 

Consult online resources like Autotrader and dealerships to research car models that meet your requirements. Consider comparing prices and features to find your perfect motor match.

Understanding Insurance Terms and Coverage

Since this article is on a car insurance blog, it’s only natural that we’d touch on insurance, right?

As South African insurance providers, we’re well-versed in our product (talk about an insurer you can trust). However, not everyone has the privilege of knowing this insider info. 

So, allow Pineapple to school you on a few insurance terms.

Key Insurance Terms Explained:

  1. Comprehensive Coverage: This is the highest level of vehicle protection. This insurance policy covers accidents with other vehicles and damage caused by theft, fire, hail, storms, and other events (please refer to your policy for specific wording).

  1. Third-Party Liability: The most basic level of car insurance in South Africa. It covers damage you cause to other vehicles and property and injuries to third parties in an accident for which you are at fault.

  1. Premium: The monthly fee you pay to an insurance company in exchange for coverage under an insurance policy.

  1. Excess: The initial amount you must pay out of pocket before your insurance coverage begins to cover a claim.

  1. Claim: A request made by a policyholder to their insurance company for compensation or coverage of a loss or damage.

  1. Insured Event: An incident that triggers coverage under an insurance policy, such as an accident, theft, or natural disaster.

  1. Peril: A specific event or circumstance that causes a loss covered by your insurance policy, e.g. fire, theft, or natural disaster.

  1. Underwriting: The process of evaluating the risk associated with insuring a person, vehicle, or property and determining the premium accordingly.

  1. Exclusion: Specific risks or circumstances not covered by an insurance policy, as outlined in the terms and conditions.

  1. Coverage Limit: The maximum amount an insurance policy will pay for covered losses, as specified in the policy terms.

You can find more definitions in your policy documents. It might not be the most fascinating piece of writing you’ll ever come across, but it will give you a better appreciation of how insurance works and what you’re covered for.

Here are a few tips for reviewing your car insurance policy to understand your coverage:

  1. Read the policy wording carefully. Take the time to understand your policy's definitions, inclusions, and exclusions.

  1. Pay attention to coverage limits. Insurance policies have limits on the amount they cover for repairs or replacements in various scenarios. 

  1. Not all events are covered by car insurance. Be aware of exclusions in your policy, such as damage caused by driving under the influence.

  1. If anything in your policy is confusing or unclear, don't hesitate to contact your insurance provider for clarification. 

Legal Considerations and Rights of Policyholders

A conversation about the legalities related to car insurance means it’s time for the FSCA (Financial Services Conduct Authority) to enter the chat.

The FSCA regulates insurance providers in South Africa. Key regulations centre on fairness and transparency, information disclosure, and dispute resolution.

As a regulatory body, they’re responsible for overseeing and regulating the conduct of financial institutions and market participants.

In short, they protect your rights, such as requesting all documents and assessments related to the write-off decision from your insurance provider and receiving clear and detailed information about the decision. This can include the assessment process, reasoning, and salvage value determination. 

Furthermore, you can negotiate the settlement amount if you believe it doesn't reflect your car's pre-accident retail value. 

But that does not necessarily mean we’ll adjust values. Please remember our ‘financed versus paid-off) vehicles conditions we keep mentioning.

You can lodge a formal complaint with the FSCA. And if that doesn’t work out, you also have the right to seek legal counsel. Especially for complex situations, for example, if you disagree with the write-off decision or settlement offer.

Along with your rights, of course, come responsibilities. 

For instance, as a policyholder, you are responsible for reading and understanding your policy documents and other information communicated to you by your insurer.

So, we repeat, please read and understand your policy documents. This knowledge empowers you to make informed decisions, avoid surprises during claims, and ensure adequate coverage tailored to your needs.

Frequently Asked Questions (FAQs) about Car Write-Offs

  1. What is a car write-off?

“A car write-off is when the cost of repairing a damaged vehicle exceeds its actual cash value, rendering it uneconomical to repair.”

  1. How does an insurance company determine if a car is a write-off?

“Two key factors are the cost of repairs compared to the car's insured value and the severity of the damage. If it costs more to fix the car than its worth (the vehicle's insured value), or the car is uneconomical to repair, the insurer will likely declare it a write-off.”

  1. What happens to my car after it's written off?

“After a car is written off, the insurer may take possession of it and arrange for its disposal or sale as salvage. Alternatively, the owner may be able to retain the salvage vehicle, although this may affect the settlement amount provided the vehicle is not financed.”

  1. Can I keep my car if it's written off?

“You may have the option to keep your car if it's written off, but this decision depends on various factors like the extent of damage and salvage value–note: if the car is financed, you, unfortunately, cannot keep the write-off.  However, keeping the vehicle may reduce the insurance payout, provided the vehicle is not financed.”

  1. Will my insurance payout cover the total cost of replacing my car?

“The amount you receive as an insurance payout for a written-off car depends on whether the vehicle is covered for its trade, market or retail value. The amount might not always be the full cost of replacing the vehicle, especially if depreciation and excess fees are considered. However, comprehensive insurance policies typically offer coverage based on the car's actual cash value at the time of the loss.”

  1. How does a car write-off affect my insurance premium?

“Depending on the circumstances and your insurance provider's policies, your premium may increase the next time you renew your insurance coverage.”

  1. Do I need to inform the police if my car is written off?

“All accidents must be reported to the police within 24 hours at the police station nearest the accident scene.”

  1. What documentation do I need to provide for a write-off claim?

“You’ll need to provide documents like your insurance policy details, vehicle registration documents, proof of ownership, and any relevant accident reports or assessments. We expand on this question in the section below (A Chat with A Pineapple Champ).”

  1. Can I dispute the decision if my car is deemed a write-off?

“You have the right to dispute the write-off if you disagree with the decision. However, you may have to provide supporting documents like your insurance policy details, registration documents, proof of ownership, etc.”

  1. How long does it take to process a write-off claim?

“Generally, insurers aim to process claims promptly to minimise how much inconvenience you face. However, a claim can take between 10 to 15 working days.”


Whew, you’ve made it to the end; well done and thank you. Although a car write-off can be daunting, this guide equips you to navigate the situation.

Facing a car write-off can be stressful, but you can navigate the process effectively with the proper knowledge. That’s why we've unpacked the process, from understanding what triggers a write-off to the factors considered in navigating the insurance claim steps, just for you. 

We hope you also found our explanations of salvage value and its impact on your payout clear.

Reviewing your car insurance policy for coverage details and exclusions is crucial. And don't be afraid to ask questions and seek clarification throughout the process.

Finally, if you're considering replacing your car, start with a quote for Pineapple’s comprehensive car insurance. Yeah, the one we were telling you about earlier.

While insuring your car for the highest value available, our policy also protects against fire, theft, hijackings, accidental damage, third-party accidents, and acts of nature (a.k.a. weather-related damage, including hail cover).

If that’s not impressive enough, we also offer credit shortfall cover and car hire as optional policy add-ons.

We worked super hard on this piece, and we’re sure it taught you more about car insurance in SA (we hope). 

If it did, please show us your appreciation by getting a quick quote for cheap comprehensive car insurance with Pineapple, the best, most knowledgeable insurtech company in South Africa.

It’ll take 90 seconds, max.

Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice. 

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.

Team Pineapple

Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.

Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.

*We say they’re the finest because we want them to keep writing for us!

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Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.

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