You had a car accident, and your insurer deemed it a total loss. Can you keep your car, and will doing so affect your insurance? In most cases, you have the choice to keep your vehicle if it’s deemed a total loss after a car accident. Find out what constitutes a vehicle write-off in Ontario, and how keeping your car affects your settlement.
What Constitutes a Vehicle Write-Off?
Typically, a vehicle is considered a write-off if the total damage exceeds its value. After an accident, the insurance company will send a claims adjuster to assess the damage to your vehicle. If your automobile meets one of the following criteria, it will be considered a total loss.
- The repair costs exceed the car’s value.
- There is structural damage, or the car is not fixable.
- In some cases, deployed airbags will constitute a write-off.
Usually, your insurer will offer a settlement depending on your car’s actual cash value. Reimbursement is generally less if you decide to keep the write-off, and higher if you allow the insurance company to keep the salvaged vehicle. Below are factors that influence the actual cash value of your car.
- Number of Kilometers
- Type of vehicle – make, model, and year
- Condition – The current state of the engine, tires, interior, and exterior
- Custom features
- Current selling price
Under the Insurance Act, vehicle owners can request an appraisal appeal if they believe their car is not a write-off. After your vehicle is deemed a total loss, you’ll receive compensation according to your insurance and the details of the accident.
At-Fault Accident
When you’re at fault for the accident, your insurer will file the claim under collision coverage. If you have this optional policy, the insurance company will pay a settlement, minus your deductible, based on your vehicles actual cash value.
No-Fault Accident
If you’re not at fault, your insurer will file your claim under Direct Compensation Property Damage (DCPD). You’ll receive a settlement based on your vehicle’s actual cash value.
Following a total loss, your vehicle will be rebranded and submitted to the Ministry of Transportation of Ontario (MTO).
What is Vehicle Branding?
Branding assigns a “type” to vehicles to indicate if it has been severely damaged in the past. Each vehicle receives one of the four following brands, which is then recorded on your Ontario Vehicle Ownership permit.
Irreparable
The car is a total loss. It’s only useful for scrap or parts, and you cannot drive it again in Ontario (can’t be reregistered with MTO).
Salvage
The vehicle is a total loss, but you can repair it or use if for parts or scrap. If you fix the car, it must be structurally inspected by an official technician. If your vehicle passes the test, it will receive the label “rebuilt.”
Rebuilt
The vehicle was a total loss, received the label “salvaged,” and then repaired to the status of “rebuilt.” To reach the state of rebuilt, the owner needs to provide photographs, receipts, and documents showing damage to the car. You’ll also need to visit a certified technician at the ministry licensed motor vehicle inspection station to get a structural inspection certificate.
None
The car doesn’t have any of the other three brands. It may have damage to a degree that doesn’t meet branding qualifications or was never in a collision.
Where to Find Your Vehicle Brand
You’ll find the vehicle brand in the following documents.
- Ontario’s Vehicle Registration System database
- Vehicle permits
- Vehicle histories
- Used Vehicle Information Packages (UVIPs)
For motorcycles, neither the “salvage” or “rebuilt” brands apply. A bike with frame damage is considered irreparable.
The Settlement and Payment
After the write-off procedure, you’ll receive payment from your insurer in one of the following ways.
- You receive the actual cash value of your vehicle, minus your deductible, and the insurance company keeps the salvage.
- You receive the actual cash value of your vehicle, minus your deductible, minus the amount of the salvage, and you keep the salvage.
If your policy includes a limited waiver of depreciation and is less than two years old, you’ll receive the full amount that you paid for the vehicle new.
Final Thoughts on Vehicle Write-Offs
You can only insure or re-insure vehicles that have a “none” or “rebuilt” branding. You cannot insure cars with an irreparable or salvage branding. Before deciding to keep your salvaged vehicle, you should consider whether or not the repair costs are economically feasible.
To learn more about Vehicle Write-Offs, contact the experts Duliban Insurance at 1-855-385-4226. Our licensed professionals will be happy to answer any questions you have.
