Write-off

Once a vehicle is declared a write-off, the insurer pays out its insured value — retail, market or agreed, depending on your policy — rather than repairing it, and takes the wreck as salvage. If the car is financed, that payout goes first to settle the outstanding finance; if you owe more than the car is worth, the gap is yours unless you hold credit shortfall cover.

The NaTIS code matters long after the claim is closed. A vehicle that is written off and later rebuilt becomes Code 3 (built-up) and carries a permanent record that depresses its resale value and narrows future insurability; a Code 4 is demolished and may never be re-registered. It is why buyers should always run a NaTIS check — a previously written-off car re-entering the market as a cheap bargain is a recurring trap.

Disputes usually centre on the insured value versus what you owe, or on the salvage retention figure if you want to keep the wreck. Knowing your value basis before a loss, and keeping it aligned with what the car is genuinely worth, is what makes a write-off settlement go smoothly.