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Write Off Formula:
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In Canada, a vehicle is typically considered a "write off" or "total loss" when the cost of repairs exceeds the vehicle's actual cash value (ACV) minus its salvage value. Insurance companies use this calculation to determine whether to repair a damaged vehicle or declare it a total loss.
The calculator uses the standard insurance industry formula:
Where:
Explanation: If the repair cost exceeds the difference between the vehicle's pre-accident value and its salvage value, the vehicle is typically considered a total loss.
Details: Proper write off calculation is crucial for insurance companies, repair shops, and vehicle owners to make informed decisions about vehicle repairs versus replacement. It helps determine the most economically sensible approach to vehicle damage.
Tips: Enter all values in Canadian dollars (CAD). Repair cost should include parts and labor. ACV represents the vehicle's market value before the accident. Salvage value is what the damaged vehicle could be sold for as parts or scrap.
Q1: What is the typical write off threshold in Canada?
A: Most Canadian insurers use a threshold between 60-80% of the ACV, but this can vary by province and insurance company.
Q2: Can I dispute a write off decision?
A: Yes, vehicle owners can dispute a write off decision by providing evidence of higher vehicle value or lower repair costs.
Q3: What happens after a vehicle is written off?
A: The insurance company typically pays the ACV minus any deductible, and takes ownership of the damaged vehicle.
Q4: Are there different rules by province?
A: Yes, provincial regulations may affect write off criteria, particularly regarding vehicle safety inspections after major repairs.
Q5: Can I keep a written off vehicle?
A: In some cases, you may be able to buy back the salvage from your insurance company, but the vehicle will receive a "salvage" title.