Car Insurance Policies with New Car in Case of Write-Off

If your car has been written off after an accident or it is stolen and unrecovered after two weeks, your insurance policy may cover you for a new one. This is known as ‘new for old car replacement’, or new car in case of write-off.

5-Star rated policies with new car in case of write-off

The table below shows a snapshot of the 5-Star rated car insurance policies that offer cover for a new car in case of write-off, sorted alphabetically. These results are based on a 30-39 year-old driver in New South Wales with no extra driver under 25 (the results are the same for male and female drivers at the time of writing), so some products may not be available to you.

What is ‘new car in case of write-off’ cover?

If you have comprehensive car insurance and your car is written off typically within two years of purchase, there is a fair chance your provider will replace the written-off car with a new one. The new car would typically be of equal value to your previous vehicle (based on your pre-agreed coverage). This replacement may also include similar options, accessories or modifications, depending on the details of the policy. It is also worth being aware some car insurers will only replace a car if it has clocked up less than 40,000 kms, whereas some high-end comprehensive policies offer the feature for the life of your vehicle.

Of the 61 comprehensive insurance policies rated by Canstar, 60 of them offer a new car in the event of a write-off. The main point of difference is how much and for how long they will cover you for.

This feature would typically see your insurer give you a new car of the same make and model if your car is written-off due to an insured event, such as a collision, a natural disaster or vandalism/theft. The length of time you’ll be covered for will vary from provider to provider – see your relevant PDS documents for a detailed overview – but the industry norm is about two years from the date of purchase.

What is a write-off?

The technical definition can vary from state to state. For example, according to the Queensland Department of Transport and Main Roads, there are two components of a car that is ‘written-off’:

  • Statutory write-off: a car that is too badly damaged to be repaired to a standard that is considered safe for road use. These vehicles are suitable only for use as parts or scrap metal.
  • Repairable write-off: a car that technically can be repaired, but it is decided it would be uneconomical to do so. This usually occurs when the cost of repairing the car is higher than its market value.

So essentially, a written-off car is one that has been damaged irreparably, either by a natural disaster (such as flooding or fires) another car or another person.

Who decides if a vehicle needs to be written-off?

According to Insurance Law, it is the decision of your insurer as to whether they will:

  • Repair your vehicle
  • Pay you to do the repairs, or
  • Declare your car a write-off.

In the event of your car being damaged, your insurance company may choose to send an assessor out to inspect the damage. This will be set out in your insurance policy’s terms and conditions. A basic excess may apply when making a claim, but your insurer may choose to waive this if you can prove you weren’t at fault in the accident.

Related Article: Car Insurance For Under 25-Year-Olds: What’s The Cost?

Am I eligible for new for old car insurance cover?

Firstly, check that your policy has the ‘new for old car insurance’ feature, either as a standard inclusion or as an optional extra. If you want to upgrade your existing policy to include this feature, there is some criteria you might have to meet. This criteria tends to vary between providers but some common requirements include having no current claims against your car and the car not being involved in an accident under your ownership.

To successfully make a claim using the new for old feature, some providers will require you to also be the first registered owner of the car, meaning second-hand cars may not be covered.

What happens when my car is written off?

Once an assessor has declared your car to be a write-off, it needs to be registered in your state or territory’s written-off vehicle register. This register exists to record the details of vehicles under 16-years of age that have been classified as written-off.

The purpose of this registry is primarily to protect consumers from buying secondhand cars that have previously been written off where the seller does not disclose this information. A car that has been written-off will typically have a much lower resale value, even if it is restored to be roadworthy.

If you disagree with the decision to classify your vehicle as a write-off you can dispute the assessment (but you have a limited timeframe to do this). Once the insurer has declared the vehicle as a write-off, they have one week to notify the register. Once on the register it is usually very difficult to convince them it is not in fact a write-off. You will need to plead your case with evidence such as quotes from repairers and salvage yards and reasonable market value of your vehicle (such as from or to demonstrate the overall costs will be cheaper than the market value.

Can a previously written-off car be removed from the register?

Yes, but only if it has been listed as a repairable write-off. Repairable write-offs have only been classified as so because the insurer deemed it not worth repairing, not because it will never be safe to drive. You can apply to have your written-off car removed from the list by speaking to your insurer.

The rules for doing so vary in each state. In New South Wales, for example, you can only do so in very limited circumstances. It’s up to you to contact your state’s authority and get them to repair your vehicle so it can be ‘de-registered’ and driven again.

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