Car Insurance Basics

Write-Off Versus Repair: The Pros And Cons


November 10, 2014

The role of any car insurance company is to compensate you if your car is involved in a road accident, is damaged or is stolen. In case of accidental damage, the two options that car insurance companies consider when dealing with comprehensive compensation claims is whether to write it off, or to repair it. Generally, insurance companies will take the easiest route to get you back to your feet. Depending on the severity of the accident, there are several pros and cons of either approach.

Option 1: Writing-off a Car

Insurance companies will generally write off a car whose repair will exceeds 50% of the insured value. If your car was insured for 1 million shillings, the insurance company will prefer to write off the car if the costs of repairs exceed 500K.

Pros

  1. You can switch to any car you wish: You don’t have to get an exact model of the car that has been written off. It is up to you to decide which car will suit you.
  2. You can upgrade to a new car: If you have some spare cash, you can take advantage of your payout to upgrade to a newer model. This is also entirely up to you
  3. You can forget about old problems the car may have had: The old car will go away with all its problems.

Cons

  1. You can lose a great car: If your car has certain unique strengths or practical benefits arising from its peculiarities, then you will lose such benefits. This is very true for vintage cars.
  2. You will lose all the sentimental value attached to the car: If this was that beloved first car, or your dream car, the sentimental value will be written off together with the car
  3. You will incurr additional costs: You will need to pay excess if you did not include an excess protector in your policy, and you may also need new tires, new trims etc

Option 2: Repairing a Car

The insurance company may also decide to repair the car for you if the value of repairs does not exceed 50% of the insured value.

Pros

  1. You get to keep a car you love: Repair means that your favourite car will remain with you for the long haul
  2. Some old problems may go away: Let’s say you have had some issues with your radiator, which happens to be damaged after a frontal collision. You will get a new radiator at no cost to you. Cheeky, but just one of those good things that could result from a bad situation.
  3. You can overhaul the car: You can take advantage of the garage time to get some work done on the car. If you needed a new paint job, you could just add that to the job card (but you will pay for the extras), and thereby increase the road life of your car.

Cons

  1. You may find yourself dealing with fresh problems: It is possible that the assessors missed some of the effects of the accident on your car. A repair job may also miss such defects, only for you to discover later that you have new problems with the car.
  2. A repaired car is never the same: Once you see your car damaged, no amount of work on it will erase that picture from your mind. Deep down, you will always know that at some point something went wrong. It is more like a broken bone. You never quite forget
  3. The market value of the car may fall: Buyers tend to shy away from cars with accident histories. Therefore, a repair may make it difficult for you to sell the car when you need to.


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