My then fiancée (she is now Mrs NoMoney) had a car accident 2 weeks before we got married in December and I have learned a bit more about car insurance (and what to do in an accident) that I didn’t know.
Her car was a write-off, but luckily she didn’t sustain any major injuries.
Because the other driver had not originally given neither his drivers license number or car registration number, it could have been classed as a ‘hit and run’ (even though he gave his name and address). Luckily the tow truck driver caught up with the other driver.
So I think it is important to know what to do in an accident (and what happens for insurance purposes).
What to do in an accident
If cars are towed away, the police should be called to be at the scene.
If you are involved in an accident, you should stay until the police/tow trucks arrive.
You should also give/receive both your drivers’ license number and the car registration number.
Car accident checklist
It is probably a good idea to print this checklist from NRMA and put it in your car just in case.
The only thing that the NRMA missed is not admitting the accident was your fault (even if you think it was). Another good checklist is here: http://www.insurancecompared.com.au/caraccident.php
What does it mean if my car is a write off?
A car is a write off, when the repairs cost more to fix than the car is worth.
Or, no point fixing it, better get a new one (just like everything else that we buy, but that’s another story).
But given what it can cost to repair a car, it is very easy to be a write off.
So your car doesn’t need to look like it has been in an action movie; if you have a $5,000 car and it will cost more than $5,000 to fix, it is a write off.
And if you have a really cheap car ($2,000 or less) I imagine if you are in an accident and choose to go through insurance your car might be classed a write off even if the damage is minimal.
It is against the law to fix a written-off car to be roadworthy again without written permission (although your insurance company may sell some of the parts).
What happens when the car is a write off?
You either get paid out or a new car (say if the car is less than 2 years old). If you receive a car payment (see more below on what you receive) it would be used to pay out any loans on the car first, with the balance (if any) going to you.
The insurance policy is ended (you will need a new policy if you get a new car).
AAMI had a pretty good table about getting paid out or getting a new car here:
What you receive in a ‘write-off’ payment
If you car is written off the agreed value of your car (listed each year on your comprehensive insurance premium) is the maximum your insurance company will pay you if your car is a write-off.
Also the insurance company takes away the portion of unused car registration and CTP (greenslip) insurance, as they are in essence buying the car from you.
But… the insurance company can also reduce the insurable value by any damage to the car (i.e. repairs that haven’t been done which would reduce the value of the car). Luckily this didn’t happen to Mrs Nomoney even though there was a nick to the windshield and a few minor bumps which she hadn’t bothered to fix. But they could have reduced the amount she received from the insurance company.
Motor Accidents Authority