UKMy car was written off. How is the payout calculated?
When your car is written off in the UK, the payout is typically based on the vehicle’s pre-accident market value — what it could reasonably have been sold for immediately before the accident — not what you paid or what it cost to replace.
What the Law Says
The Road Traffic Act 1988 sets out compulsory insurance requirements but does not define how write-off payouts are calculated. Instead, valuation follows common law principles of compensation — aiming to restore the claimant, as far as money can, to the position they were in before the loss.
There is no statutory formula in UK law for calculating write-off payouts. Insurers and courts rely on the principle of 'diminution in value' — the difference between the vehicle’s value immediately before the accident and its salvage value (if any) after.
Section 145 of the Road Traffic Act 1988 requires drivers to have insurance covering liability for damage to property — including vehicles — but says nothing about how that liability is quantified when a car is written off.
In practice, insurers use industry guides (e.g., Glass’s Guide, CAP Clean), local market evidence, and comparable sales data to assess fair market value just prior to the incident.
Statutory Text— Road Traffic Act 1988 s. 145 — Requirement of insurance or security in respect of liability for death or bodily injury or damage to property
What to Do
Gather evidence of your car’s pre-accident condition (e.g., recent MOT certificates, service history, photos).
Obtain at least two independent valuations from reputable sources (e.g., dealer quotes, online marketplaces like Auto Trader).
Challenge the insurer’s offer in writing if it seems low — cite comparable listings and explain why your vehicle was worth more.
If unresolved, escalate to the Financial Ombudsman Service (free for consumers) or consider small claims court for disputes under £10,000.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.