Data shows that record numbers of damaged vehicles are being ‘written off’ by insurers after an incident, rather than being repaired – including many technically repairable ‘Cat N’ vehicles.
Some studies suggest that almost two thirds of damaged vehicles are being declared a ‘total loss’ – often meaning the cost to repair these vehicles would exceed their market value.
For over a decade, Activate Group has worked alongside some of the UK’s leading motor insurers, MGAs, and repairers to deliver market-leading accident management services – from incident reporting to vehicle repair.
Here, we explore what’s behind the UK’s marked increase in total loss rates, and the steps insurers & their partners are taking to ensure more vehicles can be repaired, rather than being written off.
“While exact figures can be hard to come by, it’s clear to both insurers and policyholders that more vehicles are being written off post incident.
Considering the advanced technology present on newer vehicles, particularly EVs, and the rising cost of repair and ancillary costs like courtesy cars – perhaps some of the reasoning is fairly plain.
“What’s clearer, though, is the need for continued focus on cost-effective ways to repair these vehicles, and to keep customers moving during the process, so insurers can keep more vehicles on the road, reduce customer dissatisfaction and meet sustainability goals.” – Martyn Buchan, Director of Business Development, Activate Group’s Claims Division
When will a vehicle be declared a ‘total loss’ / ‘write-off’?
Insurance companies ‘write-off’ vehicles for a number of reasons. This most commonly occurs when the estimated cost of the claim (including repair and courtesy vehicle costs) exceeds the vehicle’s market value, or the damage is so severe that repair is not feasible.
When a vehicle is declared a total loss, it’s placed into one of the following categories, based on the reasoning behind the insurers’ decision:
- Category A: The damage is too severe for the vehicle to be repaired to pre-accident condition. These vehicles must be disposed of completely, including all parts.
- Category B: The damage is too severe to be repaired, but reusable parts may be reclaimed from the vehicle.
- Category S (formerly C): The vehicle’s damage is structural, and the cost of its repair would exceed the vehicle’s market value.
- Category N (formerly D): The vehicle’s damage is non-structural, but the cost of its repair would exceed the vehicle’s market value.
Stolen vehicles may also be declared a total loss after an initial grace period, if the insurer believes there is little to no chance of recovery.
You can read more about how insurers’ make total loss decisions here
How much have total loss rates risen?
Although exact figures in relation to total loss rates can be challenging to ascertain, some data suggests that rates have risen significantly over the past five years – from around 55% of damaged vehicles in 2019, to 66% in 2025 (YTD).
At the peak of this trend in 2023, data suggests that around 73% of vehicles were being written off post-incident – contributing in part to an 18% increase in insurance payouts in less than 12 months, tracked by data from the ABI.
Why are more vehicles being written off?
But what’s causing the increase in total loss rates? Here are some of the key factors influencing a higher rate of vehicle ‘write-offs’ in UK motor claims:
#1 – The increased complexity & cost of repairing newer vehicles
The current generation of vehicles are ‘smarter’ than ever – with more software, technology, safety features, and sensors to account for during the repair process – not to mention the complex battery systems of EVs.
While features such as Advanced Driver Assistance Systems (ADAS) have made vehicles safer, they’ve also made them more complex to repair, often requiring time-consuming recalibration after even minor incidents. Additionally, these technologies can vary significantly between different manufacturers, requiring repairers to take a different approach for almost every vehicle.
This manufacturer-specific methodology can be challenging for repairers to access, with such a wide range of, particularly EV OEMs, entering the market. When applied specifically to the complexity of battery diagnostics, this often means that any degree of battery damage is immediately declared a total loss.
This means it’s much more likely that repair costs, and projected turnaround (particularly when sensors or batteries become damaged) become financially uneconomical for insurers – leading to higher write-off rates.
#2 – Challenges sourcing cost-effective replacement parts
International supply chains have taken a significant hit over recent years – from the COVID pandemic driving shipping to a halt, to international conflicts and economic challenges increasing costs, risk, and turnaround times for suppliers.
As a result, data shows that the average ‘parts basket’ cost rose by a staggering 35% between 2020 and 2024 – with turnaround times also rising significantly.
Ultimately, this means it takes longer, and costs more, for repairers to source replacement panels, paint, and components for damaged vehicles – making total loss outcomes more likely when a new part is required.
#3 – Higher operating costs for bodyshops = higher repair premiums
Rising energy, paint, parts, and staffing costs have had a significant impact on UK vehicle repairers, leading to slimmer profit margins for bodyshops, and consequently pushing up repair premiums.
On average, repair costs were shown to have increased by upwards of 24% on average since 2019 – pushing an increasing number of claims past insurers’ total loss thresholds.
This is especially hard hitting for lower-value, or older vehicles – for which repair premiums can very quickly outstrip pre-accident value – forcing insurers to declare an economical total loss in many cases.
Even lighter, cosmetic damage can push repairs past the write-off threshold – leading to many roadworthy, and ultimately repairable vehicles being taken off the roads.
#4 – A shortage of skilled repair technicians, particularly for EVs
The body repair skills shortage has been a significant challenge for bodyshops, particularly since the COVID-19 pandemic.
Fewer new entrants, more retirements, and high competition for EV-qualified technicians has left many bodyshops under capacity, and many customers waiting longer for vehicles to be repaired.
The longer repairs take, the more costs are incurred within the wider claim – including longer courtesy car rental periods, and vehicle storage durations. These costs are also considered by insurers when making repair vs total loss decisions, forcing many claims ahead of write-off thresholds, even if the repair itself is economically viable.
The Institute of the Motor Industry estimates that 77,000 more repair technicians will be needed before 2030, in order to deal with the influx of electric vehicles alone. This puts more pressure than ever on repairers and their training partners to secure the next generation of talent – often meaning higher recruitment & training costs, and more competitive salary packages – ultimately inflating repair labour rates further.
#5 – The inflated cost of courtesy vehicles
Increasing hire premiums, due to higher vehicle values and increased demand, are making it more expensive for insurers to secure courtesy vehicles for their customers while repairs take place.
This has a significant impact on overall claims costs, especially for non-roadworthy vehicles, often pushing claims over write-off thresholds.
Additionally, with many repairs taking longer to complete, the cost of hiring a courtesy car to cover these extended periods often becomes uneconomical for insurers.
This is a prime example of how non-repair costs can contribute to increased write-off rates; even though the vehicle itself may be repairable, ancillary costs can still make the overall claim unviable. It’s therefore often more cost-effective for insurers to issue a pay out in these cases, rather than pursuing a repair.
How are Activate Group working to reduce Total Loss rates?
At Activate Group, we’re working hard to help our insurer partners reduce total loss rates – by using data, technology, and a smarter approach to claims deployment.
Here’s how we’re powering this strategy:
Using predictive modelling to intercept common total loss factors
Our intelligent engineering process utilises historic claims data, and predictive analysis to help identify vehicles that are more likely to be written off. This means we can take action earlier in the claim – putting the right practices, parts strategies, and deployment decisions in place from the outset to increase the likelihood of repair.
By making smarter decisions from the start, we help avoid unnecessary write-offs, reduce claims costs, and make sure more vehicles are repaired for policyholders.
Engaging with manufacturer total loss avoidance programmes
Manufacturers are recognising the need to reduce the number of vehicles going to salvage, particularly as a result of high parts & paint costs. Through group business Activate Parts, we’re engaging directly with leading OEMs to reduce the impact, often securing competitive discounts on genuine OE parts, enabling us to avoid total loss outcomes in marginal cases.
Preparing for an EV-led future
As more consumers switch to EVs, we’re adapting our bodyshops, and partnered repair network, to meet the advanced requirements of the next generation of vehicles.
Each of our Activate Accident repair sites is fitted with dedicated EV bays, ADAS calibration equipment, and specially trained technicians – ensuring we can offer competitive pricing & turnaround for even the newest vehicles on our roads.
We’re also partnersing with more EV specialists throughout our partnered network, ensuring we have the nationwide capability required to cater for an increasingly complex vehicle parc.
Using AI to support faster, smarter vehicle inspections
We’re developing intelligent inspection tools that harness AI to assess vehicle damage automatically, and predict repair requirements in minutes. This helps us understand what the damage is, what parts might be needed, and what steps need to be taken to mitigate the risk of total loss.
This enables us to route jobs to the right repairer, implement the most appropriate methodology, and avoid delays that can lead to write-offs – particularly for vehicles with lower market value.
Learn more about Activate Group’s award-winning Accident Management & Repair Solutions.
How are insurers seeking to reduce total loss rates?
Higher write-off rates benefit neither insurers, policyholders, nor the wider industry. They increase claim costs, add pressure to supply chains, reduce repair volumes, and remove roadworthy vehicles from circulation unnecessarily.
To address this, insurers and forward-thinking supply chain partners like Activate Group are taking coordinated steps to reduce the number of total loss decisions being made, including:
#1 – Strengthening engineering processes to explore alternative methods
Rather than relying solely on manual engineering assessments, many insurers are now using historic claims data to fuel predictive analysis, helping to reduce the number of total loss outcomes.
This means identifying vehicles at risk of a total loss earlier in the journey – and ensuring that the correct repair strategy, deployment method, and parts sourcing approach is used from the outset to minimise the risk of a write-off.
By doing this, insurers can avoid delays, reduce overall claim costs, and increase the likelihood of a repair outcome – even for vehicles that may otherwise have been declared uneconomical to repair.
#2 – Sourcing more green & aftermarket components
One of the most effective ways insurers can reduce repair costs is by expanding the range of parts available to repairers.
Many insurers are now increasing their use of ‘green’ (recycled) and high-quality aftermarket parts – offering a more cost-effective alternative, without compromising on safety or repair quality.
This wider choice allows repairers to source the right part, faster – helping to keep repair costs within threshold, and reducing the likelihood of a vehicle being written off due to parts availability or pricing.
#3 – Conducting more ‘SMART’ repairs for roadworthy vehicles
Rather than replacing damaged panels or components outright, many repairers are now focused on carrying out more ‘SMART’ (small area repair targeting) repairs – particularly in cases of cosmetic or non-structural damage.
This includes strategies like paintless dent removal, scratch repair, and targeted repainting – which eliminate the requirement for replacement parts while delivering equally comparable quality.
SMART repairs can be quicker, more sustainable, and often significantly more cost-effective – meaning that repair costs remain within acceptable thresholds, and more vehicles can be retained, rather than written off unnecessarily.
By deploying the right repair strategy early on, insurers can reduce costs, avoid delays, and help get customers back on the road sooner.
Read more about SMART repair practices here
#4 – Improving access to real-time accurate market data
Insurers are increasingly seeking to access real-time connected insights to fuel more predictive repair strategies, which can more accurately project total claims costs before repairs are formally estimated.
By connecting their own claims systems, and data platforms, directly with suppliers’ own systems, they’re maximising their ability to assess the validity of repair based on the genuine state of the market – not just historic data.
For many insurers, this requires a new approach – not just relying on traditional data provision from their suppliers, but exploring new connected platforms which can serve vital cost and turnaround insights in real-time.
#5 – Helping repairers to upskill the next generation of technicians
With the ongoing shortage of skilled repair technicians – particularly those trained to work on EVs and ADAS-equipped vehicles – many insurers are taking a more active role in supporting the future of the repair industry.
From funding apprenticeship schemes, to investing in repairer training, and expanding the capabilities of their approved networks, these efforts are helping to ensure that more vehicles can be repaired safely, efficiently, and in line with the latest standards.
“Attracting new talent to insurance & repair isn’t just about launching apprenticeship schemes.
It’s about the industry coming together to showcase how rewarding a career in claims can be, and making a real investment in people’s growth.”–
– Adrian Furness, Activate Group
