Write-Off Categories Explained: What Accident Management Companies Need to Know in 2026
Disclaimer: This note is general guidance, not legal advice.
Key Takeaway: The ABI's 2025 update introduced new requirements for EV battery handling in Cat A and B write-offs. As the UK's EV fleet grows, categorisation decisions will become more complex, and the settlement conversation needs to keep pace.
Every total loss claim starts with a categorisation decision. The insurer (or their appointed engineer) assesses the damage and assigns the vehicle to one of four write-off categories. That categorisation determines what happens next, for the insurer, for the customer, and for anyone managing the claim on their behalf.
The ABI updated its Code of Practice for the Categorisation of Motorised Vehicle Salvage in May 2025, including new guidance on electric and hybrid vehicles. If your operation handles total loss claims, it is worth understanding what each category means and how it affects the settlement conversation with the customer.
The four categories
| Category | Description |
|---|---|
| Category A, Scrap | The vehicle must be crushed in its entirety. No parts can be salvaged or resold. This is reserved for the most severely damaged vehicles where even the components are considered unsafe. Category A vehicles cannot be re-registered under any circumstances. |
| Category B, Break | The vehicle's body shell must be crushed, but usable parts can be removed and resold before destruction. The vehicle itself cannot return to the road. The registration is permanently cancelled. However, components like engines, gearboxes, and non-structural parts can re-enter the market. |
| Category S, Structural | The vehicle has sustained structural damage but is considered repairable. This includes damage to the chassis, frame, or structural panels. A Category S vehicle can be repaired and returned to the road, but it must pass a new MOT and the write-off marker stays on its history permanently. This affects resale value significantly. |
| Category N, Non-structural | The vehicle has non-structural damage only. This might include cosmetic damage, electrical faults, or mechanical issues where the underlying structure is intact. Category N vehicles can also be repaired and returned to the road. The write-off marker remains on the vehicle's history. |
The 2025 updates: electric vehicles
The most significant change in the ABI's 2025 update relates to electric and hybrid vehicles with high-voltage battery systems (over 60 volts).
The updated code requires that when a Category A electric vehicle is scrapped, the high-voltage battery must be removed and recycled separately if it can be done safely. For Category B vehicles, the same applies. Salvageable batteries should be handled by qualified specialists, not general salvage agents.
This matters because the battery is often the single most expensive component in an electric vehicle. A minor collision that damages the battery pack can result in a total loss even if the rest of the vehicle is largely undamaged. As the UK's EV fleet grows, the proportion of total loss claims involving battery damage will increase, and the categorisation decisions will become more complex.
Why categories matter for the settlement conversation
The write-off category directly affects the customer's options and the questions your handlers need to address.
- Salvage retention. Customers can only retain their vehicle if it is Category S or N. For Cat A and B, there is no retention option. But for S and N vehicles, the customer needs to understand what retention means: a reduced payout (the salvage value is deducted), responsibility for repairs, an MOT requirement (for Cat S), and a permanent write-off marker that reduces the vehicle's future value.
- Finance implications. If the vehicle has outstanding finance, the settlement usually needs to clear the finance balance first. This can mean the customer receives very little, or even nothing, from the payout. This is one of the most difficult conversations in total loss, and it needs to be handled carefully and consistently.
- Valuation challenges. Customers who feel their payout is too low can challenge the valuation. The FCA expects a clear, documented process for handling these challenges. The category does not change the valuation itself, but it does affect the customer's perception of whether the settlement feels fair, especially for Category N vehicles where the damage may appear minor.
Getting the settlement right
The categorisation decision is made by the insurer or their engineer. That is outside your control. But how the settlement is communicated to the customer, what options are presented, and how their decisions are recorded, all of that sits squarely within your operation.
A structured, consistent process that clearly explains the customer's category, their options, and their rights is not just good service. In a Consumer Duty environment, it is a regulatory expectation.
Whether you handle that process by phone or digitally, the information needs to be clear, complete, and documented. The growing complexity of total loss claims, particularly with EVs entering the mix, only makes that harder to achieve through unscripted phone calls.
TotalSettle gives every customer a clear, compliant digital settlement journey tailored to their write-off category. See it in action.
Craig Budsworth
Industry Advisor, TotalSettle
Veteran of the UK accident management and credit hire sector with decades of experience advising AMCs on compliance, claims operations, and regulatory change.