Motor Claims and Total Loss Glossary
Plain English definitions of the terms used in UK motor claims and total loss settlements.
A
ABI Code of Practice for Vehicle Salvage
A voluntary code published by the Association of British Insurers that sets standards for how written-off vehicles are categorised, recorded, and disposed of. It defines the salvage categories (A, B, S, N) and aims to prevent unsafe vehicles from returning to the road.
B
BCA (British Car Auctions)
The UK's largest vehicle auction and remarketing company. BCA handles the sale of salvage vehicles on behalf of insurers and is commonly used as a benchmark for trade values in total loss settlements.
BHR (Basic Hire Rate)
The standard daily rate for a replacement vehicle in credit hire claims, as determined by periodic industry surveys. BHR is often used by third party insurers to challenge hire charges in total loss and non-fault claims.
C
Cat A Write-Off
The most severe salvage category. The entire vehicle, including all parts, must be crushed. Nothing can be salvaged or reused. Typically applies to vehicles damaged beyond any safe recovery, such as fire damage or severe structural failure.
Cat B Write-Off
The vehicle body shell must be crushed, but individual parts may be salvaged and resold. The vehicle can never be returned to the road. Applies when the structure is compromised but mechanical or trim parts remain usable.
Cat N Write-Off
A non-structural write-off. The vehicle has not sustained structural damage but the cost of repair exceeds its value. Cat N vehicles can be repaired and returned to the road but must be re-registered with DVLA and the write-off is permanently recorded.
Cat S Write-Off
A structural write-off. The vehicle has sustained damage to its structural frame or chassis. Cat S vehicles can be repaired and returned to the road, but must pass a professional inspection and be re-registered. The write-off marker is permanent.
Consumer Duty (FCA)
A regulatory standard introduced by the Financial Conduct Authority in 2023 requiring firms to deliver good outcomes for retail customers. In total loss claims, Consumer Duty means providing clear, fair settlement information and evidencing that the customer understood their options.
Credit Hire
The provision of a replacement vehicle to a non-fault claimant, funded by recovering the cost from the at-fault party's insurer. Credit hire operators manage the vehicle, the claim, and the recovery process. Total loss events within credit hire files require careful settlement handling to protect hire periods.
D
DVLA Notification
The legal requirement to notify the Driver and Vehicle Licensing Agency when a vehicle is written off. The insurer or salvage agent must inform DVLA, and the write-off is recorded against the vehicle's V5C registration document permanently.
E
Engineer Report
A detailed inspection report produced by an independent motor engineer following a vehicle accident. It assesses the damage, estimates repair costs, and determines whether the vehicle is a total loss. The report typically includes pre-accident value (PAV), salvage value, and a recommendation on write-off category.
F
FNOL (First Notice of Loss)
The first report of a claim made by a policyholder or claimant to an insurer or claims handler. FNOL triggers the claims process and captures initial details about the incident, vehicle, and parties involved.
I
IVI (Intelligent Vehicle Inspection)
A technology-driven vehicle inspection method that uses AI, imagery, and data analytics to assess vehicle damage remotely. IVI can reduce the need for physical engineer inspections and speed up the total loss determination process.
M
Market Value
The price a vehicle would reasonably fetch on the open market immediately before the accident. Market value is used to calculate the settlement figure in a total loss claim and is typically supported by trade guides such as CAP, Glass's, and Auto Trader data.
MIAFTR
The Motor Insurers Anti-Fraud and Theft Register. A database used by insurers to record written-off and stolen vehicles. When a vehicle is declared a total loss, it is registered on MIAFTR to prevent fraud and ensure the write-off status is visible to future buyers.
Mitigation
The legal duty on a claimant to take reasonable steps to minimise their losses. In credit hire, mitigation means the claimant should not continue hiring a replacement vehicle unnecessarily. In total loss, it means settling promptly and not delaying the process.
P
Pre-Accident Value (PAV)
The estimated market value of a vehicle immediately before the accident occurred. PAV is the basis for the total loss settlement figure and is typically calculated using trade guides, mileage, condition, and service history.
S
Salvage Category
The classification assigned to a written-off vehicle under the ABI Code of Practice. The four categories are A (scrap only), B (break for parts), S (structural damage, repairable), and N (non-structural damage, repairable). The category determines what can be done with the vehicle after settlement.
Settlement Figure
The final amount offered to the claimant in a total loss claim. It is calculated as the pre-accident value minus any applicable deductions such as salvage retention, policy excess, or outstanding finance. The settlement figure is what the customer is asked to accept or challenge.
T
Total Loss
A vehicle is declared a total loss when the cost of repairing it exceeds its pre-accident value, or when the vehicle cannot be safely repaired. The insurer or claims handler settles the claim by paying the claimant the vehicle's market value minus deductions, rather than authorising repairs.
TPI (Third Party Insurer)
The insurer of the at-fault party in a motor claim. In credit hire and non-fault claims, the TPI is the party from whom costs are recovered. TPIs often challenge hire duration, rates, and settlement timing as part of their defence strategy.
V
V5C Logbook
The vehicle registration certificate issued by DVLA. The V5C records the registered keeper, vehicle details, and any write-off markers. In a total loss settlement, the V5C must be surrendered or updated to reflect the change of ownership or salvage status.
W
Write-Off
A vehicle that has been declared uneconomical to repair or unsafe to return to the road following an accident. Write-offs are categorised under the ABI Code of Practice (Cat A, B, S, or N) and settled as total loss claims.
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