The Development of the Current Australian Statutory Write-Off Criteria for Damaged Vehicle Repair 2012-01-0576

Within Australia there are seven States and two Territories, each with their own Government Authority which were until recently all using slightly different criteria to define the criteria between a Repairable Write-Off (RWO) and a Statutory Write-Off (SWO).

Under the national framework for the management of Written-Off Vehicle's (WOV's) developed by the National Motor Vehicle Theft Reduction Council (NMVTRC) any collision, fire, water or weather-event damaged vehicle declared by an insurer to be a total loss must be classified to be either a SWO or RWO. Under the current Australian regime a SWO may only be sold subject to a statutory restriction that it may only be used for parts or scrap metal. A RWO may be repaired and re-registered subject to the vehicle passing specific safety and identification inspections. A set of State and Territory based technical criteria determine when a WOV should be classified an SWO. A national workshop in June 2009 resolved that the pre-2010 criteria were in need of urgent updating to better reflect contemporary vehicle design and fabrication techniques and to make the system more impervious to manipulation by criminal networks. In late 2009 the NMVTRC engaged a group of vehicle engineers to work with stakeholders to develop new criteria to meet the current and future needs.

Draft criteria were circulated for comment in May 2010. Stakeholders were briefed on the draft criteria and during the comment period stakeholders made submissions. In general terms, the comments received indicated there was significant consensus about much of the proposed draft criteria and a high level of consistency in comments on those elements which required clarification or re-working.

Revised draft criteria were evaluated in the field by a group of experienced assessors to evaluate and gather empirical evidence as to the likely impact of the new criteria on the prevailing ratios of RWOs to SWOs. The trial found that:

• Application of the draft criteria could shift up to 30% of vehicles currently classified as RWO's to SWO's (i.e. parts or scrap only);
• With only slight modification the revised draft criteria could effectively remove all classes of damage considered to pose a structural repair risk from the RWO category;
• The principle of separately counting like areas of unconnected damage in determining whether a vehicle has the three areas of damage required to render it a SWO did not have any undue or disproportionate impacts on the vehicle classification process; and
• The draft criteria were generally clear, unambiguous and therefore relatively simple to apply once familiar with them.

Some refinements to the final criteria were, however, proposed to ensure their consistent application and have been included in the developed SWO criteria.

The developed SWO criteria which is being used in Australia to characterise vehicle damage is presented within this paper.