car economical write off

hazeyc_2

Advice needed as not been in this position before. Car we purchased 3 weeks ago has been written off after another driver went into the back of us. He has taken full responsibility and the claim has gone through. The insurance company has offered a settlement that is £270 short of outstanding finance. Can we ask the pay out to come directly to us or does it have to go the the finance company. Obviously we want to get another car and are unsure what we have to do. Apply for a new loan ??. The finance company have said we can continue the loan but insurance company say cheque has to go to the company
Any advice much appreciated

robchap_2

turn down the offer you want the FULL cost you have lost back you are entitled to this just push them then pay the loan off and start looking again

dacouch

robchap wrote: »

turn down the offer you want the FULL cost you have lost back you are entitled to this just push them then pay the loan off and start looking again

You are only entitled to the market value of the car, you are not entitled to the market value plus whatever is outstanding on the finance.

OP you may find section 9 of this link from the Ombudsman helpful when negotiating with the Insurers.

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#9

vaio

Presumably the additional finance cost could be recovered as a consequential loss needed to return the OP to the position they were in before the accident

BLT_2

vaio wrote: »

Presumably the additional finance cost could be recovered as a consequential loss needed to return the OP to the position they were in before the accident

The insurance company are obligated to pay the financial value of the car, if an individual has taken out a HP to pay for the car the company are not responsible for the additional interest therein.

EG: Car costs 10k, interest payments 4k, value of the car remains at 10k, the loss is a consequence of the buyer taking out HP which is a personal choice.

One sneaky little system some companies use is to deduct the remainder of your years premiums from the payout, thats worth watching out for, I had 400 pounds deducted from my write off payment once under that clause, the first I found out about it was when the cheque arrived :mad:

nomoneytoday

BLT wrote: »

One sneaky little system some companies use is to deduct the remainder of your years premiums from the payout, thats worth watching out for, I had 400 pounds deducted from my write off payment once under that clause, the first I found out about it was when the cheque arrived :mad:

It's not cheeky. You bought one year's insurance, but have only paid x months premium. The insurer is paying off the balance of the annual premium from your payout. If you paid a single annual premium you wouldn't get a refund either.

Your insurance was to cover a possible scenario, it happened, they paid, end of cover.

vaio

BLT wrote: »

The insurance company are obligated to pay the financial value of the car, if an individual has taken out a HP to pay for the car the company are not responsible for the additional interest therein.

EG: Car costs 10k, interest payments 4k, value of the car remains at 10k, the loss is a consequence of the buyer taking out HP which is a personal choice.

One sneaky little system some companies use is to deduct the remainder of your years premiums from the payout, thats worth watching out for, I had 400 pounds deducted from my write off payment once under that clause, the first I found out about it was when the cheque arrived :mad:

I’m not talking about interest, the key word is “consequential”, that’s costs that would not have been incurred had the accident not happened.

Examples being early repayment charges on a finance deal, bus & taxi fares, increased future premiums in no fault claims etc etc.

On your point about premiums being deducted from your payout, insurance is generally a yearly contract, if you pay monthly then if you make a claim after 6 months then you still have to pay for the full year.

Some policies end on a total loss pay-out, some don’t and so can be transferred to the replacement car but in either case you still have to pay the whole premium.

dacouch

You cannot recover the increased premium costs from a non fault claim from the other insurers

vaio

dacouch wrote: »

You cannot recover the increased premium costs from a non fault claim from the other insurers

You can, I have done it.

8 or 9 years ago a 4x4 driver reversed into me whilst I was parked and cracked the back light on my car. I stuck a bit of gaffer tape over it and wasn’t going to bother claiming but she reported it to her insurance.

When I renewed my company (Elephant) loaded by £100ish due to the incident although they were still the cheapest option (don’t you just love online quote systems!!).

The 4x4 driver’s insurance (Direct Line) argued they shouldn’t pay because they wouldn’t load for a non fault incident and suggested I move to them but then quoted a figure that as way more than elephant even with the loading. The head elephant (Tanya?) kindly sent me a letter confirming the loading, process was repeated the following year and eventually I got £250 ish from direct line to cover 2 (maybe 3) years loadings.

It might be that because of the small sum involved they didn’t bother fighting but it seems to me that the loadings only occurred because of the accident and therefore should be recoverable from the third party along with all other consequential losses.

Similarly I’d argue that if someone loses 6 months premium because of a total loss payout which was someone else’s fault they should be able to recover cost that from the TP.

All to do with restoring you to the position you were in before the accident

december

Slightly off topic here, but I've just had a total loss claim and the insurance company deducted money for my outstanding premium but didn't cancel the policy, just kept it running until I did a change of vehicle. This may well depend on if it was a fault or no fault claim, in my case it was a no fault claim.

BLT_2

nomoneytoday wrote: »

It's not cheeky. You bought one year's insurance, but have only paid x months premium. The insurer is paying off the balance of the annual premium from your payout. If you paid a single annual premium you wouldn't get a refund either.

Your insurance was to cover a possible scenario, it happened, they paid, end of cover.

Whilst I understand the process behind it, it still seems strange. I have a 2000 pound car, it is written off, so the company agrees to pay me 2000 pounds, I then have 400 pounds deducted for premiums, ergo I can now only afford a 1600 pound car.