Insurance payout too low for friend

poor_student1234

Heres the story,

My friends car was hit from behind, 3rd party admitted fault and claim going through nicely.

Problem is the valuation of the car

She bought the car as a cat d for 4500 pounds, cheapest hpi clear one was over 5000 but she liked it and bought it because the previous damage was minor as seen in the pictures.

Now 3rd party have valued the car at 4400 and are taking 25% of that because it was a cat d and she is only being offered 3300.

Can they really pay such a low amount for her car.
What if it was a cat c, would they take 50% of the value.

Trebor16

Have the third party explained why they are reducing the valuation by 25% (other than it is a Cat C)?

Do a search on a site like Autotrader for similar cars and see what prices they are going for. Parkers will also give a rough guide too, though their valuations do seem a bit generous. When you have done some research then you will be potentially in a stronger position/ It might also be worth contacting the ABI to find their position on the valuation of Cat C and D vehicles.

Gene_Hunt_2

Trebor16 wrote: »

Have the third party explained why they are reducing the valuation by 25% (other than it is a Cat C)?

Do a search on a site like Autotrader for similar cars and see what prices they are going for. Parkers will also give a rough guide too, though their valuations do seem a bit generous. When you have done some research then you will be potentially in a stronger position/ It might also be worth contacting the ABI to find their position on the valuation of Cat C and D vehicles.

The insurance have valued a car bought for £4500 at £4400, thats not bad.

It's a cad d hence the reduction.

Trebor16

From the Financial Ombudsman site:-

"14. vehicles previously "written-off" and then repaired

Most buyers are (rightly or wrongly) put off by the knowledge that a vehicle was previously "written-off", no matter how well it was later repaired – and this can affect its value.
If the policyholder knew the vehicle was a repaired write-off, he/she is likely to have paid less for it. So we are likely to decide that it is not unfair for the insurer to make an appropriate deduction – not more than 20%, unless the insurer can provide good independent evidence for a higher deduction.

But if we are satisfied that the policyholder innocently bought (and insured) the vehicle in complete ignorance of its history, and the repairs were not obviously noticeable, he/she is likely to have paid full price (and a full insurance premium) for it. So we are likely to decide that it would be unfair for the insurer to pay less than the full market value."

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

Hammyman

poor_student1234 wrote: »

Heres the story,

My friends car was hit from behind, 3rd party admitted fault and claim going through nicely.

Problem is the valuation of the car

She bought the car as a cat d for 4500 pounds, cheapest hpi clear one was over 5000 but she liked it and bought it because the previous damage was minor as seen in the pictures.

Now 3rd party have valued the car at 4400 and are taking 25% of that because it was a cat d and she is only being offered 3300.

Can they really pay such a low amount for her car.

Yes they can. The problem is that your friend payed too much for the car in the first place. If HPI clear were £5000, she shouldn't have paid more than £3750-£4000.

Hintza

The OP/friend should buy it back and get it repaired again.

poor_student1234

Trebor16 wrote: »

From the Financial Ombudsman site:-

"14. vehicles previously "written-off" and then repaired

Most buyers are (rightly or wrongly) put off by the knowledge that a vehicle was previously "written-off", no matter how well it was later repaired – and this can affect its value.
If the policyholder knew the vehicle was a repaired write-off, he/she is likely to have paid less for it. So we are likely to decide that it is not unfair for the insurer to make an appropriate deduction – not more than 20%, unless the insurer can provide good independent evidence for a higher deduction.

But if we are satisfied that the policyholder innocently bought (and insured) the vehicle in complete ignorance of its history, and the repairs were not obviously noticeable, he/she is likely to have paid full price (and a full insurance premium) for it. So we are likely to decide that it would be unfair for the insurer to pay less than the full market value."

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

Thanks for the replys everyone.

So you reckon if she shows this website to the 3rd party they will give a better payout, can the ombudsman put this amount of pressure on them.

bigjl

Your friend paid a bit too much for her car, at only £500 less than a non right-off.

The loss of value does seem strange for those not used to buying and selling recorded cars, as they can be bargains with very little damage.


Though the person that sold the car to your friend probably knew that the car was worth a lot less than they were selling it for, and is probably making a good living doing so.


They are doing so purely because they know people can't resist a bargain, and to be honest a £500 saving for a car with minor scuffs and marks that just happens to be recorded on a register in cyberspace can seem a good deal.

It is just a pity that the Insurance industry is happy to make money and has caused thias increase in selling on of recorded vehicles to make bigger profits, especially Cat D, as most of these can easily be fixed, the insurance companies just don't want the hassle, in fact they can normally be fixed by using second hand parts at a fraction of the insurance estimate.

As others have said, try to buy the car back if the damage is minor, or try and barter using photos of the car as it was bought and using the advert, if available, and also the reciept.

I personally think the OP's friend will be doing well to get much more than £3500, but hey, every pound extra she gets is better than nothing.

rev_henry

Write them a letter saying you want more. Send autotrader ads in as evidence. The idea of buying the car back and repairing is a good one because the car is already cat d, so difficult to sell on, another cat d won't make too much difference to your friend AND she has the advantage of knowing what happened in the 2nd cat d, iyswim. She may be able to make a tidy 'profit', as the insurance company won't want much for the car and it should be repairable for MUCH less than the payout.

poor_student1234

Yeah but they have put the car on a cat c now.

dacouch

poor_student1234 wrote: »

Thanks for the replys everyone.

So you reckon if she shows this website to the 3rd party they will give a better payout, can the ombudsman put this amount of pressure on them.

If she is claiming directly from the third party (Rather than off her own policy) they do not have to abide by the Ombudsman. However it is worth bringing it to their attention as a decent insurer takes notice of it.

Obviously that guidance only applies if she was not aware it was a previous write off. If she was aware or should reasonably have been aware then it does not apply. They will probably request the purchase receipt (Which may show it) and ask to look at the original advert if still available