Car Insurance Advice Needed

Ibroxblue

Hi All - I hope someone can help.

I recently bought a car ( a month ago) and insured it through a well known insurance company and major retailer and paid my full premium for the year.

However during the recent spell of bad weather and in a freak accident my car swallowed too much water and in the process wrote off the Engine, Turbo, Intercooler, and Inlet Manifold.

It was taken to the dealership to await an Engineer from my insurance company (who have accepted the claim) to go out for which this was done today, and he phoned me this afternoon to tell me the outcome.

He has advised that they are willing to replace the parts above, but because my car has 40000 miles on it and the parts being replaced are new, I would be expected to shell out £1000 (not including my excess £300) because they cannot replace like for like - he even suggested that the £1000 could have been worse but they have reduced this as a goodwill gesture. Obviously a bit shocked, I was also advised that the only other option to me would be to receive a cash in lieu settlement (based on the cost to put right at the dealership minus £1300) and get it repaired myself???

I have never claimed before and was always under the impression that if the insurance company could not provide a direct replacement, then they would find the nearest available equivalent at their cost. I have also read the policy document which makes no reference to "betterment" for want of a better word.

I have since called my insurers call centre to register a complaint, and was advised that this was chargeable as the insurance company will only ensure that you are financially the same before and after the accident. However I know that putting a new engine in my car will not alter the value by £1000, in fact asking around I have been advised that it may not even change the value of my car at all ( therefore I will be financially worse off as a result).

I now await a official response from my insurers - I am absolutely gutted, especially as my dealership told me today that they have 25+ cars in with exactly the same problem, and every other insurance claim has gone through without delay.

Has this happened to anyone else and what options do I have - I have been a loyal customer with this company for many years, and cannot believe that when you need to claim that this happens.

:mad:

MarkyMarkD

Dial Direct's website defines betterment: http://www.dialdirect.co.uk/betterment.html

I believe that betterment is a generally applicable motor insurance concept.

The issue is that the insurers should be demonstrating the additional value - the betterment.

As you correctly point out, replacing an engine in a car with 40,000 miles on the clock makes no tangible difference to the value. Nor does replacing any other part which is not normally expected to wear out over the normal working life of the vehicle.

I think you should challenge the insurer and ask them to justify their claim that the vehicle will be "bettered" by the repairs they are undertaking.

Ibroxblue

Thanks MarkyMarkD,

I have spoken with them today and outlined my position that I will not be financially better off as a result of having an engine fitted and paying £1000 towards the cost - to which the reponse has been that they will be putting me back on the road in a better state than before the accident.

I still believe that the whole point of a car insurance policy is to idemnify me from loss, and if I pay £1000 and my car does not increase in value then clearly I am out of pocket.

I have asked the lady to quantify how I will be financially better, and her response was that an engine with 40,000 miles would be more likely to break down than a new one - despite the fact that when calculating the amount I should pay the factor involved the life of a diesel engine at 200,000 miles.

I have been told I will receive a final take it or leave it letter, and will have to pursue any action through the financial ombudsman.

:mad: :mad:

MarkyMarkD

Then do so. They are trying it on.

In your argument, it will help if you can demonstrate that you wouldn't get to 200,000 miles during your likely use of the car, so the "benefit" of the new engine is illusory.

Refer to their 200,000 mile life.

Ibroxblue

Thanks again - I will be going the the FOS when I receive the letter but in the meantime will have to pay £1000 + £300 excess to the garage, as I cannot do without a car. I have already spoken to the financial ombudsman who has said that paying the amount will not prejudice my case, or imply by paying that I have accepted the decision of the insurance company.

Nobody would realistically get 200,000 miles out of a car (there must be very few out there).

Just to let you know I spoke to 2 BMW dealerships and had a small piece of advise from a valuation company who all basically agree that it is impossible to put a value on the work carried out due to numerous factors, and if they could they believe that the value added to my car would be minimal at best.

They have now offered me three options

1/ Pay £1000 plus excess and have new BMW parts fitted by a BMW franchised dealer.

2/ Receive cash in lieu benefit minus £1300 (based on the total cost of doing the job as point 1) and find the means to do this myself!!

3/ They will take the car to another dealer (not BMW) and have the engine stripped down and put back together??

I mean how viable are options 2&3 anyway - even if BMW parts are fitted I would not be able to afford to go to a BMW dealer as insurance companies get discount which means my money from them would not go as far - even then I am not a motor expert and locating a service and parts would mean I would be without a car even longer. This would also mean that not having a BMW stamp for the work would mean the value of my car dropping even more - once again I would lose out!

And going to another dealer and having the engine stripped out ????? BMW with a vested interest or not would not have recommended an engine replacement if it wasn't needed (the engineer from the insurance company must have agreed with this view as otherwise it wouldn't have been his first option)!