Car insurance write off value more than settlement figure!

naedanger

ac88 wrote: »

Thank you Naedanger.


It was a hit and run and so I have been left with the mess to clean up. (claim comes under my name)


The car was second hand, bought from an Audi dealership. I did get a brilliant deal on the car and having looked at Autotrader I cannot find anything that comes close to the sort of value I received.


This is why I would prefer they repair the car, as if paying out for the car, I am worried I wont be able to replicate such a deal again.

Sorry, read the replies more than your initial post.

As it is your own insurer what you are entitled to is slightly different, namely what your policy says they will cover.

That said I would expect the policy to cover the value of the car (although possibly limited to the initial price you paid). You need to check the policy wording.

Suggest you try and speak to someone at the insurer and take it from there. Explain to them your concerns.

Ultimately if you are unhappy they are paying what they say in the policy they will cover then you can complain.

It is still likely to come down to what you can negotiate.

PS Do you know what will happen to your insurance if they do write-off the car? I think it is possible you will need to pay again for insurance on the new car.

ac88

Thank you.


The car itself was in great condition, only having come out of the showroom 8 days earlier.


It was second hand (63 plate). I will speak to the insurer and take it from there.

naedanger

ac88 wrote: »

I will speak to the insurer and take it from there.

I suggest you read your policy wording first. In particular check to see if there is anything to say the most they will ever pay is the original purchase price.

If there isn't you have scope to argue the price paid is less than the value of the car now, since you were able to obtain a deal that is not currently available.

ac88

Great I will read a e-copy of my policy now. I am still in talks and hoping they will agree to repair.


But if worse case scenario ends up in payout, hopefully something can be negotiated.

ac88

Right having read the policy regarding loss and damage these two points stick out :

If we are told that your car belongs to someone else or if you are buying your car under a hire purchase or leasing agreement, we will normally make the payment for the total loss of your car to
the legal owner.

Where your car is not recovered following a theft or is beyond economical repair we will pay you the market value of your car, including accessories and spare parts at the time they are lost, stolen or damaged.

So having read this, they will pay the finance company directly. However in the second like they will pay the market value of the car, including extras.

So this is where I am confused, they will pay the finance company directly, but the settlement figure is less than the market value?

DoaM

How much damage is there, that the claim is going to cost £12k+ ?

wealdroam

ac88 wrote: »

Right having read the policy regarding loss and damage these two points stick out :

If we are told that your car belongs to someone else or if you are buying your car under a hire purchase or leasing agreement, we will normally make the payment for the total loss of your car to
the legal owner.

Where your car is not recovered following a theft or is beyond economical repair we will pay you the market value of your car, including accessories and spare parts at the time they are lost, stolen or damaged.

So having read this, they will pay the finance company directly. However in the second like they will pay the market value of the car, including extras.

So this is where I am confused, they will pay the finance company directly, but the settlement figure is less than the market value?

Why are you confused?

Did you not notice the word 'normally' in there?

You need to convince them that this is not a normal situation, and any claim payment money over that due to the finance company should be paid to you.

naedanger

ac88 wrote: »

Right having read the policy regarding loss and damage these two points stick out :

If we are told that your car belongs to someone else or if you are buying your car under a hire purchase or leasing agreement, we will normally make the payment for the total loss of your car to
the legal owner.

Where your car is not recovered following a theft or is beyond economical repair we will pay you the market value of your car, including accessories and spare parts at the time they are lost, stolen or damaged.

So having read this, they will pay the finance company directly. However in the second like they will pay the market value of the car, including extras.

So this is where I am confused, they will pay the finance company directly, but the settlement figure is less than the market value?

In my view, in the absence of any other wording to the contrary, I would take the second point you quoted to be defining the value to paid in the event of a total loss i.e. it is saying in the event of a total loss it is the market value that will be paid (and not the settlement or any other value).

The first point says this value will be paid to the finance company. So the insurer should pay the market value to the finance company.

I would then expect the finance company to pay any excess of the market value over the settlement value to you. (And if they didn't I would complain to the finance company).

It seems hard to imagine it would be otherwise. Supposing you had paid the finance company a much, much larger initial payment. You would not expect that to in effect reduce the amount payable in the event of a (total) loss. (It you had paid a £10k initial payment you would be very aggrieved if after 8 days that value was lost to you, despite your insurance, because someone else wrote off your car.)

dacouch

naedanger wrote: »

I suggest you read your policy wording first. In particular check to see if there is anything to say the most they will ever pay is the original purchase price.

If there isn't you have scope to argue the price paid is less than the value of the car now, since you were able to obtain a deal that is not currently available.

Most Insurers will try and say the maximum they will pay is the amount you paid for the vehicle and / or the amount you declared as the value.

The Ombudsman takes a common sense approach and deems that a customer may have made a mistake with the value they declared or the value has increased since purchase or that the customer negotiated a good deal. In such circumstances, the Ombudsman requires the Insurer to pay the higher value.

Aretnap

Here's the Ombudsman's guidance to how the vehicle should be valued - linking to a slightly old version because the current version has been "simplified" for the benefit of the great unwashed

http://web.archive.org/web/20140628144925/http://financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

This from section 2 may be helpful

We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth.