Direct Line - pathetic car insurance claim payout!!

dt7blue

Can anyone offer any tips on a recent poor claims payout by Direct Line?

My son purhased a used Renault from a dealer (with invoice etc) for £4200. Less than 3 weeks later, someone drives in the back of his car and the car is written off. My son's insurer, Direct Line will only offer £3200 for the car. A loss of £1000!
We have sent a written complaint to Direct Line and also registered a complaint with the FOS.

What else can we do?

mattymoo

Not a lot really.
Motor insurance will only ever pay out market value of a car based on private sale price. Your son bought at dealer prices but the payout is at private sale prices.

May be some scope for negotiation using ads for similar vehicles in Autotrader / ebay but be aware that just because a cars is advertised for x price, it does not mean it sold for that price. The insurers do check.

dt7blue

actually the car was bought from a trader and the price was private sale price. We have provided many autotrader like examples but still Direct Line won't cough up. Direct Line obviously make their margin by screwing customers by charging a a premium for the purchase price of the vehicle then settling for a lot less.

I could understand if I had gone to a cheaper insurer but with Direct Line I expected fairer. Still next time I will go elsewhere!!

mattymoo

Hmm, does seem a big hit for 3 weeks then.
This sometimes happens when new models come out but not aware of any new Renault models at present (although new Laguna is imminent). The new model will cause prices on the old model to take a tumble.

Might be worth going back to the trader (if you are on good terms) and ask if you can take a look at his Glasses Guide. This is the motor trade bible and is used by insurers as well. The trader will be able to explain how to make the mileage adjustments etc. See what figure you come up with and challenge DL with that.
PS: make sure you use the correct edition, i.e the one valid at time of the accident. Some traders use paper copies, some have an online service.

iwmorg

First of all - direct line have awful claims handlers - something I have first hand experience of.

Second of all - Glassess guide / trade price etc. mean nothing when it comes to total loss payouts. Your policy is one of indemnity - meaning that it is intended to put you back in the position you were before the loss. If it is a total loss - they should pay what it would cost you to buy a similar car from a dealer - at today's prices.

gazza975526570

iwmorg wrote: »

First of all - direct line have awful claims handlers - something I have first hand experience of.
quote]

a bit of a genralisation dont you think? DL has some poor handlers but also some good - the same as any call centre

In respect of values why would an insurer pay for a dealers profits?

If you can buy a car privately (and therefore the cars value) at x amount - why would it then pay x amount plus dealer's mark up?

raskazz

iwmorg wrote: »

First of all - direct line have awful claims handlers - something I have first hand experience of.

Second of all - Glassess guide / trade price etc. mean nothing when it comes to total loss payouts. Your policy is one of indemnity - meaning that it is intended to put you back in the position you were before the loss. If it is a total loss - they should pay what it would cost you to buy a similar car from a dealer - at today's prices.

I disagree. Indemnity can be provided by giving the policyholder a settlement with which he or she can purchase an equivalent vehicle in the same condition (less the excess obivously). Where the policyholder chooses to buy the vehicle is irrelevant.

gazza975526570

absolutely i agree totally - but that amount would be the current local market value of the product - not inclusive of dealer mark up. Where he buys the vehicle from is totally relevant.

If he purchased at the most exclusive dealership in britain but exactly the same car can be found down the road at x amount cheaper then why would any Business pay more than the lowest reasonable cost as he would have been indemnified irrespective of where he had originally purchshed it from

raskazz

gazza975526570 wrote: »

absolutely i agree totally - but that amount would be the current local market value of the product - not inclusive of dealer mark up. Where he buys the vehicle from is totally relevant.

If he purchased at the most exclusive dealership in britain but exactly the same car can be found down the road at x amount cheaper then why would any Business pay more than the lowest reasonable cost as he would have been indemnified irrespective of where he had originally purchshed it from

Um, I think you misunderstood my post - I was saying that where the policyholder chooses to buy the replacement vehicle from (dealer or private) is irrelevant to how the insurer calculates the settlement.

mattymoo

Out of interest, Raskazz / Gazza.
I've often wondered why insurers do not firm up this definition. I looked at the DL definition and they state it is the "Market Value" of the vehicle. A common enough term in policies but not one that is used in the motor trade or in the price guides.

They define A1 Retail (showroom), Good, Fair and Trade (trade in) normally.

Surely it would be easy for insurers to give a tighter definition of market value to avoid this confusion. I've no idea why they don't. I moved away from motor claims in the early 90's (my current employer doesn't even handle motor business) so I've no one to ask.

raskazz

Interesting point. I'm not a claims expert but I do know of several insurers that tighten up the wording by slightly as "we will pay the market value as specified in Glass's Guide".

Some also state that if the policyholder originally bought the vehicle at a price below that usually found in the trade guides, then the settlement will be reduced accordingly.

I think it is a given that there will always be the need to leave room for negotiation in total loss claims.