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Is there a process to challenge value on car after accident?

edited 21 July 2018 at 10:17PM in Insurance & Life Assurance
16 replies 2K views
Sausage11Sausage11 Forumite
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edited 21 July 2018 at 10:17PM in Insurance & Life Assurance
Hi,

We had an accident and it has been deemed our fault. The car has structural damage and has been written off.

Our insurer has told us the value they are willing to pay. They say because our car was written off before (Cat D) the valuation is significantly affected. The valuation offered is quite a bit (perhaps 15%) lower than I had hoped.

In the previous accident, someone hit our car. We were not at fault. We used the money we received to have the car comprehensively repaired at a Mercedes Benz approved body shop. As a result the car was in superb condition after the repair. We had intended to keep the car long term.

I asked the insurer if I can challenge the valuation amount. They said that there was no possibility of them offering a higher amount. I asked if there was some form of appeal mechanism or industry arbiter that I could apply to but they said no.

Does this sound correct? Do I just have to accept the value? I appreciate that if I had tried to sell the car as a Cat D I would have taken a hit but I had no intention of selling as I knew how good the car was before the accident and after using the MB approved repairer.

Any advice much appreciated.
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Replies

  • paddyandstumpypaddyandstumpy Forumite
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    Exhaust the complaints process as outlined in your policy document. This will also include how to escalate to the FOS if you are unhappy with the insurers final decision.
    If nothing else complain about the fact they didn't highlight their complaints procedure to you when you asked, this is a barrier to complain in my eyes and very frowned upon by the FOS.

    That aside, if the car was a cat D write off; it is worth less than a non written off car.

    You should find some other examples of your car (ideally written off ones) and present these as evidence why you feel your payout offer isn't sufficient.

    Or, find examples (same age, mileage and spec) and present these to insurer, and ask what their standard deduction is for a written off vehicle.

    Ultimately, their liability is to put you back into pre loss position. You can't ask for the value of a non written off car on the basis you wouldn't have sold your written off car because it had a good repair.
  • dacouchdacouch Forumite
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    As Paddy has said a previously written off car is worth less than a car that has not been written off irrespective of who carried out the repairs.

    A buyer would simply ignore your car and buy one that does not have a previous history so they are priced less.

    15% is on the low side of the deduction.

    This is the Ombudsman's view (It also gives you the information you need to challenge the value should you want to) see section 14

    https://web.archive.org/web/20150320001942/http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

    If the difference is solely down to the 15%, the Ombudsman will side with the Insurer, if the "Starting" price is wrong (Using the Ombudsmans methods of valuing the car) then you may have a chance with the Ombudsman
  • edited 22 July 2018 at 10:37AM
    Sausage11Sausage11 Forumite
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    edited 22 July 2018 at 10:37AM
    Thanks both,

    I've been doing a bit more research. I read through the information on the site provided by dacouch which was very helpful.

    I also paid for a Parkers subscription and this is the valuation it provides:

    Franchised Dealer: £11,130 £16,461
    Independent Dealer: £9,695 £15,026
    Private Good: £9,285 £14,616
    Private Poor: £7,945 £10,405
    Part Exchange: £8,465 £13,796
    Original Price: £36,615 £41,120

    The second column is the adjusted valuation based on my car's spec and mileage (30K rather than the 80K assumed). This will not factor in the Cat D status.

    I've been offered 10,080 by the insurer. There is a Cat D available on line (same year, similar mileage) for 9,990. The cheapest non Cat D that is remotely similar is 13,500.

    I'm now unsure what to do. Based on the Cat D ad, an offer of 10,080 seems very reasonable. But based on the Parkers valuation, it represents a 30%+ discount from a "Private Good" valuation. But then there are numerous cars available online for less than that.

    I'd welcome your thoughts as to whether I should pursue this or not. As Paddy pointed out, I was informed there was no way to dispute the valuation and no industry arbitration available, which I find annoying. But there's no point in making a fuss about that unless I'm in with a reasonable chance of getting a decently higher value awarded.

    Edit. It's worth adding my car is quite high spec - higher than the 9,990 Cat D online. Obviously I have no idea about the accident / quality of repair on the online car. But mine was a fully MB approved repair.

    Edit 2. The 13,500 online ad seems to be an outlier. There are a couple around 14K and then you're quickly up to 15K or more for the majority of ads. Most of the cars on offer will not have the spec / low mileage that mine has.
  • FutureGirlFutureGirl Forumite
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    The way you dispute the amount is via a complaint.
  • dacouchdacouch Forumite
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    Luckily for you, the Ombudsman ignores adverts.

    Reread the link I provided, in particular the requirement for the Insurer to seek three valuations and to then use the FOS (Ombudsman) formula for averaging or ignoring valuations that are out of the range of the others.

    Your Insurer will have almost certainly sought one valuation.

    I would do this via a phone call initially and then make a complaint later if they still do not play ball.

    P.S The FOS in their wisdom have made that technical page "More consumer friendly" and taken down most of the notes. What I have posted is a cached version of the following link, but the FOS still follow the same system for valuing.

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

    Who is your Insurer?
  • Sausage11Sausage11 Forumite
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    Insurer is Admiral.

    I've read the additional link information and re-read the previous link.

    Trying to absorb this, it seems that they could reasonably deduct up to 20% from the valuation for the Cat D status.

    Do you think the best valuation to use for myself is the "Private Good" valuation of 14,616?

    If so, a 20% deduction takes it down to around 11,700.

    Given that I used MB approved repairers and their engineers have acknowledged the car was in 'good' condition, does this mean that I should expect less than 20% deduction?

    Really appreciate the advice!
  • dacouchdacouch Forumite
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    The Ombudsman states you get the dealer price.

    If Admiral have stated they have deducted 15% for the vehicle being previously written off, they cannot really change their mind and increase it to 20%.

    Try and use a decent Insurer next time, Admiral are the Ryan Air of Car Insurance
  • edited 22 July 2018 at 9:44PM
    Sausage11Sausage11 Forumite
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    edited 22 July 2018 at 9:44PM
    Thanks.

    They haven't said that they would take 15% off. They haven't specified the amount of the deduction. I assumed the value was about 12K and it was therefore a 15%ish deduction.

    But if it's the dealer price I should get, it's looking more like a 33% reduction (independent dealer).

    Edit. Is it the independent dealer or the franchised dealer that you use?

    Point taken about Admiral. I'll avoid them in the future.
  • Sausage11Sausage11 Forumite
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    Update.

    I just spoke with Admiral on the phone. I asked for their initial valuation and the discount they had applied for the Cat D.

    They said that they didn't work it out in that way. They looked at Glass' figures and Glass gave a Top Book value from a main dealership as well as a Bottom Book value. This Bottom Book value is used as the car was written off before.

    I asked to see the figures from Glass' but was told they pay for them and can't send out this information.

    This seems completely at odds with the way things are explained in the FOS' pages. Does this sound correct?

    The difference between the figure they've given from Glass' Bottom Book and the figure that I work out taking a 20% deduction from Parker's figures is about 2K.
  • dacouchdacouch Forumite
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    You have read how the Ombudsman REQUIRES them to calculate the value so you know that how they are calculating it is wrong.

    I was going to mention that some Insurers value a previously written off car by using the bottom line or trade value. This is wrong.

    I recommend you reread the link a few times, pay particular attention to 2, 4,5 & 6.

    They should be using the dealer price and deducting upto 20% from the value. But to arrive at the dealer price they need to obtain the value from the three different guides not just one. If the value differ then they need to use the system the FOS provides for either averaging the value or ignoring a single valuation that is massively different.

    Once you understand the system the FOS requires (It's actually quite easy and common sense) try ringing them and politely explain to them they are wrong and in effect explain to them you know your entitlement.

    If that does not work, your next step is an "Official Complaint" which they are duty bound to properly investigate (It's done by more senior staff).

    If they are stupid enough to not change their stance following the complaint (Assuming their price is wrong) then you can go through the Ombudsman. However FOS work in a similar speed to continental drift so ideally try and avoid it. The FOS can be very helpful on the phone and will often ring the Insurer and politely explain to them they need to sort things out to avoid an Ombudsman complaint.

    If you need advice feel free to ask, there are plenty of people who will help and Admiral are not that popular

    I cannot stress enough that everything you need is in the link, re read it a few times and it will make sense
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