Total Loss Payout on Non-Fault Claim

Rehnn83

I have a 9 year old car, a few weeks ago someone drove into while it was parked. The other party, stopped, gave details and admitted liability (so that's not in dispute).

 

The claim is being handled by a "Non-Fault" claims handling company. I've heard today that the value of the repairs to the body work are more than 66% of the total scrap value of the car. The Third parties insurers, have valued the car at £3k abut for some reason made nearly £1000 worth of deductions (for what I don’t know) so they have offered £2k to settle the claim. When I heard this, I pointed went to the Dealer's website (whom I bought the car from). The very cheapest car (of the same make & model) they offer is £12k with the next cheapest at £14k. These cars are a few years newer than my current car, so I stated I think a settlement value of £10k is not unreasonable. The non-fault claim handling company are unwilling to negotiate on my behalf, so the claim is going back to my insurers (and I’m expecting to hear from them tomorrow).

 

In terms of “what I’m due” – where do I stand?
I understand that if the fault was mine, then my insurers only have to pay out the total loss value of the car (and £3k is in that ball park according to Parkers). However as the accident was not my fault, my understanding is that the third party insurers have a duty to return me to the position I was in before the accident took place. (I.e. in possession of a working similar spec’d car). So I’m not being unreasonable in pointing out the current cost to me of purchasing a replacement vehicle of similar spec.

 

Am I correct in my understanding?

Dr_Crypto

No.
You had a 9 year old car. Putting you back into the same position means getting you a like-for-like vehicle which would be a 9 year old one of the same make and model. 
Seems a bit odd why they are reducing the value to £2k but you should land with a settlement of about £3k which is what your vehicle is worth. 

ElizabethRose

Have you read what the deductions are? For example pre existing damage, previous total loss, excess mileage. 

You are entitled to what your car was worth so parkers would be a decent guide so do not go expecting 10k like you've mentioned. Also remember your own insurers may deduct your excess which you will need to recover as an uninsured loss. 

Aretnap

If you bought the car new or nearly new, the dealer you bought from is unlikely to have many 9 year old cars of the same spec - so the fact that they're selling cars "a few" years younger than that for £12K isn't really relevant. It's the cost of a replacement car of the same age, make, model, mileage and general condition that's relevant - not the cost of the nearest equivalent at a particular dealer that you happen to like.

Whether the accident was fault or no fault makes no difference to the settlement due - the car is worth what it is worth either way.

As above Parkers is likely to be a reasonable starting point for a valuation. Ask what the deductions are for, and query them if you don't think they are appropriate. You could also look on Auto Trader to see what cars of a similar age to yours are advertised for, but you'll have to accept that you'll be looking at the sort of dealers which sell 9 year old cars, not main dealers, and also understand that adverts are generally considered to be less convincing evidence of value than trade guides. (A car may or may not sell for what it is advertised for - trade guides are based on actual selling prices).

Alternatively if you like the car and the damage is not too severe you could look into taking the write-off cash, buying it back for scrap value and getting it repaired yourself. The insurers will be pricing a thorough repair job - new parts, a respray to ensure a perfect colour match etc. If you're willing to use second hand parts, put up with an imperfect colour match and/or a few dents then you might be able to get it repaired adequately and have money left over.

Rehnn83

Thanks for the Comments.

Sadly it seems my thinking that the other party’s insurers duty is to put me back into the position I was before is incorrect.

I’m going to push my insurer to re-evaluate having the car repaired (as that’s my ideal solution). (Mine has 1 previous owner and I have a full service history).

I’ve managed to find comparable cars for sale for around the £8k mark. So I’m going to push for that (fully in the knowledge that I’m unlikely to get that) but with the ultimate end goal of getting mine repaired.

Sandtree

Rehnn83 said:

Sadly it seems my thinking that the other party’s insurers duty is to put me back into the position I was before is incorrect.

They are required to put you back in the same financial position as you were before which is either to repair the car or pay the pre-accident value of the car. There is nothing from what you have said that suggests they are trying to do otherwise but you are just not agreeing on the pre-accident valuation.

Valuation of a car is 95% straight forward, you put the details of the car into Glasses or Parkers or one of the other motor industry guides and it gives you a valuation based on it being in very good condition. You take that value and then deduct from it any pre-existing damage which is done as a percentage of the cost of repairing the damage... generally for older cars the percentage is lower as people are more likely to live with scuffed alloys on a 15 year old Fiesta than they would on a 15 month old S-Class.

Have you used any of the online vehicle valuation tools rather than just looking at list prices? Secondly, your own insurers are potentially going to be more generous as the FOS expects them to base a t/loss on the retail price (ie what a dealer would charge) whereas as a third party with no rights to go to the FOS the offers can be closer to private sale as this is a truer reflection of what your loss was (unless you are a motor dealer).

Rehnn83

Sandtree said:

Rehnn83 said:

Sadly it seems my thinking that the other party’s insurers duty is to put me back into the position I was before is incorrect.

They are required to put you back in the same financial position as you were before which is either to repair the car or pay the pre-accident value of the car. There is nothing from what you have said that suggests they are trying to do otherwise but you are just not agreeing on the pre-accident valuation.

Thanks,

I believe (and want to argue) that paying the pre-accident valuation isn't the same as returning me to the same finacial postion as before. (As I won't be able to buy a like for like repalcement car at the valution price (as I'm not a car dealer/don't work in the motor industry)). But that doesn't seem to be an argument I'm likely going to win. So I'll continue to push for repair.

I have looked at Parkers guide price and £3k is low end but ball park. But Parker's doesn't reflect list prices. I suspect the third-party have used the industry inside equivalent of Parkers. I'm tempted to ask them for real world examples of dealers in my area selling a similar aged car, with similar mileage and similar service history. (With the ultimate aim of getting the settlement value high enough to make repair economical (although I don't yet know what the repair costs are yet - I question I'll ask when I next hear from my insurers))

Sandtree

Rehnn83 said:
I believe (and want to argue) that paying the pre-accident valuation isn't the same as returning me to the same finacial postion as before. (As I won't be able to buy a like for like repalcement car at the valution price (as I'm not a car dealer/don't work in the motor industry)). But that doesn't seem to be an argument I'm likely going to win. So I'll continue to push for repair.

I have looked at Parkers guide price and £3k is low end but ball park. But Parker's doesn't reflect list prices. I suspect the third-party have used the industry inside equivalent of Parkers. I'm tempted to ask them for real world examples of dealers in my area selling a similar aged car, with similar mileage and similar service history. (With the ultimate aim of getting the settlement value high enough to make repair economical (although I don't yet know what the repair costs are yet - I question I'll ask when I next hear from my insurers))

Unfortunately the law doesnt agree with you, the pre-accident value will be what you would have gotten for it if you were to have sold it 5 minutes before the accident. If you would have sold it for that price that would logically mean you can buy it for that price too. As you are dealing with the TPI you should be looking at private sale valuations not dealer forecourt prices which dont have the cost of a warranty or business overheads etc baked into the price.

There isnt really an "industry inside equivalent", indeed Parkers is one of the more commonly used guides for older cars. They just have a software version of the book rather than having to flick through the pages. There are other guides like Glass which is more commonly used on newer cars and whilst you cannot buy it in WHSmiths its not exactly an industry insider book... for a start its used by the motor trade, insurers, finance companies, automotive manufacturers and a host of other industries. You can pay a couple of pounds to Glass on their consumer website and they give you a valuation.

Claiming the guidebooks are wrong is always a bit of an uphill struggle, the problem with quoting forecourt or Auto Trader advert prices is that they are the advertised price not the sales price. I could list my mk1 Ford Fiesta GL in Auto Trader tomorrow for £20,000 if I wanted but that doesnt mean I'll sell it for that or its worth that.  Other than looking at sold listings on eBay Motor its fairly difficult to find what the sales price would be. 

Aretnap

Rehnn83 said:

Sandtree said:

Rehnn83 said:

Sadly it seems my thinking that the other party’s insurers duty is to put me back into the position I was before is incorrect.

They are required to put you back in the same financial position as you were before which is either to repair the car or pay the pre-accident value of the car. There is nothing from what you have said that suggests they are trying to do otherwise but you are just not agreeing on the pre-accident valuation.

Thanks,

I believe (and want to argue) that paying the pre-accident valuation isn't the same as returning me to the same finacial postion as before. (As I won't be able to buy a like for like repalcement car at the valution price (as I'm not a car dealer/don't work in the motor industry)).

The guides should give several prices - trade price, private sale price, dealer price etc. If they were offering you the trade price then your argument that you're not a motor trader would be reasonable; however the dealer price is supposed to reflect actual prices paid by customers at a dealerships so, assuming it is accurate, it does reflect the cost to you of buying an equivalent replacement. If you claim through your own insurer then in accordance with Financial Ombudsman guidelines they should be offering you the dealer price.

See the Financial Ombudsman's guidelines here

https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/insurance/motor-insurance/vehicle-valuations-write-offs

Note again that adverts are generally less convincing than trade prices. The fact that someone advertises a car for, say, £4000 doesn't mean that it will sell for £4000. The dealer might accept a lower offer, or it might sit on his forecourt for weeks attracting no interest until he readvertises it at a lower price. (At which point it might be snapped up quickly - which means that the advertised prices on AutoTrader on any given day are likely to, on average, overstate the value). Still, the Ombudsman guidelines do say that adverts can be helpful if they strongly suggest that the guide price is wrong - but if they are not too much higher than the guide prices it is likely that they would be disregarded.

Also, the responsibility of the insurer (whether your own or third party) is purely to pay you money, not to find a replacement car. If it was a rare model then an exact replacement might not even exist; they would still only have to pay the theoretical price that it would have sold for just before the accident. Or you might not want an exact replacement and you might take the opportunity to upgrade to something newer, bigger or sportier, in which case the third party would obviously not be liable for the extra costs of doing so.

meadow2018

When my car was written off in an accident the third party insurer's reduced the amount they paid me by the valve of the salvage and I was paid this by the salvage company separately.  Could this be one of the deductions they are talking about?