Insurance write offs for S and N category vehicles

Sandtree

Lifeofbrian2 said:

Sandtree said:

In theory Cat N shouldn't be covertly unsafe, though could be overtly unsafe with sharp metal edges from torn panels or broken glass (eg a T/L from a theft from vehicle) but as noted above, there is always a risk that the unpaid garage misses something when doing the photographs for the desk based engineer who then does the write off classification. Ultimately if you dont strip the car there is always a risk something is missed.

Add to that, T/L category is based on the accident damage... the car could have been a death trap before the accident with issues with the brakes, tyres etc (could be why it was involved in the accident in the first place) but could still be a cat N but tis being unsafe is unrelated to the total loss.

Thanks - I worked for many years with the police on stolen vehicles - mainly looking at the data - and as I found out - the insurance industry has a lot to answer for.

I said theft from vehicle rather than theft of vehicle... ie smash the window or gouge the lock to grab a handbag left on the seat or to get the stereo out. 

Not sure on what you think the insurance industry has to answer for based on the data on stolen vehicles... can certainly say that insurers pay the police vast sums in police reports and half look like they've been done by a 5 year old with crayon with half the information missing.  In all my time as a claims handler I think there was just a single police report that was of any use.  Naturally they won't tell you about its content until you've paid. 

jimjames

angrycrow said:

People buying scrapped cars from salvage auctions need to accept that the cat d / n car may turn out to be unrepairable as further damage is found on stripping. You also have no way of knowing if the car had other underlying mechanical problems prior to being in an accident. 

Buyer beware. 

Watching some of the salvage YouTube videos there are also cars that are cat N/S that have other issues and the cat marker is used to hide those or put people off the trail. So you may have a car that shows as a rear shunt but has engine damage of some sort that is unrelated.

Sandtree

jimjames said:

angrycrow said:

People buying scrapped cars from salvage auctions need to accept that the cat d / n car may turn out to be unrepairable as further damage is found on stripping. You also have no way of knowing if the car had other underlying mechanical problems prior to being in an accident. 

Buyer beware. 

Watching some of the salvage YouTube videos there are also cars that are cat N/S that have other issues and the cat marker is used to hide those or put people off the trail. So you may have a car that shows as a rear shunt but has engine damage of some sort that is unrelated.

The total loss category is applied by the insurer and isnt used to "hide" anything. 

The cat applied is based on the damage caused by the accident, the car may have had major issues before the accident and those issues may even be why it was involved in the accident but that won't change the category. 

There is naturally another possibility... the company/person that buys the salvage from the insurer owns the vehicle and are naturally free to make modifications to it, they have a non-write off with bald tyres and a S with brand new wheels they are obviously able to switch the wheels between the two cars as the impact of defects tends to be proportional so you're better off having a better non-write off.

Sandtree

Lifeofbrian2 said:
The "desk based engineer who then does the write off classification" is in itself a suggestion that the process is at the least shoddy and at best incomplete. 

How much extra do you want to pay for your insurance such that every car is fully stripped to check there are no problems at all before the classification? Remembering that an MOT doesn't go anywhere close to that either.

Insurance is a commoditised distress purchase, particularly for Motor where you have no choice but to insure. The general approach with legislation in recent years has been things to reduce premiums (eg moving whiplash into the small claims track) and the general view is that the more affordable insurance is the less cases of uninsured vehicles you have.

The law could be changed such that every panel is removed etc and it has to be seen in person before a T/L code is decided on and add £50 to everyone's premium but 1) that flys in the face of the current direction of driving premiums down and 2) again more cars go through MOTs than total losses so surely strengthening those test (or making more frequent) would make much bigger difference to overall road safety

AdrianC

Lifeofbrian2 said:

With regards damage, my point is simply this - the claims engineer should perhaps do his job by personally examining the vehicle rather than depending on photographs.   God knows the insurance companies make enough from the premiums to warrant the visit to where-ever the vehicle is kept.  I would have thought that an automotive engineer worth his salt should be able to pick up "wrong-uns" without having to strip the vehicle -  no? 

No. It's easy for structural damage to be well hidden until the car is stripped down - and, of course, that stripping-down incurs further cost. It isn't even usually stripped until pre-ordered parts have been delivered, because otherwise there's a half-dismantled car taking up a ramp/bay in the workshop.

For example - is the suspension arm bent, or are the mounting points on the shell/subframe bent, too? Perhaps that can't even be determined without putting the bare shell onto an alignment jig.

You're coming at this from the opposite angle to the insurers. They're coming at it from the angle of cost - and this type of personal lines is massively competitive, so margins are so low that many insurers have left the market. Everybody is using quote comparison engines to chisel the premium down, so insurers are Ryanairing policy benefits to the minimum. Of course they're trying to minimise claim costs, too.

If they can look at a picture and decide that they don't want to bother repairing that car, and would rather pay its market value, then what exactly is the issue?

BTW, humans don't even look at the pictures themselves all the time - a friend who's spent his career in dealership body shops spent a while working for an AI tech start-up working with insurers. Pics were parsed by computer, with only borderline cases going to people.

You say you're coming at this from a post-repair safety angle, linked to a consumer angle over the availability of categorisation information to post-repair buyers...? That's a totally different thing from whether cars are written off in the first place.

angrycrow

I am actually finding the ops blatantly offensive dismissal of certain peoples views simply because they do not align with the ops pre established views on what he/she wants to hear to support their pre assumed view offensve. 

My take is that the op likely wants to develop an app that allows people to access all vehicle data in one place and is seeking info to support it. Sorry op hpi beat you to it and won't want to give up their revenue stream.

OP if you are in market research you really need to open yourself to the possibility your assumptions can be wrong.

Before being critical of what has been shared above trying spending 10 to 20 years working car insurance or car repair. Once you have done so you will learn AdrianC comments above are spot on. 

Sandtree

Lifeofbrian2 said:

Sandtree said:

Lifeofbrian2 said:
The "desk based engineer who then does the write off classification" is in itself a suggestion that the process is at the least shoddy and at best incomplete. 

How much extra do you want to pay for your insurance such that every car is fully stripped to check there are no problems at all before the classification? Remembering that an MOT doesn't go anywhere close to that either.

Insurance is a commoditised distress purchase, particularly for Motor where you have no choice but to insure. The general approach with legislation in recent years has been things to reduce premiums (eg moving whiplash into the small claims track) and the general view is that the more affordable insurance is the less cases of uninsured vehicles you have.

The law could be changed such that every panel is removed etc and it has to be seen in person before a T/L code is decided on and add £50 to everyone's premium but 1) that flys in the face of the current direction of driving premiums down and 2) again more cars go through MOTs than total losses so surely strengthening those test (or making more frequent) would make much bigger difference to overall road safety

Interesting topic - motor insurance.  The UK and Ireland are unique in Europe because of the way 3rd party insurance is applied.  In the majority of European countries, 3rd party applies only to the vehicle which means that anyone can drive it.  In the UK it is more complex.  Although the 1988 Road Traffic Act only requires personal injury cover, the oligopoly that is motor insurance in the UK includes risk assessment for the driver(s) as well as the vehicle - and this is the basis of the problem because a policy holder is obliged to accept whatever the insurer wants - which may be 3rd party fire and theft or fully comp.providing 3rd party is included -  so not just the UK's version of 3rd party. 

In Australia its even more interesting (though there have been changes recently) in that there is what is/was known as CTP - which is/was supported by the state governments, only applies to personal injury and there are only 2 elements of risk - the engine size of the vehicle and the address of the owner (i.e. location where the vehicle is registered).  As you may imagine - the cost of insurance plummets.  The problem of motor insurance in the UK is due to the power of the insurance industry and their cosy relationship with legislators.

With regards damage, my point is simply this - the claims engineer should perhaps do his job by personally examining the vehicle rather than depending on photographs.   God knows the insurance companies make enough from the premiums to warrant the visit to where-ever the vehicle is kept.  I would have thought that an automotive engineer worth his salt should be able to pick up "wrong-uns" without having to strip the vehicle -  no? 

You need to reread the RTA, 145.3(a) states the policy must cover bodily injury and property damage... later on it sets a required minimum level for property whereas bodily injury is unlimited. 

There are several interesting different models out there from paying for TP coverage via fuel duty etc etc. Its sometimes difficult to say if they drive down pricing, obviously the Conservatives will always argue that free enterprise and market forces will ensure best pricing and that a state run operation would cost everyone more with inefficiency, bureaucracy etc etc. Many also have very different ways that the third party claims are covered, taking your Australia example and SA in particular, they pay loss of earnings less the first week and 20% so you instantly arent comparing the same things. Some have a simple scale and you get what the scale says no negotiation, arguing etc. 

Insurance engineers do do their job... its not their personal call on if the insurer wants to have field engineers or desk engineers. 

As to insurers just taking it on the chin as they "make enough" from the premiums... the industry net combined ratio for Motor is normally hovering around 100% so for every penny of premium they are paying out the same amount in claims and operating costs... 2019 was a NCR of 104.7% so for every £100 of premium they paid out £104.70.... not really swimming in profits to hire dozens of new staff all over the country. 

Bottom line is if you want to increase their costs that will be passed to the consumer and your average punter would rather cheaper than more expensive insurance 

Lifeofbrian2

Yep - the insurance industry is really a public service...............

• Measured by GWP, the private motor insurance market was worth £13.0bn in 2019.
• The leading trio remained unchanged, with Direct Line, Aviva, and LV= holding 32.2% of the market.
• The private motor insurance market will expand to £15.5bn by 2024, representing a compound annual growth rate (CAGR) of 3.4% between 2019 and 2024.

Sure.

AdrianC

Lifeofbrian2 said:

Yep - the insurance industry is really a public service...............

• Measured by GWP, the private motor insurance market was worth £13.0bn in 2019.
• The leading trio remained unchanged, with Direct Line, Aviva, and LV= holding 32.2% of the market.
• The private motor insurance market will expand to £15.5bn by 2024, representing a compound annual growth rate (CAGR) of 3.4% between 2019 and 2024.

Sure.

Nobody said it was a "public service".

But, yes, the UK car insurance market was £13bn in 2019. And what does that actually say, in isolation? Not much.
There's 32m cars registered in the UK - so that's an average annual premium of about £400. A quid a day.

How much profit is being made on that?

Apparently, not much - if claims are 5% above premiums, that means that the average policy is costing insurers £420 in claims.

Sandtree

Lifeofbrian2 said:

Yep - the insurance industry is really a public service...............

• Measured by GWP, the private motor insurance market was worth £13.0bn in 2019.
• The leading trio remained unchanged, with Direct Line, Aviva, and LV= holding 32.2% of the market.
• The private motor insurance market will expand to £15.5bn by 2024, representing a compound annual growth rate (CAGR) of 3.4% between 2019 and 2024.

Sure.

GWP is just a revenue figure, compare that to supermarkets that have £207bn and the top 3 hold much more than 32% market share.

Most insurers and supermarkets are for profit organisations... profit margins in supermarkets are bigger and the industry is more monopolised than private motor insurers so seems odd that if you want to go after a group for being the poster child of capitalist greed that you'd choose private motor over the likes of supermarkets.

Even if you do want to go after insurers look at Home or other lines of business that are much more profitable and for which some will argue that Motor is effectively a loss leader to cross sell other products on the back of.