Car Insurance Pay Out - who decides value?

[Deleted User]

DullGreyGuy said:

[Deleted User] said:

DullGreyGuy said:

[Deleted User] said:

400ixl said:

TELLIT01 said:

They are being ripped of with the current system.  I'd love to know how many people actually receive a payment high enough to get a true like for like replacement of a written off car.

The vast majority do.

Not saying any of the below applies to the OP as it is impossible to know without ever having seen the car in question.

To start with many people believe their car is in much better condition than it is, or that all of those optional extras increase they value more than they do, or it is a unique vehicle and therefore the guides don't cover it.

Usually people who claim the final valuation (noting that low balling first offers does happen) isn't market value are ones who live in regions where prices have always been higher and are not looking further afield. The pricing given is on a national basis, not regional and is based on the guide price for buying from retail outfit with minimum legal warranty (or remainder of manufacturers), at the price they sell at, not go on the forecourt for.

If the rip off was rife and you intimate then there would be a lot more noise about it. Not been directly involved for a while now, but it was certainly a case then that of the complaints in deadlock (which were in the low single digits) only a low percentage of those were not actually unrealistic expectations. It does happen that insurers get it wrong and can be hard (if not impossible) to get them to shift if they do even through appeal to the ombudsman.

If you want to get a guaranteed payment then either a) get an agreed value policy b) take out gap insurance.

Hopefully you can see the problem with this. Insurance is supposed to put you back in the position you were before the accident.

What actually happens is you end up with no car, probably needing to get a new one fast so you can go to work. You have to spend your time looking for a replacement, often at an awkward time and under pressure. You go from a vehicle you are confident in to one that is an unknown quantity with the legal minimum warranty.

Even if your car was nearly new and you have gap insurance, the wait for new cars is long and stock goes for over list price.

I don't think the insurance company sourcing the vehicle is the right solution, but just paying out a lump sum that's precisely calculated based on averages and buyers with more time available isn't right either.

Its supposed to put you back in the same financial position you were before, not the same physical position. 

If you had a £10,000 car giving you a cheque for £10,000 achieves that. Same as those houses built near cliff edges that go over due to errosion... no one is ever going to suggest that the insurer should rebuild the cliff to be able to put a new house on the top of it again!

This is also part of my problem... why is every secondhand car ever involved in an accident mechanically perfect? "A car you had confidence in" is a very big assumption. I accept it was more of a known quantity but that knowledge may include that the clutch was on its last legs etc. 

Ultimately first party insurance doesnt have to be limited to indemnification... just look at home insurance and that most are "new for old" or RTI/RV GAP insurance. An insurance policy could exist which paid an extra £500 or 10% or whatever on total loss valuations if companies believed there was a market for it and that customers would pay the extra £25 per year premium to have it. Unfortunately personal lines insurance is a heavily commoditised distress purchase and the general experience is that customers will switch from a well known brand that they've had good experiences with to a total unknown to save less than £5 per year so the chances of them pay the extra £30 from that unknown brand is fairly slim.

This is only true if your time is worthless.

Not at all... you agree to uninsured losses when you take a policy out. Even if a car is repairable it will cost you time to take it to the garage or wait in for them to collect it. Your excess is an uninsured loss. Buy from Admiral Group and all optional extras are not insured (factory fit or post prod) and so are an uninsured loss if they are damaged in a claim or if a total loss. Your phone being used as a satnav is limited to £100 cover whereas most new phones are way above this. 

There is nothing that legally stops these things being insured just customers would rather save £10 a year on insurance and carry these risks (or more accurately they are probably ignorant of what risks they are taking when saving the £10 other than the excess). Ultimately there is a reason why people increasingly buy insurance that doesnt include Driving Other Cars and yet HNW Motor insurance not only provides DOC but gives fully comp cover on DOC rather than TPO, they provide a like for like replacement vehicle during repairs or total loss no matter how long etc... again a feature a basic policy could offer but one that most consider the market wont pay for.

HMW dont include a cover for your time, at least the few I've looked at, but again no reason they couldnt if they thought they'd get more sales despite the higher price

You don't agree to anything with the third party insurer. They have to cover all your losses.

They tell you that the car is a write off and arrange a pay out. You must minimise your losses so you can't wait for the pay out if you have cash to buy a car, or the ability to get more finance. It's up to you to source another car, potentially involving considerable travel since they base the pay out on national sale prices rather than ones local to you. You must spend money getting cars checked if you buy privately. You may be unable to agree a price that meets the pay out, in which case more time is wasted or you eventually go back to them and ask for more money.

If car prices are rising you are doubly screwed because they pay out is based on the value at the time of the accident, not what it costs to replace today.

This all has to be fit around your work schedule. You may need transport to get to work, but the insurance company won't want to pay for a hire car from the moment the pay out is made.

DullGreyGuy

[Deleted User] said:

DullGreyGuy said:

[Deleted User] said:

DullGreyGuy said:

[Deleted User] said:

400ixl said:

TELLIT01 said:

They are being ripped of with the current system.  I'd love to know how many people actually receive a payment high enough to get a true like for like replacement of a written off car.

The vast majority do.

Not saying any of the below applies to the OP as it is impossible to know without ever having seen the car in question.

To start with many people believe their car is in much better condition than it is, or that all of those optional extras increase they value more than they do, or it is a unique vehicle and therefore the guides don't cover it.

Usually people who claim the final valuation (noting that low balling first offers does happen) isn't market value are ones who live in regions where prices have always been higher and are not looking further afield. The pricing given is on a national basis, not regional and is based on the guide price for buying from retail outfit with minimum legal warranty (or remainder of manufacturers), at the price they sell at, not go on the forecourt for.

If the rip off was rife and you intimate then there would be a lot more noise about it. Not been directly involved for a while now, but it was certainly a case then that of the complaints in deadlock (which were in the low single digits) only a low percentage of those were not actually unrealistic expectations. It does happen that insurers get it wrong and can be hard (if not impossible) to get them to shift if they do even through appeal to the ombudsman.

If you want to get a guaranteed payment then either a) get an agreed value policy b) take out gap insurance.

Hopefully you can see the problem with this. Insurance is supposed to put you back in the position you were before the accident.

What actually happens is you end up with no car, probably needing to get a new one fast so you can go to work. You have to spend your time looking for a replacement, often at an awkward time and under pressure. You go from a vehicle you are confident in to one that is an unknown quantity with the legal minimum warranty.

Even if your car was nearly new and you have gap insurance, the wait for new cars is long and stock goes for over list price.

I don't think the insurance company sourcing the vehicle is the right solution, but just paying out a lump sum that's precisely calculated based on averages and buyers with more time available isn't right either.

Its supposed to put you back in the same financial position you were before, not the same physical position. 

If you had a £10,000 car giving you a cheque for £10,000 achieves that. Same as those houses built near cliff edges that go over due to errosion... no one is ever going to suggest that the insurer should rebuild the cliff to be able to put a new house on the top of it again!

This is also part of my problem... why is every secondhand car ever involved in an accident mechanically perfect? "A car you had confidence in" is a very big assumption. I accept it was more of a known quantity but that knowledge may include that the clutch was on its last legs etc. 

Ultimately first party insurance doesnt have to be limited to indemnification... just look at home insurance and that most are "new for old" or RTI/RV GAP insurance. An insurance policy could exist which paid an extra £500 or 10% or whatever on total loss valuations if companies believed there was a market for it and that customers would pay the extra £25 per year premium to have it. Unfortunately personal lines insurance is a heavily commoditised distress purchase and the general experience is that customers will switch from a well known brand that they've had good experiences with to a total unknown to save less than £5 per year so the chances of them pay the extra £30 from that unknown brand is fairly slim.

This is only true if your time is worthless.

Not at all... you agree to uninsured losses when you take a policy out. Even if a car is repairable it will cost you time to take it to the garage or wait in for them to collect it. Your excess is an uninsured loss. Buy from Admiral Group and all optional extras are not insured (factory fit or post prod) and so are an uninsured loss if they are damaged in a claim or if a total loss. Your phone being used as a satnav is limited to £100 cover whereas most new phones are way above this. 

There is nothing that legally stops these things being insured just customers would rather save £10 a year on insurance and carry these risks (or more accurately they are probably ignorant of what risks they are taking when saving the £10 other than the excess). Ultimately there is a reason why people increasingly buy insurance that doesnt include Driving Other Cars and yet HNW Motor insurance not only provides DOC but gives fully comp cover on DOC rather than TPO, they provide a like for like replacement vehicle during repairs or total loss no matter how long etc... again a feature a basic policy could offer but one that most consider the market wont pay for.

HMW dont include a cover for your time, at least the few I've looked at, but again no reason they couldnt if they thought they'd get more sales despite the higher price

You don't agree to anything with the third party insurer. They have to cover all your losses.

They tell you that the car is a write off and arrange a pay out. You must minimise your losses so you can't wait for the pay out if you have cash to buy a car, or the ability to get more finance. It's up to you to source another car, potentially involving considerable travel since they base the pay out on national sale prices rather than ones local to you. You must spend money getting cars checked if you buy privately. You may be unable to agree a price that meets the pay out, in which case more time is wasted or you eventually go back to them and ask for more money.

If car prices are rising you are doubly screwed because they pay out is based on the value at the time of the accident, not what it costs to replace today.

This all has to be fit around your work schedule. You may need transport to get to work, but the insurance company won't want to pay for a hire car from the moment the pay out is made.

Unlike first party claims the insurers dont set the rules on what third parties can claim, thats the jobs of the courts and the government. 

Under common law, which most motor claims are made with the law of torts, the courts have pretty much decided that life unfair at times and you just have to suck it up. As such courts generally reject claims for inconvenience beyond a token amount which often just gets rolled into a miscellaneous category or a global offer.

You are wrong on a few points though, insurers will typically pay for hire for up to 7-10 days after payment and secondly I've never seen a date field in vehicle valuations and so prices are live not at the date of loss in the same way the repair invoice is paid as presented not what it would have been X days/months earlier when the incident happened.

If you wanted this to change though you'd need to be writing to your MP rather than complaining about insurance companies.

[Deleted User]

MPs aren't going to do anything with this government.

There are examples of insurance companies arguing that the price at the time of the accident applies, so you are wrong and that, yet again.

DullGreyGuy

[Deleted User] said:

There are examples of insurance companies arguing that the price at the time of the accident applies, so you are wrong and that, yet again.

Examples... there are examples of everything if you look deep enough. I said that the last time I saw the likes of CAP or Glass there was no date field to retrospectively price a vehicle. Back in my claims days books were still used and no the engineers didn't have the 72 books covering the last 6 years, we had the latest one, possibly the one from the month before if someone hadn't put it in recycling yet.

Plus you are forgetting that the price of a 2 year old car is, excluding current circs, going to be higher than the price of a 2.5 year old car if it takes 6 months to resolve liability and therefore at the point of claim rather than the point of settlement would be beneficial for claimants. I understand the car market is settling down again now and so once again backdating the valuation will become beneficial