Cash in lieu of repairs

typeczek

Hi guys, couple of weeks ago a guy hit the front bumper of my car while reversing. He straight away said it was his fault. I went to a garage to get a repair quote and contacted my insurance company which told me that I have to contact the other driver insurance company which I did. They've asked me to provide a qotation and picutes. I was told that they if they approve will pay for the repair straight to the garage. I haven't sent them the quotation yet.  Am I ok to ask them for cash in lieu of repairs and repair it myself? Or do i have to agree and follow their way of solving this? Thanks for your help guys 

DullGreyGuy

You aren't their customer and so its all down to the negotiation

Aretnap

Case law would suggest that you are entitled to cash in lieu for a third party claim. The gist is that what you're actually claiming for is the loss in value that your property suffered as a result of the accident, and that the cost of repairs is only relevant because in most cases it will be a reasonable measure of that loss in value. It follows that you would be entitled to the full market cost of repairs, even if you actually get your mechanic friend to do the repairs at mates' rates, or if you bodge the bumper back together yourself with gaffer tape.

https://www.fenchurchlaw.co.uk/coles-v-hetherton-implications-for-recovery-actions/

Also, if you took the third party insurer to court over the incident, the court will not order the insurer's representative to get his spanners out and fix your car - it will order the insurer to pay you money. What you subsequently do with the money is your business.

That's the theory at any rate. In practice you probably don't want to be taking court action over a minor prang that you reckon you can fix yourself, so it comes down to what you can negotiate.

typeczek

Aretnap said:

Case law would suggest that you are entitled to cash in lieu for a third party claim. The gist is that what you're actually claiming for is the loss in value that your property suffered as a result of the accident, and that the cost of repairs is only relevant because in most cases it will be a reasonable measure of that loss in value. It follows that you would be entitled to the full market cost of repairs, even if you actually get your mechanic friend to do the repairs at mates' rates, or if you bodge the bumper back together yourself with gaffer tape.

https://www.fenchurchlaw.co.uk/coles-v-hetherton-implications-for-recovery-actions/

Also, if you took the third party insurer to court over the incident, the court will not order the insurer's representative to get his spanners out and fix your car - it will order the insurer to pay you money. What you subsequently do with the money is your business.

That's the theory at any rate. In practice you probably don't want to be taking court action over a minor prang that you reckon you can fix yourself, so it comes down to what you can negotiate.

Thank you for your reply. Could you please advise me now on how I should approach the insurance company to enquire about the CIL settlement? The lady on the phone who filled in my claim form told me that they would not pay the money into my account as they pay directly to the garage for the repair. When I asked if it would be possible to pay into my account she said "I don't think we can do this". Maybe she just wasn't aware about this way of settlement? Should I send them the quotation that I've got from the garage and in the same email ask about CIL? Thanks a lot

8871Jlw

typeczek said:

Aretnap said:

Case law would suggest that you are entitled to cash in lieu for a third party claim. The gist is that what you're actually claiming for is the loss in value that your property suffered as a result of the accident, and that the cost of repairs is only relevant because in most cases it will be a reasonable measure of that loss in value. It follows that you would be entitled to the full market cost of repairs, even if you actually get your mechanic friend to do the repairs at mates' rates, or if you bodge the bumper back together yourself with gaffer tape.

https://www.fenchurchlaw.co.uk/coles-v-hetherton-implications-for-recovery-actions/

Also, if you took the third party insurer to court over the incident, the court will not order the insurer's representative to get his spanners out and fix your car - it will order the insurer to pay you money. What you subsequently do with the money is your business.

That's the theory at any rate. In practice you probably don't want to be taking court action over a minor prang that you reckon you can fix yourself, so it comes down to what you can negotiate.

Thank you for your reply. Could you please advise me now on how I should approach the insurance company to enquire about the CIL settlement? The lady on the phone who filled in my claim form told me that they would not pay the money into my account as they pay directly to the garage for the repair. When I asked if it would be possible to pay into my account she said "I don't think we can do this". Maybe she just wasn't aware about this way of settlement? Should I send them the quotation that I've got from the garage and in the same email ask about CIL? Thanks a lot

Yes, just ask.

some insurers don’t like to pay third parties directly (because could just pocket the cash) however in theory, insurers are paying for your loss, not for it to be repaired - so if the damage caused is say £2000 - if the insurer pays you the £2000 then their liability is discharged, regardless of what you do with the money. 

Cash in lieu is a rarer form of settlement but does happen.   But the question from an insurer perspective is why wouldn’t you want the insurer and garage to sort it out?  If you send them the estimate, they could authorise repairs direct to the garage, garage sends them the invoice, insurer pays the garage - you don’t really need to get involved?  

Up to you of course, but if you want a cash in lieu, yes just ask them! Hope that helps! 

DullGreyGuy

8871Jlw said:
some insurers don’t like to pay third parties directly (because could just pocket the cash) however in theory, insurers are paying for your loss, not for it to be repaired - so if the damage caused is say £2000 - if the insurer pays you the £2000 then their liability is discharged, regardless of what you do with the money. 

Cash in lieu is a rarer form of settlement but does happen.   But the question from an insurer perspective is why wouldn’t you want the insurer and garage to sort it out?  If you send them the estimate, they could authorise repairs direct to the garage, garage sends them the invoice, insurer pays the garage - you don’t really need to get involved?  

Insurers are more than happy for you to pocket the money and live with the damage.

Insurers prefer that you proceed with the repairs via their approved garages because they get substantial discounts. Even if you choose your own garage they will play hardball with them and get the price close to their approved garage network. 

Dont know if they ever implemented it but for example one large insurer was planing to enter the parts supply chain and so would supply the garage with whatever parts were needed immediately taking away the 20% markup garages normally try to get.

A lot of these thing happen behind the scenes and so customers dont realise. Its like when you claim for your broken TV and you get a £500 voucher for AO or Currys people dont realise/think that actually their insurer has paid £350 for that voucher rather than the face value. If you ask for CiL it then becomes evident because you get the £350 and potentially £350 less the VAT (£292) instead and so start the complaints that the TV was worth £500.

juser1234

Well I’m sort of in same boat although they haven’t written my car off the repairs come to more then the value of my car so I’m going to take the payout but keeping my car and paying garage to repair it