Outstanding Car Loan After Non-Fault Total Loss Accident

DisgruntledTotalLossGuy

Hi everyone, I wasn't sure whether a legal query about a financial matter would be appropriate in this forum, but here goes:

Following a non-fault car accident last November, I have been left much more financially worse off paying an outstanding loan on a written-off car, which was caused by the 3rd party driver and their Alzheimer's disease. My insurer’s final offer will not put me back into my original position, and I would like to understand what my rights are and how I could be put back into my pre-accident financial position, given that the accident was fully avoidable.

The accident happened in November 2022. The 3rd party insurance admitted liability, and the 3rd party driver revealed they suffer from Alzheimer’s disease, a neurodegenerative condition. My dashcam footage strongly suggests that the neurodegenerative condition played a significant role in causing the accident. I firmly believe that this accident could have been avoided, because the driver ought to have handed in their license and/ or their insurer should have denied them car insurance – the 3rd party insurer and driver are at fault.

As of the day of the accident, I still had ~£3,700 left on my £8,000 bank loan to pay, due next spring. An independent vehicle valuation reports my car is worth £4,000, and is likely to appreciate in value with its modern classic status. Currently, the final offer of £4,000 from the insurer leaves me much more financially worse off than before the accident. My worsened position is due to the 3rd party insurer’s decision to underwrite the neurodegenerative driver, who caused the accident. Throughout the process, my insurer has failed to consider these points and to restore my financial position, after denying any wrongdoing.

My attempts to persuade them otherwise led them to interpret my views as a complaint, which gave them the opportunity to make their final offer. Any challenge to this must go to the Financial Ombudsman, but I'm worried that they will have the same view, seeing as many of the financial institutions appear to have each other’s backs rather than their own consumers. To make matters more interesting, my insurer is one of the big names and is positively reputed, and the 3rd party insurer is their subsidiary.

What I'm really looking for today is an inkling of whether there's a way to being put back in the same position I was in before the accident. This would mean claiming the full costs of the vehicle repair (~£7,000), either from the 3rd party insurer or directly from the 3rd party driver, given that the driver’s worsening health condition should have stopped them from driving and therefore causing the accident. Otherwise, I’m left in a worse financial situation that I have been put in by in a dangerous driver and their unconcerned insurer. I wasn't sure if such a legal query would fit in this forum, but I've been struggling to find an answer for months, to the detriment of my mental health. Thank you for taking the time to read this. 

DullGreyGuy

How are you worse off?

You say you had a car worth £4,000 and a debt of £3,700 in the form of a bank loan

Now you have £4,000 cash and a debt of £3,700 in the form of the same loan. That is the same position and you can use the £4,000 to buy a replacement vehicle if you wish. 

If you are trying to say they have undervalued your car and it was worth more than £4,000 then put in a complaint but the Ombudsman is very clear on how vehicles are valued.

You have no right to claim the loan from anyone as that would be betterment given you were only in credit £300 before the accident and so thats how you should remain after the accident. 

DisgruntledTotalLossGuy

DullGreyGuy said:

How are you worse off?

You say you had a car worth £4,000 and a debt of £3,700 in the form of a bank loan

Now you have £4,000 cash and a debt of £3,700 in the form of the same loan. That is the same position and you can use the £4,000 to buy a replacement vehicle if you wish. 

If you are trying to say they have undervalued your car and it was worth more than £4,000 then put in a complaint but the Ombudsman is very clear on how vehicles are valued.

You have no right to claim the loan from anyone as that would be betterment given you were only in credit £300 before the accident and so thats how you should remain after the accident. 

It's a fair point, however in the grander scheme of things I am worse off. I could pay off the outstanding balance, but I'd be without a car. I could go out and buy a similar car, but it'd be unlikely that it would match my old car with respect to spec, engine, transmission, body style etc. Do you see where I'm coming from?

I could be too close to my situation here, but I think it's unfair that I'm in this position given that this accident needn't have happen (considering the other driver's circumstances). Which is why I feel the need for the repair to be paid for. I'd like to know if that's possible, or if it's an unreasonable request.

Car_54

As above, if your car was worth £4,000, then £4,000 is a fair offer.

It is difficult to see how the TP insurer is at fault: it seems highly unlikely that the TP made them aware of his condition. If they had not provided cover (whether or not they knew), then you would have been hit by an uninsured driver - would you have preferred that?

BTW the Ombudsman will not entertain a complaint against the TP insurer, since you are not their customer.

DisgruntledTotalLossGuy

Car_54 said:

As above, if your car was worth £4,000, then £4,000 is a fair offer.

It is difficult to see how the TP insurer is at fault: it seems highly unlikely that the TP made them aware of his condition. If they had not provided cover (whether or not they knew), then you would have been hit by an uninsured driver - would you have preferred that?

BTW the Ombudsman will not entertain a complaint against the TP insurer, since you are not their customer.

I have cover against uninsured drivers, but that's not the point. If this was a normal accident, I'd have accepted the offer and moved on. But in my case, the 3rd party insurer insured someone not fit to drive. Following such a grave error of judgement, I feel that they should pay for the repair. 

But I take both your point and DullGreyGuy's point, assuming you are quoting the FCA. 

Herzlos

How the car was financed or it's potential value are irrelevant here. The only relevant figure is how much the car was worth moments before the crash - the insurance company reckon that's £4000, but you seem to think it's higher.  Can you prove your valuation? Are there similar cars for sale you can use as a reference?

How much do you want the insurance company to pay you?

DisgruntledTotalLossGuy

Herzlos said:

How the car was financed or it's potential value are irrelevant here. The only relevant figure is how much the car was worth moments before the crash - the insurance company reckon that's £4000, but you seem to think it's higher.  Can you prove your valuation? Are there similar cars for sale you can use as a reference?

How much do you want the insurance company to pay you?

Hi Herzlos, I don't think it's higher than the valuation. Mind you, my £4,000 valuation was independent and my insurer honoured it after offering £2,000 then £3,500.

Let me spell out my issue - the 3rd party insured someone not fit to drive, who caused the accident and the write-off. These events have put me in my current position as being worse off. Therefore, I feel that it's the 3rd party insurance's job to undo these effects by repairing the car. Yes, the car isn't "economical to repair", but that cause is ultimately their fault. Does that make sense?

Car_54

DisgruntledTotalLossGuy said:

Let me spell out my issue - the 3rd party insured someone not fit to drive, who caused the accident and the write-off. These events have put me in my current position as being worse off. Therefore, I feel that it's the 3rd party insurance's job to undo these effects by repairing the car. Yes, the car isn't "economical to repair", but that cause is ultimately their fault. Does that make sense?

Unless the TP insurer were told of the driver's condition, they have done nothing wrong. 

By your logic, the DVLA were also negligent in licensing the driver - even though, again, they were unaware - and perhaps equally to blame.

While I have every sympathy with your situation, I believe your argument is totally without merit.

DullGreyGuy

DisgruntledTotalLossGuy said:

DullGreyGuy said:

How are you worse off?

You say you had a car worth £4,000 and a debt of £3,700 in the form of a bank loan

Now you have £4,000 cash and a debt of £3,700 in the form of the same loan. That is the same position and you can use the £4,000 to buy a replacement vehicle if you wish. 

If you are trying to say they have undervalued your car and it was worth more than £4,000 then put in a complaint but the Ombudsman is very clear on how vehicles are valued.

You have no right to claim the loan from anyone as that would be betterment given you were only in credit £300 before the accident and so thats how you should remain after the accident. 

It's a fair point, however in the grander scheme of things I am worse off. I could pay off the outstanding balance, but I'd be without a car. I could go out and buy a similar car, but it'd be unlikely that it would match my old car with respect to spec, engine, transmission, body style etc. Do you see where I'm coming from?

I could be too close to my situation here, but I think it's unfair that I'm in this position given that this accident needn't have happen (considering the other driver's circumstances). Which is why I feel the need for the repair to be paid for. I'd like to know if that's possible, or if it's an unreasonable request.

Why wouldnt it match your old car? If you think £4k is a reasonable valuation, which you seem to think it is, then you can buy the identical car for it. In practice it may take a little time to find the identical one but a little flex on colour etc will result in a nearly identical car and possibly a small amount of change.

The whole reason a claim is valid is because it was something that neednt have happened... if it was truly unavoidable then the TP wouldnt be liable and their insurers would rebuke any claim made against their insured. Its a very small percentage of incidents that go down as an "act of god" (as these things are described) and the vast majority are because someone was driving too fast for the road conditions, not paying due care, intoxicated, impaired health etc.

Herzlos

DisgruntledTotalLossGuy said:
Let me spell out my issue - the 3rd party insured someone not fit to drive, who caused the accident and the write-off. These events have put me in my current position as being worse off. Therefore, I feel that it's the 3rd party insurance's job to undo these effects by repairing the car. Yes, the car isn't "economical to repair", but that cause is ultimately their fault. Does that make sense?

You'd want to be in the same position no matter how fit to drive the other party was. If I hit your car and wrote it off, how would that be different?

The 3rd party being unfit to drive is a wholly separate issue and I'd normally be for them being prosecuted by the police but given the diminished mental capacity I'm not sure that'd help. I'd also be all for more stringent checks on older drivers and an easier process for removing driving licenses from people who shouldn't be driving any more. That's assuming they still had one.

CliveOfIndia

Whether or not the third party was fit to drive shouldn't concern you.  It may concern his insurers, possibly the DVLA, possibly the police, possibly someone else, but it has no bearing on your situation.

A standard insurance policy will always pay out the "market value" of a car.  If you disagree with your insurer's assessment of what the market value is, you're at liberty to challenge it - but to be successful, you'd need to provide evidence that the realistic "going rate" (in autotrader or via an independent report or whatever) for an identical car is such-and-such.

As others have said, from the information given it would appear that £4000 is a fair offer and you're in the same situation, financially, as you were before the accident.

For future reference, which hopefully may be helpful, there is a product called Gap Insurance.  This will make up the difference between what you paid for the car and the "market value" paid out by the insurance.  It's more common on brand new or nearly-new cars (I will admit I don't know how widely available it is on older used cars), but it might be something you want to look into.

And if your car is indeed what people would call a "classic" then you can get "Agreed Value" policies.  These tend to be more expensive, and require you to provide evidence of the value, but are often used for classic or very rare cars where it's difficult to ascertain a representative "market value".