Young person's motor insurance claims

daveybuntu

Interested to hear anyone's informed views on the following... there are two parts...

Part 1:

In March, in his first year of driving his own car, my 18 year old son had an 'at fault' accident in which his car skidded off the road.  No other vehicles involved. No injuries etc.  The car was worth approx £6.5k and he was fully compensated, less the cost of his £850 excess.

He is insured with Admiral, and they deemed the repair to be uneconomical and wrote the car off.  My son claims that he didn't agree to the car being written off but that the act of asking for a settlement figure from Admiral resulted in them writing the car off even though he hadn't confirmed that was what he wanted to do.

So that's my first question... is the act of *asking* for a settlement figure, a tacit agreement to writing off a vehicle in those circumstances?  It sounds like nonsense to me, but I didn't speak to Admiral on his behalf so I only have his word to take.

Part 2:

Last week, three months after the first accident, he's had another one.  Circumstances are different though.  This was a no-fault situation.  While approaching a roundabout, another drive rear-ended him causing one corner of the rear bumper to be crushed, but no mechanical damage as far as we can tell.  Value of this car, is again around £6.5k.  He reported the incident to his insurer.  He also took it to an independent body-shop which estimated £1.5k-£2k for a repair.  On speaking to Admiral further, they are saying that they will write-off the vehicle!  

I do not understand why it's up to my son's insurer to propose writing off the vehicle.  I'd have thought that under the circumstances, the vehicle would be assessed for repair, and if the repair is less than the cost of the vehicle, then it would be repaired; the third party's insurer covering the cost.

Why would this be otherwise?  Also, can we insist that the vehicle is repaired rather than written off?

I have asked my son to tell Admiral I am authorised to speak on his behalf, because I'm concerned he's misunderstanding something.  I plan to speak to them later, but I just wonder if anyone on here has had a similar situation.

He is worried that he won't get the full value for the claim, and is slightly fixated on keeping the car.

DullGreyGuy

Part 1 - the only way you get a settlement figure is by making a claim, once a claim is made it is up to the insurer how the claim is settled. The only thing you can do to change the outcome is to withdraw the claim and just live with the damage/pay for repairs yourself. 

Part 2 - fault/non-fault doesn't change the process of settling a claim from a you -v- your insurer perspective. If they believe its BER they will total loss it again. It will also be surprising that it's still worth the same after a total loss 3 months ago. Similarly surprising that Admiral are dealing with it in house, they normally farm non-fault cases out to accident management companies. 

Ultimately if he is happy with a more basic repair job why would you not want it to be total lossed, you pay the cheaper repair costs and pocket the difference?

daveybuntu

Thanks.

I'd be perfectly happy with a total loss, but I'm not a neurotic 18 year old.

I haven't been involved in a claim like this before, so i'm a bit naive about it all.

I perhaps didn't explain one bit very clearly... the first accident resulted in a total loss... the second accident took place in the car he bought to replace the first one; not the same vehicle.  The cost of the replacement vehicle was also £6.5k, three months ago.

Having just got off the phone to Admiral, I'm happier that I understand the situation better now.  It seems the insurers all just agree with each other when it comes to determining the value of a claim which I suppose makes perfect sense in most cases.  And it saves them all doing the same thing twice.

He is torn between taking the full amount offered, or keeping the car.  In the case of the latter, he would receive the full amount, less the salvage value (which is independently determined and non-negotiable).  The car would be categorised as category S or category N.  And I don't really understand the implications of this for the future, although I've been told it shouldn't have an impact on any insurance premiums.  I guess it just affects the notional value.

My son is ruminating over the possibility of being told the car is worth significantly less than he paid for it.  Which it could be, but I've explained to him that he needs to consider depreciation is just part-and-parcel of owning a car.

I have to say, i'm actually quite impressed with the two people I spoke to at Admiral earlier... my first experience seems to be that they have fairly good customer service, once you get past the AI bot!

DullGreyGuy

daveybuntu said:

Having just got off the phone to Admiral, I'm happier that I understand the situation better now.  It seems the insurers all just agree with each other when it comes to determining the value of a claim which I suppose makes perfect sense in most cases.  And it saves them all doing the same thing twice.

He is torn between taking the full amount offered, or keeping the car.  In the case of the latter, he would receive the full amount, less the salvage value (which is independently determined and non-negotiable).  The car would be categorised as category S or category N.  And I don't really understand the implications of this for the future, although I've been told it shouldn't have an impact on any insurance premiums.  I guess it just affects the notional value.

My son is ruminating over the possibility of being told the car is worth significantly less than he paid for it.  Which it could be, but I've explained to him that he needs to consider depreciation is just part-and-parcel of owning a car.

I have to say, i'm actually quite impressed with the two people I spoke to at Admiral earlier... my first experience seems to be that they have fairly good customer service, once you get past the AI bot!

In this scenario you are claiming from your insurer, your insurer then get subrogated rights to claim those costs back from the third party's insurer. 

Insurers dont agree the costs up front, they apply the policy terms (which can mean you get more money than pure indemnity - eg home insurance new for old) and will then claim from the TPI. There are various agreements between insurers, eg the RIPE (reduction in paperwork exchange) agreement, which means they will just take each others word for the value of the claim but they reserve the right to ask for the paperwork. If paperwork is required then the engineers report writing the vehicle off will be sent and the TPI may argue its been overpaid and so only reimburse what they think the car was worth - same if the settlement was above indemnity because of the policy terms, the TPI is only liable up to the indemnity value.

Disputes dont happen that often but they do happen and occasionally have significant court cases. A one a couple of years ago was where an insurer had created a new subsidiary as a repair management company who managed the network of repairers etc and added 10% to every bill of repair. Multiple other insurers disputed the 10% uplift was recoverable and it culminated in a High Court case (the judge decided they could recover the uplift).

Cat N just means the car is worth less and has no other ramifications. Cat S will have a new V5c which will state its been a cat S loss and must be inspected before its returned to the road. The later will have a greater impact on the value of the car.

It will be worth less but it'll be worth more than the salvage value once it's repaired if they can get it repaired cheaply enough.