'Total Loss' for minor vehicle scrape

BarnabyWild

Hello...
I’m in the middle of a situation with my car insurance which is highlighting something endemic in the industry.
In short; Guy in work van bumps my parked car when exiting his space. The damage is a slightly bent wheel arch and scraped paintwork. Cursory quote to repair from a guy I know: £400. Going down the insurance’s chosen repairers (credit repair scenario - no fault claims) the cost of the repair has been stated to be £4000 (yes!). Speaking with the ‘independent engineer’, he’s happy that everything stacks up (it really doesn’t - he even told me it was unroadworthy and I shouldn’t drive it - completely wrong - it would pass its MOT with no issues). They’ve quoted for repairs that aren’t part of the damage despite me explaining at the time exactly what damage had been done by the 3rd party. It’s escalated to a ridiculous set of circumstances where the car is being classed as a ‘Total Loss’ for a very minor issue. I’ve been told I can keep the car and get a few £000’s which would be claimed from the 3rd Party’s insurance but this seems fundamentally wrong to me.
I called the 3rd party and he has said he’ll pay the few hundred quid to repair but he’s pretty skint.
Accepting the big payout means my car gets downgraded to ‘Category N’ which means the potential for higher insurance premiums (10-15% I’ve been told) and there’d be issues if I want to sell it, which currently I don’t.
Is there anything else I should be mindful of with a Cat N car? Whilst a windfall is very appealing, I feel it’s ‘bad money’, very much against my principles and I’m contributing to a situation/racket that’s incensed me. Any advice gratefully appreciated… thank you.

400ixl

CAT N makes next to no difference for insurance cost purposes. The fact you have been in a non fault accident may well do, but that is the same regardless of repair.

Resale wise, it will maybe have a 10% impact, but these days so many cars are falling into this the impact is lessening year on year.

The costs to insurers for repairs are different to a one off back street repair. They have to consider building in the cost of a courtesy car, using original OEM parts only, providing a long term warranty for the work etc. You also have to add in other costs that you haven't, the assessor for a start.

Not saying that these costs are all justifiable but they have to be considered and built into the pricing. Insurers have the repair franchises compete for the work on a regular basis so its not a complete free for all. 

It could be far worse, they could have handed you off to an accident management company who would have immediately tried to put you into a credit hire car for £x00's a day whilst getting it sorted out.

Good to see someone with ethics that challenge all of this and look to minimise the cost as we all at the end of the day pay it back in insurance premiums.

DullGreyGuy

400ixl said:

It could be far worse, they could have handed you off to an accident management company who would have immediately tried to put you into a credit hire car for £x00's a day whilst getting it sorted out.

It sounds like they have handed it to an accident management company hence the "independent engineer" rather than the insurers own assessor, the comment that they vehicle isn't road worthy and the fact they've said the total loss value will be claimed from the TP Insurer/ it would have been "credit repairs"

BarnabyWild said:

Hello...
I’m in the middle of a situation with my car insurance which is highlighting something endemic in the industry.
In short; Guy in work van bumps my parked car when exiting his space. The damage is a slightly bent wheel arch and scraped paintwork. Cursory quote to repair from a guy I know: £400. Going down the insurance’s chosen repairers (credit repair scenario - no fault claims) the cost of the repair has been stated to be £4000 (yes!). Speaking with the ‘independent engineer’, he’s happy that everything stacks up (it really doesn’t - he even told me it was unroadworthy and I shouldn’t drive it - completely wrong - it would pass its MOT with no issues). They’ve quoted for repairs that aren’t part of the damage despite me explaining at the time exactly what damage had been done by the 3rd party. It’s escalated to a ridiculous set of circumstances where the car is being classed as a ‘Total Loss’ for a very minor issue. I’ve been told I can keep the car and get a few £000’s which would be claimed from the 3rd Party’s insurance but this seems fundamentally wrong to me.
I called the 3rd party and he has said he’ll pay the few hundred quid to repair but he’s pretty skint.
Accepting the big payout means my car gets downgraded to ‘Category N’ which means the potential for higher insurance premiums (10-15% I’ve been told) and there’d be issues if I want to sell it, which currently I don’t.
Is there anything else I should be mindful of with a Cat N car? Whilst a windfall is very appealing, I feel it’s ‘bad money’, very much against my principles and I’m contributing to a situation/racket that’s incensed me. Any advice gratefully appreciated… thank you.

Who are your insurers? It sound very much like you are either insured via a broker or insured by Admiral Group both of which will routinely pass non-fault claimants to an accident management company who get 10% of the repair invoice, a kickback from the "independent engineer" (if its not a sister company) and large commissions on hire car costs. 

In principle they take on risk as if they are unable to recover their outlay from the third party/insurers its written off and hence they need to overcharge to cover those losses. 

Assuming you're not in hire etc then you can directly approach the third party insurer and provide a pro-forma invoice  for the £400 stating you won't need a replacement vehicle and they undoubtably will jump at the opportunity of settling on this basis. 

In principle the car being a cat N would reduce your future premiums not increase them because the maximum payout is reduced as written off vehicles are worth less than those that havent been.