Insurance Claim - where repair will cost more than the car

[Rusty Wishbone]

To save confusion, this question concerns my son's (second) Skoda, and how to get him into the best financial position following an accident last week. No Elan was injured in this story.

Another vehicle drove into the side of his car, and has damaged two doors, the rear wing and the sill. None of them are badly damaged, but all are dented and scraped. The car is looking battered but the damage is fairly light. The other party accepts responsibility, but is thinking about paying for the repair to avoid making a claim. I can't imagine that the repair cost will be less than £1500 (more likely £2000+), and the car is not worth more than £1000, so financially, the car is a write off.

I would like to get him into one of the following positions:
1. The car is repaired; or
2. He gets a wad of money in lieu of a repair so that he can keep driving the battered car around for a few years while he is a student. The wad of cash can then be put towards a replacement when he has a job.

I would prefer not to end up in the position where the insurance company pays him £250 and takes the damaged car away leaving him stranded at university without a car.

One other factor. Since he has already written off one Skoda, he would be devastated to have to scrap another one. I want to avoid his confidence being damaged.

I think he needs to tell his insurance company about the accident ASAP, but to tell them that the other party is considering paying for the repair. I am pretty sure that the other party will have to make a claim in view of the repair costs. But how does he then best get to position 1 or 2?

I would welcome your thoughts.

[Rambo]

My thoughts...

Get an idea of damage costs
Settle privately with the culprit and get a cash equivalent value
Drive round with the bashes and eventually scrap the car once it has served its useful purpose for your son
Don't involve the insurance companies

Well, that's what I'd do but I doubt it's what you want to hear ? Or, in fact, if it's legal

I'm sure Chief Inspector Dave Pink will advise

[dapinky]

Whilst I'd not disagree with the poridge-nosher, my first concern is for the safety of your lad and other road users.

If you can be 100% certain that the vehicle is not compromised (structurally as opposed to cosmetically), then doing as said makes sense. If, however, there is any chance that something unseen may be damaged, then common sense says that scrapping it now is the best thing to do.

It is always a problem when we let heart rule head - and there is no way to avoid such issues - BUT, safety has to trump hurt feelings and sensibilities.

[Rambo]

Yes, I would agree with you Dave. Safety first. Safety is paramount over £££

[John_W]

I’d go through the insurance. You can’t trust people not to lead you along and then “change their mind” once it comes to time to pay the amount of the repairs. Especially an amount like that.

[lotusles]

Ok, I would make a claim against the TP, you can find out their insurer by contacting MID.

If you claim from the TP Insurer they have no title to your vehicle should it become a total loss, however you also run the risk of having the vehicle categorised and if its classified as cat B then you wont be allowed to put it back on the road. Unfortunately sill damage does render the vehicle at least a cat S (structural damage), but you may be able to settle on CIL basis.

If you claim through your own insurer they may a policy condition that you cant retain the salvage.

[alan e]

Will it past its next MOT with the damage done if not it wont be on the road for very long anyway.

[Saltire]

I’m fortunate, because I have a tame garage just up the road. And if it were my car, the first thing I’d do is take it up there and say “Can you put it on your ramp, please, Mark, and let’s have a look underneath”. Then you can check the chassis isn’t twisted, and see if any safety-related items have been damaged. That a) means you know if it’s dangerous to drive, and b) gives you some leverage with the third party. Then I’d give Mark a few quid in Prosecco money (not beer, he has expensive tastes)

Do you have a “Mark” who might do that for you?

[Rusty Wishbone]

I hadn't thought about the possibility of it failing an MOT because of the dent in the sill. I wouldn't have thought that it would cause it to fail, but I don't know the rules like a tester. So I think that I need to get him to run it past an accident repair shop to see if he can get a ballpark estimate for repair, and reassurance that it won't fail its next MOT. I shall get him to report the accident to his insurer too in the unlikely event that he ends up having to make a claim through them. They might even be able to give him some advice.

[Simon_P]

Unfortunately insurance companies exist for their profit so they will do what is best for them.

Your Son will have signed a contract that requires that he report every incident, and that he appoints his insurer to act on his behalf possibly without reference to him.

They will do whatever is most expedient for them, it has nothing to do with who was right or what is fair or reasonable.

Read the policy document, your best option may be to negotiate to buy the salvage, but you will need to do this up front, as they decide what happens to your car and it belongs to them when they decide to write it off.

Whatever you do don't let it out of your sight, and that includes leaving it at a repairer for an estimate. It will be on the way to the salvage auction before you can draw breath - there is money in salvage.

[Bern]

I had something similar happen to me about 10 years ago.

The other driver asked if he could pay without involving the insurance companies. I got a quote, but heard nothing from him. So after a few days I notified the insurance company. Next I heard that he was claiming it was my fault! Luckily the insurance company didn't see it that way, and it all got sorted without costing me anything.

[lotusles]

Unfortunately insurance companies exist for their profit so they will do what is best for them. Excuse me, but is that not the principle of all businesses.

Your Son will have signed a contract that requires that he report every incident, and that he appoints his insurer to act on his behalf possibly without reference to him. Absolutely correct

They will do whatever is most expedient for them, it has nothing to do with who was right or what is fair or reasonable. Rubbish, Insurers are controlled by FCA and TCF

Read the policy document, your best option may be to negotiate to buy the salvage, but you will need to do this up front, as they decide what happens to your car and it belongs to them when they decide to write it off. Not true, the owner always has title to the salvage unless you have signed a contract otherwise

Whatever you do don't let it out of your sight, and that includes leaving it at a repairer for an estimate. It will be on the way to the salvage auction before you can draw breath - there is money in salvage.

Cobblers, please give me your expert advise on how I might make some money from the Liverpool Arena Fire.

[Andy_J]

My partner has her car hit in a carpark a couple of years ago. fortunately there was CCTV and although the culprit said they would pay at the time, they later reneged on the offer. We put the claim to an accident management company who dealt with arranging the repair, provided a courtesy car and claimed off the other parties insurance.

We insisted on a repair of my partners car even though the cost of the whole claim was more than the value of the car. Your own insurance may be able to writ off the car if the repair cost is more than the car's value but if you are claiming directly against the other parties insurance you can claim to have the vehicle put back to the condition pre the accident and any other costs you have incurred due to the negligence of their customer

[Simon_P]

Lotusles,
My first point was to illustrate exactly that, policyholders are sold the belief that insurance companies are there for them. The reality is that they are there to make money,

Hence my subsequent points they will decide that your car is written off and it will be on Canvey Island as soon as as it is out of sight, with no realistic possibility to "retain the salvage" no matter what the policy document says. I speak from bitter experience, twice!

Regarding fair or reasonable, I have experienced insurance company expedience, and it has nothing to do with what is right or just, it is a purely financial calculation. Of course they cannot force you to assign your right to be heard in court but the wording suggests that you are not covered if you do...so you're buggered! We are talking here of an industry that was selling details of claims to no win no fee solicitors until the govement intervened, doesn't say much for the regulators, not exactly the moral high ground.

Regarding your last comment we're discussing a cheap car, not a major incident, but taking your point objectively, we all understand that the cost claims is covered in future premiums and the industry works on a cost plus model - somewhat of a luxury for most industries so no sympathy here.


Andy,
No, legally the other party is only liable for the value of your loss ie the value of the car plus costs so you cannot insist that they fix it if the repair is more than its value.

[Andy_J]

Simon - Only speaking from experience and maybe scots law is different, but a £4k 3rd party claim on a 54 Hyundai coupe that cost £1400 when bought, you can claim to have your vehicle put back to pre accident condition .

[Simon_P]

How much was costs and how much for repairing the car?
The costs and other liabilities are capped in the £millions.

[lotusles]

Lotusles,
My first point was to illustrate exactly that, policyholders are sold the belief that insurance companies are there for them. The reality is that they are there to make money, They are there to exist. Look at the claims experience of the leading insurers, its quoted as % of £1 income.

Hence my subsequent points they will decide that your car is written off and it will be on Canvey Island as soon as as it is out of sight, with no realistic possibility to "retain the salvage" no matter what the policy document says. I speak from bitter experience, twice! Ok look at how much work Canvey Island do in the context of Insurance and claims and Total Losses, you were obviously a minority.... plus any real insurer would not advertise or crush your car until full title has been obtained, eg we have agreed and paid the PAV.

Regarding fair or reasonable, I have experienced insurance company expedience, and it has nothing to do with what is right or just, it is a purely financial calculation. Of course they cannot force you to assign your right to be heard in court but the wording suggests that you are not covered if you do...so you're buggered! We are talking here of an industry that was selling details of claims to no win no fee solicitors until the govement intervened, doesn't say much for the regulators, not exactly the moral high ground. You are so so wrong, a good honest Insurer will look after your interests, unfortunately it is the "staged accident crooks" that influence the costs.

Regarding your last comment we're discussing a cheap car, not a major incident, but taking your point objectively, we all understand that the cost claims is covered in future premiums and the industry works on a cost plus model - somewhat of a luxury for most industries so no sympathy here.
Really, if you just keep increasing costs you have no customers and then you go out of business.

Andy,
No, legally the other party is only liable for the value of your loss ie the value of the car plus costs so you cannot insist that they fix it if the repair is more than its value.

[Simon_P]

They are there to exist

What? How charitable! That's not what they tell shareholders. Are you telling me that Admiral aren't a real insurer?
I'm afraid after that statement I lost interest. You clearly don't occupy the arena of insurance for cheap cars, where the vehicle and hence the customer, is a minor part of the cost.

[lotusles]

They are there to exist

What? How charitable! That's not what they tell shareholders. Are you telling me that Admiral aren't a real insurer?
I'm afraid after that statement I lost interest. You clearly don't occupy the arena of insurance for cheap cars, where the vehicle and hence the customer, is a minor part of the cost.

You clearly have no idea about business or insurers. I will not comment on a named insurer and lets be honest if everybody regardless of businesses has the same principles then you go elsewhere.
With insurance if you have had a bad experience but you have probably more avenues to seek recommence than most other organisations.
If your accusation that your vehicle was sold at auction before the insurer took title then you have a genuine case.
If you need the contact details for the FCA then please let me know.

It would be interesting for all of us on here to hear what business you are involved in, we may also have some comments on a good or bad experience, because what you are suggesting is that one bad meal in a restaurant relates to every restaurant

Quite happy to accept a PM

[Simon_P]

I merely answered my views on the op's original question. It seems that you don't like them. You clearly don't like my experience of the insurance industry and I didn't come here to discuss my answers to the original post with you.

"They are there to exist" is the only lesson in business I need from you - Not one I've read in HBR.

I have no need for the FCA, and no intention of sending you a PM. I have spoken with plenty of people with a similar experience you, aren't going to convince me that chap car insurers have my best interests at heart.