Car write off, rubbish settlement offer.

[Its WAR]

Because the insurers insist of using brand new parts at dealers full price, my car costs £2800 to repair (new bonnet, bumper and light clusters). They have written it off and I have been offered £2500 cash settlement less my £600 excess. I am left with £1900.

 

In other words its only a write off because they want to fit new parts to an old car.The thing is, the parts are available on ebay for around £300. Whats worse is it was only a 15 mph drive into the back of a slow moving vehicle which suffered no apparent damage.

 

I dont mind the offer, but they want my car as well. They will sell it to a salvage operator who (and any garage can easily fit) replacement parts at virtually no labour cost to themselves during quiet moments and then sell the car on. Apparently they will offer it at auction and might not bother even to replace the parts.

 

Its a top spec 9 year old Honda CRX del sol 2 seater with electric roof, leather seats air con with 87,000 miles. I have owned it since new and it is otherwise perfect.

 

Can I ask the insurers to tell me how much they will get from the salvage operator and then offer them a bit more in order to keep my car? Can I deal with the salvage company direct? or at least be notified of the location of the auction? Is it likely to be sold off locally?

 

How should I best negotiate the settlement?

[Bernie_the_Bolt]

There is absolutely nothing to stop you writing back and saying that you disagree with their pre-accident valuation of the vehicle but that you will accept their settlement offer provided they agree to your retaining ownership of the vehicle and having it repaired yourself.

[GuidoT]

As a general rule never take the first offer from anyone, in particular insurance firms. The first offer is not often your best one.

 

They are usually willing to negotiate. Explain your position to them, they are usually amenable.

 

Although you may well have done so, check the book prices from Glass', Parker's or similar and see if that helps with your negotiations. This can be done on line.

[Darkangelsdelite]

 

Can I ask the insurers to tell me how much they will get from the salvage operator and then offer them a bit more in order to keep my car?

 

 

Yes you can. The insurer will pay you the "salvage cost" for the car, and let you keep the car so if you want to repair it yourself, you can.

 

 

One thing you need to be aware of though is that this car is technically still a total loss therefore you will need to have an independent engineers report carried out on it after the repairs are finished and also send proof to your insurers before they will offer you cover on the car again.

 

 

DA

[Its WAR]

The insurannce company wont discuss with me whether they will sell the car back to me. It appears they have a contract with a salvage company who pay them a percentage of the pre accident value of the car. Then it goes into an internet auction.

 

I bet they only pay 10% to my insurers. How do I find out, so that I can offer them more?

[Chesterexpress]

They don't have to tell you anything.

[Its WAR]

Insurance company have now said they cannot sell me my car or reduce the settlement so I can keep the car. I quote:

 

"The reason we do not sell vehicle to previous owners is we need to protect our business in respect to current disposal legislation and the only way we can do this is to dispose of the vehicle to a registered salvage company, if you wish to ensure you retain the vehicle you may withdraw your claim, in which case we will no longer have an interest in the vehicle."

I say. DONT BUY SWIFT COVER.

[GoldyR]

Am I missing the point here? The ONLY reason the car is a write off is because the insurers say it will cost more than the market value of the car, to repair it. Presumably they have established this by sending it to one of their approved repairers for assessment? Why don't you say to them that you are getting an assessment from a garage of your choice, & if the estimate for repair comes in at less than the market value, they should let you have it repaired & send them the bill! This way it costs them less too! There is no reason why they shouldn't let you do this - especially as it was only minor dmg.

[Darkangelsdelite]

Only issue with that is most insurers have guaranteed service standards in that if they use their recommended repairer, the customer usually gets a guarantee on the parts of around 5 years. If he decides to use his own repair company, they may not have the same guarantees so the insurers may not allow them to be used.

 

Worth a shot though.

 

 

DA

[Its WAR]

The preferred repairer will give the insurance company a big discount. Thats why they are preferred. The thing is its easy to inflate the bill and then give a discount. the preferreed garage quoted £2800 to repair. The Honda garage gave me a rough guide of £1800 (still using new parts).

[GoldyR]

Yes, the preferred supplier will give the insurer a discount, & insurers prefer you to use their suppliers for this reason, but you do not HAVE to. Most garages, whether they are insurer preferred or your personal preference, will offer a guarantee on works &/or parts. I smashed up my Mazda earlier this year & there was no way I was going to the insurers repairer as my car was under warranty & needed to be repaired at a Mazda garage to enable the validity of the warranty. You have every right to get your own quote for repair, don't let the insurers tell you otherwise as this is incorrect. If in doubt, contact the Financial Ombudsman Service for free impartial advice 0845 080 1800.

[Its WAR]

If I go elsewhere there is a penalty. I can buy a whole car on ebay for £1500 and get all the bits I need, but then getting the right colour is a different matter. So what I really want is a cash settlement and keep my car. Current disposal regulations forbid them to let me keep the car?????????

[GoldyR]

I've never heard of an insurer charging any kind of penalty if you want to use your own repairer, are you sure about that??? And again, if they do deem your car to be a total loss, they should offer you the opportunity to buy the car back as salvage...do you know what category they've placed on the car? Certainy category total losses can be bought back as salvage, & others can't. If you do buy it back as salvage & have it repaired, the insurer will require a fresh MOT cert before insuring it again, but that's just common sense! I do suggest you speak to the FOS though as I believe your insurers are advising you incorrectly & this is making it hard for you to understand what your rights are.

[Its WAR]

The penalty is in the form of a reduced settlement (I guess by the amount of discount their preferred repairer would give). So if they get 25% discount (£700), and my repairer would only charge £2300, I would still be £200 worse off.

 

Anyway, they still wont sell me the car direct.

[Bernie_the_Bolt]

Ask them to send you the disposal regulations to which they refer.

[Its WAR]

They have now asked me to prove my valuation of £3495 by sending them three adverts listing the vehicle. I have sent them three from Autotrader on line. Lets see if they increase their £2500 offer by an extra £1000. The thing is, if the car is worth £3500 and the repair bill remains at £2800, then maybe its not a financial write off and will now be cheaper to repair than replace. Maybe they will agree to repair it afterall. We'll see.

[Its WAR]

Letter today from insurance co. They refuse to increase their offer. I have therefore sent a complaint to the Financial Services Ombudsman and issued the insurance company with a 14 day Letter Before action.

[GoldyR]

What reasons did they give you for refusing to increase their offer? I presume the examples you sent them were on a like for like basis with your vehicle? i.e same age, same mileage, same condition etc etc?? You've done right to approach the FOS, remember, it costs the insurer approx £750 for the FOS to review your file, so it would probably make better business sense just to settle with you!

[Its WAR]

They gave no reason, they just said it was their full and final offer. I didnt know the FOS charged them, that serves then right.

[Its WAR]

Insurance company have ignored my 14 day letter before action, where I advised them I would issue a summons today. I am now about to issue the summons but have noticed that the insurance company participate in the voluntary Jurisdiction of the Financial Ombudsman Service. Does that mean that the County Court is not the right forum to use for my claim? I have already made a complaint to the FOS and received their template reply letter that they are inundated with work and will reply when they can.

[Its WAR]

I have just checked the policy wording and found that the insuarnce company will not pay any liability, loss, damage, cost or expense caused by a driver who has had insurance cancelled.

 

The term driver is not defined. The driver was my son. I however, have had a policy cancelled. Does that mean I am not covered this time? My cancellation was caused by paying for insurance by credit card, but the insurers simply not processing the payment for 6 months. So they cancelled the policy. I then took out a new policy from them straight away. So they are aware that they have previously cancelled a policy.

 

If I am still covered because its only not covered if the driver has had a cancelled policy, will I be covered if I have an accident when I am the driver?

[GoldyR]

What they mean by 'cancelled' in this context is where an insurer has cancelled a policy due to submission of a fraudulent claim or fraudulent activity on the policy etc etc... It just means that if you don't disclose at the inception of the policy that you have had a policy cancelled by another insurer, they may not pay a claim if the non-disclosure is discovered. The best thing to do in situations like this is ring them up, tell them your concern, ask for their reassurance, take the full name of the person you spoke to, the time & date & if you have any problems in the future (highly unlikely) then you will have this to prove you queried it.

 

How if the total loss claim coming along? Have you pushed it with the FOS? Court action is not really appropriate in this situation, the FOS should be able to sort it amicably for you.

[Its WAR]

Thanks Goldy, I thought that was the case. I still dont know whether to sue or just wait for the FOS. I suppose if I wait for the FOS , I can always sue afterwards if I am unhappy with their decision.

[Its WAR]

I have just received this from the insurance company:

 

I’m writing to confirm our final stance on the valuation of your vehicle.

Having reviewed your file with our Managing Director, who is a qualified engineer we are happy to increase our offer to £2,900 less your policy excess of £600 leaving a net figure of £2,300. Where applicable we will deduct any remaining premiums for the policy year.

We note your intention to take legal action against us and to refer you claim to the Financial Ombudsman Service, I feel I should make you aware taking up both courses of action could prejudice your case with the Financial Ombudsman Service or the courts and would advise you to contact the Financial Ombudsman Service for more information regarding this.

Notwithstanding this we are more than happy to make you a without prejudice interim payment of the above amount upon receipt of the required documentation.

..................

So, they have upped the offer by £400, but its still £600 short of market value. Interseting that they have pointed out that issueing a county court summons and a FOS claim could be frowned upon. The question now is , should I accept the interim payment and then wait for the FOS to make a judgement? Or should I refuse the interim payment and wait for the FOS? The thing is, if I except (without prejudice of course) I will have allowed them to take away my car and will then only be arguing the balance of the claim. This will give me time to buy back my car at auction though. Best advice would be welcome. I havent yet issued the summons with the County Court.

[GoldyR]

Have you told your insurance company that you wish to retain the salvage of your vehicle (keep your vehicle)? If so, the total loss settlement offer would be less the salvage value of your vehicle (usually a few hundred pounds) - you shouldn't have to 'buy your vehicle back at auction'. Therefore you should get to keep your vehicle & receive a chq for the total loss value net the excess & salvage value of the car. Once you have had the vehicle restored to a roadworthy condition, you will have to have another MOT done before the insurer will insure the vehicle again. Not sure if you have had these discussions with the insurer?

 

There is nothing wrong with accepting an 'interim' payment, & if I were you, I would write back to them clearly stating that you are happy to accept their chq as an interim payment ONLY, & that you still think it falls short of the market value & are therefore still referring the matter to the FOS.

 

I think what they mean in their letter, is that it is frowned upon to refer to the FOS & take them to court at the same time, the FOS may not look on your case too favourably if you were to do both. They should certainly not be discouraging their customers to approach the FOS, I think the FOS would be very interested to hear that they are doing this!!!