What is third party insurers legally obligated to pay
Discussion
The third party insurers have accepted full liability for a vehicle accident and from my research they are obligated to pay for all my losses (in this case just vehicle damage) up to the pre accident value of the vehicle.
I am not claiming with my insurers so as I'm not in a contract with the third party insurers,I have not given them the right to write my car off.
They have put a value on my vehicle lower than the repair quote and now they want to write my vehicle off on economic grounds and pay me considerably less than the cost of the damage or the pre accident value.
I have not been able to find any details of legislation which automatically gives this right to a third party.
I am not claiming with my insurers so as I'm not in a contract with the third party insurers,I have not given them the right to write my car off.
They have put a value on my vehicle lower than the repair quote and now they want to write my vehicle off on economic grounds and pay me considerably less than the cost of the damage or the pre accident value.
I have not been able to find any details of legislation which automatically gives this right to a third party.
It's not a matter of legislation. How compensation for property damage is assessed is still mostly a matter of common law (ie case law). In the case of damage to a chattel (such as a car) the amount you're entitled to is measured as the loss in value that your property suffered. In other words, the difference between what you could have sold you car for five minutes before the accident and what you could have sold it for five minutes after the accident.
The cost of repairs is strictly speaking only relevant because in most cases the courts will accept it as a reasonable measure of that loss in value - in other words they will make the assumption that a £10000 car which needs £2000 of repairs would sell for about £8000. (How accurate this assumption is is certainly questionable, but it does make life a lot simpler). But obviously the loss in value can never be greater than the pre accident value of the vehicle, so you can never claim more than the pre-accident value in repair costs.
Working out the pre-accident value is not an exact science. If you think that they have under-valued it you can argue the point. But ultimately when dealing with a third party insurer if you can't come to an agreement with them the only way to force them to pay is to take them (or the driver, who is ultimately responsible) to court. Whereas if you claim through your own insurer and you don't like the value that they offer you, you have the option of using the insurer's complaints process followed by the Financial Ombudsman, which is free (to you).
The cost of repairs is strictly speaking only relevant because in most cases the courts will accept it as a reasonable measure of that loss in value - in other words they will make the assumption that a £10000 car which needs £2000 of repairs would sell for about £8000. (How accurate this assumption is is certainly questionable, but it does make life a lot simpler). But obviously the loss in value can never be greater than the pre accident value of the vehicle, so you can never claim more than the pre-accident value in repair costs.
Working out the pre-accident value is not an exact science. If you think that they have under-valued it you can argue the point. But ultimately when dealing with a third party insurer if you can't come to an agreement with them the only way to force them to pay is to take them (or the driver, who is ultimately responsible) to court. Whereas if you claim through your own insurer and you don't like the value that they offer you, you have the option of using the insurer's complaints process followed by the Financial Ombudsman, which is free (to you).
Whatever the court tells them.
At the moment its a negotiation between you and them - they can offer whatever they like and you can counter with whatever you like; Either you reach an agreement or go to court.
However if you refuse a reasonable offer before going to court, you could end up liable for (significant) legal fees for the other side if the final outcome is less (The system is designed to encourage negotiation before using expensive/limited court time)
And there are costs involved in taking the other party to court (technically claim is against other driver, not insurer even if the insurer is the one defending it).
edit:
Of course they are likely to start with a lowball offer where they think they can; at the end of the day there goal is to minimise the payout. So you are going to have to negotiate with evidence (e.g. autotrader adverts/sale prices)
At the moment its a negotiation between you and them - they can offer whatever they like and you can counter with whatever you like; Either you reach an agreement or go to court.
However if you refuse a reasonable offer before going to court, you could end up liable for (significant) legal fees for the other side if the final outcome is less (The system is designed to encourage negotiation before using expensive/limited court time)
And there are costs involved in taking the other party to court (technically claim is against other driver, not insurer even if the insurer is the one defending it).
edit:
Of course they are likely to start with a lowball offer where they think they can; at the end of the day there goal is to minimise the payout. So you are going to have to negotiate with evidence (e.g. autotrader adverts/sale prices)
Edited by qwerty360 on Saturday 18th January 20:46
Historically, payout seems to have been somewhat more closely linked to 'trade in value' than 'forecourt sticker price'?
Don't forget to add in any reasonable costs like losing a day's work, hire car or whatever.
A few people I have known have done OK by presenting a 'reasonable' well-evidenced claim backed up by private sale ads for similar vehicles.
You sometimes have to accept it's going to cost you, but you end up with a better car. Your 10 year old car gets written off, you replace it with a 6 year old one, the accident has forced you to bring forward what you'd have spent in a year or two.It's annoying when your wrecked car was a worthless pile, but you were happy with it.
Don't forget to add in any reasonable costs like losing a day's work, hire car or whatever.
A few people I have known have done OK by presenting a 'reasonable' well-evidenced claim backed up by private sale ads for similar vehicles.
You sometimes have to accept it's going to cost you, but you end up with a better car. Your 10 year old car gets written off, you replace it with a 6 year old one, the accident has forced you to bring forward what you'd have spent in a year or two.It's annoying when your wrecked car was a worthless pile, but you were happy with it.
rob07 said:
The third party insurers have accepted the repair costs at £22,000 and they put a pre accident valuation of £20,000 on my car. But as they want to write it off they are only offering £13,500. I say they have no authority to write it off and should pay out £20,000.
Are you sure? If they put a pre accident value on your vehicle of £20K, that's what they should be offering. Are you sure it's not £13,500 with you to keep the vehicle (salvage)?You need to speak to someone there and ask them to explain their thinking.
Since you are not claiming through your own insurer, you are not bound by any policy terms that would allow them to declare your vehicle a total loss.
The third-party insurer is responsible for compensating you for all reasonable losses arising from their policyholder’s negligence. This includes either paying for the full repair costs or reimbursing you for the vehicle's pre-accident market value (PAV).
Since you are not their policyholder, they cannot impose their insurer’s economic write-off decision on you unless you agree to it. There is no legislation that gives them an automatic right to write off your car against your wishes.
Under English contract and tort law (specifically negligence), the principle of indemnity applies. This means the responsible party (via their insurer) must restore you to your pre-accident position as far as money can do so.
Courts have generally held that a third-party insurer cannot enforce an economic write-off unless it is unreasonable to repair the vehicle (e.g., repair costs far exceed PAV, making it disproportionate).
Challenging their decision and request a detailed breakdown of their valuation.
Provide your own evidence (such as independent repair quotes and recent market valuations from sources like AutoTrader, Glass’s Guide, and CAP HPI).
If they insist on writing off your vehicle, you could demand payment of the full PAV plus salvage processing.
The third-party insurer is responsible for compensating you for all reasonable losses arising from their policyholder’s negligence. This includes either paying for the full repair costs or reimbursing you for the vehicle's pre-accident market value (PAV).
Since you are not their policyholder, they cannot impose their insurer’s economic write-off decision on you unless you agree to it. There is no legislation that gives them an automatic right to write off your car against your wishes.
Under English contract and tort law (specifically negligence), the principle of indemnity applies. This means the responsible party (via their insurer) must restore you to your pre-accident position as far as money can do so.
Courts have generally held that a third-party insurer cannot enforce an economic write-off unless it is unreasonable to repair the vehicle (e.g., repair costs far exceed PAV, making it disproportionate).
Challenging their decision and request a detailed breakdown of their valuation.
Provide your own evidence (such as independent repair quotes and recent market valuations from sources like AutoTrader, Glass’s Guide, and CAP HPI).
If they insist on writing off your vehicle, you could demand payment of the full PAV plus salvage processing.
rob07 said:
Yes it's with me keeping my own vehicle. But the £13,500 is way below the cost to return my vehicle to pre accident condition,and I should not be at a loss. As I said before who has given them the right to write my vehicle off.
The cost of returning the vehicle to its pre-accident condition is irrelevant. If they valued your vehicle at £20,000 pre-acccident but they're offering you £13,500, it's because they think the car that you're keeping is worth £6,500. Does that sound about right as a salvage value?As I said earlier that's what they owe you - the difference between what you could have sold your car for before the accident, and what you could sell it for now. You could ask them to take the car away and pay you the full £20,000 if you'd prefer that - they don't actually have to offer you that alternative but they might be happy to buy the salvage of you.
You say the ins co value the car at £20,000 and they say it'll cost £22,000 to repair it.
No ins co is going to pay out more than the vehicle is worth.
How much do you say it's worth?
What have your own insurance co put the value at?
As it stands it looks like you have a choice, £20,000 or £13,500 +car.
You might get a better offer from your own ins co. (But they are not going to pay out more than they can reasonably expect to claim back from the 3rd party insurers).
No ins co is going to pay out more than the vehicle is worth.
How much do you say it's worth?
What have your own insurance co put the value at?
As it stands it looks like you have a choice, £20,000 or £13,500 +car.
You might get a better offer from your own ins co. (But they are not going to pay out more than they can reasonably expect to claim back from the 3rd party insurers).
Doesn't work like that OP, pre-crash the asset value was 20,000. That;s what they need to leave you with, assets worth 20k, whether that is as 20k cash or 13.5k cash + 6.5 worth of crashed motor then thats what they have to leave you with.
If you insist you want the car repaired (costing 22k) then you need to find the difference between 22k and 13.5k yourself (8.5k).
Not sure I'd want to be dirving around in a car worth 20k that has had 22k worth of repairs either - also pretty sure the resale value will be worthless.
If you insist you want the car repaired (costing 22k) then you need to find the difference between 22k and 13.5k yourself (8.5k).
Not sure I'd want to be dirving around in a car worth 20k that has had 22k worth of repairs either - also pretty sure the resale value will be worthless.
Edited by eldrich on Sunday 19th January 00:41
rob07 said:
Yes they say the salvage value is about £6,500.
But I want to keep my car and have it repaired to pre accident.
There is absolutely no way I am having it scrapped or sold off.
What you want and what you can have are two different things I'm afraid. But I want to keep my car and have it repaired to pre accident.
There is absolutely no way I am having it scrapped or sold off.
You don't have a right to claim the full pre-accident value of £20,000 AND keep the damaged car which is worth about £6,500. That would leave you with £26,500, which is significantly more than the value of your car was in the first place.
You can argue about exactly what the pre-accident value was, and about what the car is worth in salvage now, but you can't argue with the principle that the difference between the two figures is what the insurer owes you in these circumstances.
MOMACC said:
Muppet
Use your own insurers who you have a legal contract with.
It's becoming a daily post on here folk not using their own insurer to support claims.
It is what you bloody pay for.
Conversely there are also many posts advising people not to use their own insurer where blame has been accepted by the TP, as they can get a better deal dealing direct with the TP insurer.Use your own insurers who you have a legal contract with.
It's becoming a daily post on here folk not using their own insurer to support claims.
It is what you bloody pay for.
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