Insurance claim settlement valuation
Discussion
In discussing the settlement with my insurers for a recent accident in which the car was declared a right off, I have been made an offer.
They say that they will offer £x but based on my evidence this is still below comparable second hand vehicles and all the guide prices in the various sources.
Their reasoning is that to offer more would put me in a better position, and this is based on the fact that I paid a very good low price I paid for the car.
This seems to be penalising me for having been fortunate to stumble on a seller who wanted a very quick sale as he was emigrating. Nor does it take into account the 4 new tyres on the car just a week before...
Has anyone got any view on the fairness of their argument or successfully argued for a better settlement?
What would happen if the car was a gift???
They say that they will offer £x but based on my evidence this is still below comparable second hand vehicles and all the guide prices in the various sources.
Their reasoning is that to offer more would put me in a better position, and this is based on the fact that I paid a very good low price I paid for the car.
This seems to be penalising me for having been fortunate to stumble on a seller who wanted a very quick sale as he was emigrating. Nor does it take into account the 4 new tyres on the car just a week before...
Has anyone got any view on the fairness of their argument or successfully argued for a better settlement?
What would happen if the car was a gift???
Did you insure it for what you paid for it, first and foremost? Or for what it would cost to replace?
Secondly, they expect you to haggle; on a £6k car, they don't expect you to walk up to them and pay £6k. They also don't expect to have to hand over £1k more because yours had 500 miles less on it, or because you had newer tyres.
However, it should be close enough that it shouldn't be particularly detrimental. If you're looking at cars with 5mm tread, and you had 'brand new' ones on, that's close enough IMO and in the majority of reasonable people's view.
Secondly, they expect you to haggle; on a £6k car, they don't expect you to walk up to them and pay £6k. They also don't expect to have to hand over £1k more because yours had 500 miles less on it, or because you had newer tyres.
However, it should be close enough that it shouldn't be particularly detrimental. If you're looking at cars with 5mm tread, and you had 'brand new' ones on, that's close enough IMO and in the majority of reasonable people's view.
Does service history and previous owners come into consideration in these scenarios?
I.e if you had one car that had 100,000 miles with 1 owner, full service history with the book stamped the price will be a fair bit different from one at 100,000 miles with no service history and 7 owners.
I.e if you had one car that had 100,000 miles with 1 owner, full service history with the book stamped the price will be a fair bit different from one at 100,000 miles with no service history and 7 owners.
The insurance should pay out market value; so you need to compile some evidence that you need a bigger settlement in order to be able to replace the car like-for-like. I'm not sure its really relevant what you paid for it.
If you compile some evidence of other cars on the market that are directly comparable with yours then you should be able to get them to improve the offer.
If you compile some evidence of other cars on the market that are directly comparable with yours then you should be able to get them to improve the offer.
Service history affects the value of the car, number of owners less so. You should be able to replace a car that never saw a proper service with another one that's never seen a proper service. You should also be able to replace one with every main dealer stamp with another with every main dealer stamp. If you had outstanding warranty having bought from a main dealer, weight may be given to that to some extent.
You shouldn't be able to better yourself within reason; that's it. They expect you to haggle, they should not be expecting you to be able to get 20% off the screen price.
I don't understand why this is a difficult concept. Yes, I've had my car for years having paid a lot more for it than it's now worth, but I accept that I could replace it for a few grand. That mine's been well looked after doesn't really count for a lot in the grand scheme of things!
You shouldn't be able to better yourself within reason; that's it. They expect you to haggle, they should not be expecting you to be able to get 20% off the screen price.
I don't understand why this is a difficult concept. Yes, I've had my car for years having paid a lot more for it than it's now worth, but I accept that I could replace it for a few grand. That mine's been well looked after doesn't really count for a lot in the grand scheme of things!
Have a read here
http://www.financial-ombudsman.org.uk/publications...
This part seems quite relevant if they're basing the low valuation on the price you paid for the car.
We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth
OTOH you won't generally get much credit for money you've spent maintaining the car (eg buying new tyres). Any car of a certain age is going to have had a fair amount of money spent in maintaining it over the years and will have some new or nearly new parts - that's already taken into account in the valuation.
http://www.financial-ombudsman.org.uk/publications...
This part seems quite relevant if they're basing the low valuation on the price you paid for the car.
We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth
OTOH you won't generally get much credit for money you've spent maintaining the car (eg buying new tyres). Any car of a certain age is going to have had a fair amount of money spent in maintaining it over the years and will have some new or nearly new parts - that's already taken into account in the valuation.
Edited by Aretnap on Thursday 31st July 12:49
wibblebrain said:
The insurance should pay out market value; so you need to compile some evidence that you need a bigger settlement in order to be able to replace the car like-for-like. I'm not sure its really relevant what you paid for it.
It's of relevance if you paid £5k for it, insured it for £5k and then are kicking up stink that it'd cost you £6k to replace it. You under-insured; tough s
t.If however you paid £5k, insured for £6k knowing that you got a one-time or rare deal, or there were other considerations, you should be in the position that allows you to buy a replacement.
Randomthoughts said:
It's of relevance if you paid £5k for it, insured it for £5k and then are kicking up stink that it'd cost you £6k to replace it. You under-insured; tough st.
If however you paid £5k, insured for £6k knowing that you got a one-time or rare deal, or there were other considerations, you should be in the position that allows you to buy a replacement.
If he insured it for 5K on an agreed value policy then I would agree with you, but he insured it on a market value policy. The insurance co. will not pay 10K if you said it was worth 10K when you started the policy and market value is only 6K.t.If however you paid £5k, insured for £6k knowing that you got a one-time or rare deal, or there were other considerations, you should be in the position that allows you to buy a replacement.
MrPicky said:
If he insured it for 5K on an agreed value policy then I would agree with you, but he insured it on a market value policy. The insurance co. will not pay 10K if you said it was worth 10K when you started the policy and market value is only 6K.
But if you under-insure it then try to claim more then you're venturing into a risk that they may not have agreed to; you told them your car was £10k worth, you can't then say you need £15k to replace it - the risk they took on was a £10k car.Randomthoughts said:
MrPicky said:
If he insured it for 5K on an agreed value policy then I would agree with you, but he insured it on a market value policy. The insurance co. will not pay 10K if you said it was worth 10K when you started the policy and market value is only 6K.
But if you under-insure it then try to claim more then you're venturing into a risk that they may not have agreed to; you told them your car was £10k worth, you can't then say you need £15k to replace it - the risk they took on was a £10k car.See the link I posted above - the ombudsman's view is that the insurer should pay the full market value even if the customer underestimated the value when filling in the application. At least in the case where the customer inadvertently underestimates the value - it might be different if you deliberately gave an unrealistically low value to get a cheaper quote, but if the value you provided is only slightly below the market value it would be difficult to prove that you deliberately underestimated it, and if there was a big discrepancy (new BMW valued at £5K?) the insurer should really have picked up on it anyway.
This type of thread should be a sticky as it crops up too regularly.
The valuation will be based on the average of the three trade guides as per the FCA guidance and embedded by the FOS. Undervaluing your car is no big deal. Values can rise anyway. As long as you've not taken the piss then it won't matter at all to what's being offered.
The valuation will be based on the average of the three trade guides as per the FCA guidance and embedded by the FOS. Undervaluing your car is no big deal. Values can rise anyway. As long as you've not taken the piss then it won't matter at all to what's being offered.
I do agree that this should be a sticky!
I always thought that the insurance would replace my car at its market value as of the time just before the accident. We are in negotiation at the moment.
Thx for the input to this topic.
I was asked what I insured for. It was not agreed value and was asked the estimated market value and that was in the box with the following info..
" Please note that the value you quote is not necessarily the amount of pay-out you will receive in the event of a claim. We will determine the exact market value of your vehicle in the event of a claim. "
They didn't quote a figure on the policy documents. In any event, I am insuring for replacement of the vehicle with like for like if possible. It is not related to what I paid for said car.
I have compiled evidence re equivalent cars on the market.
As an aside, I live in a road that every winter floods to 1 metre at one point. Guess what, I see brand new cars pass police road closed signs and barriers then drive into the water and get dragged out. I have seen many brand new Astons, Jags, Mercs etc up to the door handles!
Do they get paid out having caused the total loss and retain NCB! I would love to know what investigations insurers do to acertain the circumstances. Do insurers pay the new car cost or do they treat it as replacing with a pre-owned car? Rant over.
I always thought that the insurance would replace my car at its market value as of the time just before the accident. We are in negotiation at the moment.
Thx for the input to this topic.
I was asked what I insured for. It was not agreed value and was asked the estimated market value and that was in the box with the following info..
" Please note that the value you quote is not necessarily the amount of pay-out you will receive in the event of a claim. We will determine the exact market value of your vehicle in the event of a claim. "
They didn't quote a figure on the policy documents. In any event, I am insuring for replacement of the vehicle with like for like if possible. It is not related to what I paid for said car.
I have compiled evidence re equivalent cars on the market.
As an aside, I live in a road that every winter floods to 1 metre at one point. Guess what, I see brand new cars pass police road closed signs and barriers then drive into the water and get dragged out. I have seen many brand new Astons, Jags, Mercs etc up to the door handles!
Do they get paid out having caused the total loss and retain NCB! I would love to know what investigations insurers do to acertain the circumstances. Do insurers pay the new car cost or do they treat it as replacing with a pre-owned car? Rant over.
Yes they will be replaced by their insurer. If the car is less than a year old then broadly speaking it will be with a brand new car. They will lose NCD unless protected. NCD is only reinstated if there is someone to recover outlay from
Have a read of this, in particular points 5 & 8
http://www.financial-ombudsman.org.uk/publications...
Have a read of this, in particular points 5 & 8
http://www.financial-ombudsman.org.uk/publications...
Earlier this year my insurer valued my car at £4400 when I paid £7000 for it last year.
The cheapest example I could find was £8000 between auto trader and pistonheads so sent over every example and they then fixed it and returned it instead if writing it off.
I assume if you can prove it is worth more they will listen, if you 'think' it is worth more they wont.
The cheapest example I could find was £8000 between auto trader and pistonheads so sent over every example and they then fixed it and returned it instead if writing it off.
I assume if you can prove it is worth more they will listen, if you 'think' it is worth more they wont.
LoonR1 said:
The Moose said:
What happens if a car increases in value and is then written off (on a market-value policy)?
It's paid out at market value, I thought I'd already said that earlier. Don't worry Loony. Not everyone is out to get you
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