Car Insurance Claims - How does 'Writing Off' work?
Discussion
If a car has a minor accident and goes to the insurer for repair I gather that they will do an assessment of the value of the car vs. the cost of the work required to mend it.
They will then decide to either pay to have the car mended, or give the owner a cheque for the 'pre crash' value of the car, less the policy excess, so they can go and buy a replacement.
I also know that insurers rarely (if ever) place any value on improvements to a car, or recent maintainence (e.g. recent replacement of an expensive consumable item) but the owner of the car probably would do. So there may be a circumstance where the insurers decide to write the car off an pay out the cheque for a replacement car, but the owner would actually like to buy the wreck back and mend it themselves. (Possibly will leave some money left over from the insurance payout, but will possibly cost them a bit more that they might need to top-up the repair costs?)
Questions then:
1 Have I got the above outline right, if not where's my understanding lacking?
2 Will the insurance company literally check if the repair cost at retail value exceeds the pre crash value of the car? Do they estimate the cost to mend at retail or trade, and do they have a cutoff percentage (i.e. not necessarily 100%) where they might say 'repair costs would be over 90% of the value of the write off cheque, so may as well write it off, since they fix the cost then (instead of having a repair cost that may increase) and they can also sell some/all of the wreck to recoup more money?
3 I may be about to go through a process like this, so any/all advice welcome.
Cheers
They will then decide to either pay to have the car mended, or give the owner a cheque for the 'pre crash' value of the car, less the policy excess, so they can go and buy a replacement.
I also know that insurers rarely (if ever) place any value on improvements to a car, or recent maintainence (e.g. recent replacement of an expensive consumable item) but the owner of the car probably would do. So there may be a circumstance where the insurers decide to write the car off an pay out the cheque for a replacement car, but the owner would actually like to buy the wreck back and mend it themselves. (Possibly will leave some money left over from the insurance payout, but will possibly cost them a bit more that they might need to top-up the repair costs?)
Questions then:
1 Have I got the above outline right, if not where's my understanding lacking?
2 Will the insurance company literally check if the repair cost at retail value exceeds the pre crash value of the car? Do they estimate the cost to mend at retail or trade, and do they have a cutoff percentage (i.e. not necessarily 100%) where they might say 'repair costs would be over 90% of the value of the write off cheque, so may as well write it off, since they fix the cost then (instead of having a repair cost that may increase) and they can also sell some/all of the wreck to recoup more money?
3 I may be about to go through a process like this, so any/all advice welcome.
Cheers
As I understand it:
1) Yes, that's about right. Although they should pay out the cost of replacing the car as it was, improvements and all as modifications were declared on the insurance, of course. You'll almost certainly have to argue, though.
2) Yes and at whatever rate they would end up paying, but it's not just the cost of repairs as such, things like courtesy cars can push it over the limit on their own. The cut-off is below 100%, but not massively so.
3) Don't accept their first offer, you can (and will probably have to) haggle. If they can't demonstrate that you can replace the car with like for the money they are offering, they should offer more. Challenge them to find an actual car of the same specs, condition and mileage for the money they are offering, etc.
1) Yes, that's about right. Although they should pay out the cost of replacing the car as it was, improvements and all as modifications were declared on the insurance, of course. You'll almost certainly have to argue, though.
2) Yes and at whatever rate they would end up paying, but it's not just the cost of repairs as such, things like courtesy cars can push it over the limit on their own. The cut-off is below 100%, but not massively so.
3) Don't accept their first offer, you can (and will probably have to) haggle. If they can't demonstrate that you can replace the car with like for the money they are offering, they should offer more. Challenge them to find an actual car of the same specs, condition and mileage for the money they are offering, etc.
kambites said:
As I understand it:
1) Yes, that's about right. Although they should pay out the cost of replacing the car as it was, improvements and all as modifications were declared on the insurance, of course. You'll almost certainly have to argue, though.
Yes, although make sure you are not trying to double-bubble any maintenance work. "I just spent a grand on new tyres" AND "It is in A1 condition" (and thus should have had new tyres anyway) is a common source of angst.1) Yes, that's about right. Although they should pay out the cost of replacing the car as it was, improvements and all as modifications were declared on the insurance, of course. You'll almost certainly have to argue, though.
kambites said:
2) Yes and at whatever rate they would end up paying, but it's not just the cost of repairs as such, things like courtesy cars can push it over the limit on their own. The cut-off is below 100%, but not massively so.
Somewhere about 60-70% of pre-accident value depending on age of vehicle etc.kambites said:
3) Don't accept their first offer, you can (and will probably have to) haggle. If they can't demonstrate that you can replace the car with like for the money they are offering, they should offer more. Challenge them to find an actual car of the same specs, condition and mileage for the money they are offering, etc.
Then again, you might not. Work out what you can realistically (given haggling with any seller) buy something similar for and go from there.Noger said:
Then again, you might not. Work out what you can realistically (given haggling with any seller) buy something similar for and go from there.
Yes, I didn't mean to say you must haggle, just that in my experience their first offer is very often not realistic. I do know one person who was given a very generous first offer, but all the others that I've seen have been well below market value. Gassing Station | General Gassing | Top of Page | What's New | My Stuff