Why did a minor repair to a Caterham that I hit with my Volvo V40 cost over £20,000?

My Volvo V40 2001 is due for insurance renewal and like any wise fellow I checked first on price comparison websites. But as I had reversed over a Caterham last June in a petrol station (easily done) I needed to ascertain the cost of the claim to get a full quote. I rang the AA who I’m with and explained that I was shopping around and could he let me know the cost of that claim. Yes he could, and after ringing their ABC Insurance he came back with the amazing fact that the claim had been £21,000 and that it had not been personal injury. I had simply grazed the Caterham’s nosecone that left no damage to my car at all.

This doesn’t appear to affect my insurance this year as I’ve managed to reinsure with the AA for a mere £26 increase. I am not privy to the details of the claim but it seems outrageous that any person could claim such a hideous amount and I wasn’t even asked details of my side of the accident. Is this part of the story of rocketing premiums? Easier perhaps just to pay rather than investigate.

Asked on 5 March 2011 by PW, Gomshall, Surrey

Answered by Honest John

What will have happened is an 'accident management' specialist stepped in and, while a repair costing maybe £5,000 was carried out to the Caterham, it put the owner in an equivalent 'credit hire car' at a cost of £16,000. That is the main reason for rocketing insurance premiums.

Be aware that you need to check insurance price comparison websites against each other as some are merely brokers posing as price comparison websites. Such brokers are quite likely to sell details of any claim you may be involved in to ‘accident management companies’ and credit hire operators.

Tags: insurance credit hire accident management repairs claims

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