Hi folks,
My wife has had her car written off following an accident (which wasn't her fault) and we believe our insurance company is trying to short change us on the current 'market value'. We would really be grateful for any advice to help obtain the 'market value' from them.
Brief facts:
- Insurance company is a leading national company in the car insurance market and the policy is a fully comprehensive one. We also have paid for legal cover with the policy.
- The Policy states "The most we will pay is the market value of your car at the time of the loss".
- Car purchased in a private sale in Nov 07 for £3300. In the past 2 months the car has done an additional 1000 miles.
- Insurance company is now offering £2700 as market value in full setllement. (£2450 after deduction of the policy excess)
- Insurance company is not willing to disclose how they arrived at the £2700.
- They want me to prove, by providing adverts from local papers, Auto trader etc. that the current market value is higher. They say they will only accept private sale adverts not trade adverts as I purchased the car in a private sale. As the car is a a rare model I am unable to find such adverts.
- According to www.parkers.co.uk, the current indicative values for this car with a similar mileage is as under (I paid £3 to obtain this):
Franchised dealer: £3255
Independent Dealer: £3030
Private - Good condition: £2905
Part Exchange: £2595
(Note: Our car was in pristine condition)
- I have asked them to offer £3,200 but they are refusing.
a. The Insurance co is refusing to accept Dealer based prices - they are insisting that since last time I purchased in a private sale they will will only offer a private sale based market value. Previously we had the old car and could wait until we found the new car at the right price in a private sale. Now the replacement courtesy car offered by the insurance company is for a maximum of 2 weeks after they have made the offer. So, we need to buy a replacement urgently, probably from a dealer, and can't wait for one from a private sale to come along.
b. The Insurance company is also refusing to accept Parkers price; they are insisting on me providing adverts of private sales. Since the car we lost is a rare model/combination there are none available currently. I have checked Autotrader, Exchange & Mart, Loot, local papers, ebay etc. (Car is a Nissan Micra 1.0 Auto 5 door, very low mileage (15,000), single owner, full service history, pristine condition, top end 'SE' model).
Some questions please:
1.In the above situation, is the insurance company justified in offering me only £2700 rather than the £3200 dealer price, per Parkers, I have asked for?
2. Are they correct in insisting in offering me the private sale based price rather than a dealer based price? (As stated previously we could wait to buy from a private sale but cant do so now)
3. Are they justified in not disclosing their basis / sources used for the value of £2700 offered?
4. Are they justified in not accepting Parker prices and insisting that I provide current adverts of private sale prices, even though practically I can't do so as this is a rare model?
5. As this model of a car is a rare one and it looks like we may need to buy another car / model rather than wait for a similar model to become available. Will the make or model we buy ,or the price we pay for the new one we buy, or the manner in which we buy it (dealer / private) have an influence on the settlement of the current claim?
6. We will probably be spending more than £3200 for the replacement car on a different make/model. But say if we find a suitable one for cheaper, i.e. if we end up buying a different model / an older car / higher mileage car for cheaper say £2500, does this mean we lose our argument to get more than the £2700 offered? i.e Do we need to spend more than £3200 for the replacement car to be able to seek to claim £3,200?
7. If we end up buying a different make/model replacement in a private sale, do we lose our argument that we should a dealer based value for the one lost?
Apologies for the number of the questions but a few hundred pounds does make a difference in our situation. Also, apologies for the length of this posting. Just wanted to make sure I mentioned all the facts which may be relevant. Further details are below, in case they are relevant too.
We would be immensely grateful for any advice offered.
Thanks a million.
Cheers,
Andy
Further details:
- Previous car was 15+ years old was due for retirment, so after a lot of searching for a replacement, in Nov 07 we purchased a 2001 Nissan Mirca 1.0 Auto SE 5 door (SE is the top of the range in the 1.0 litre Auto 5 door models and includes additional safety features like the passenger air bag etc.). This was a 1 owner car, with full dealer service history, only 15000 genuine miles and in pristine / perfect condition. This combination is rarely available. We paid £3300 in a private sale. Similar car with a dealer would have been around £3600.
- Value recorded with insurance company at the time of the purchase: £3000. (After our first inspection I obtained the quote from the insurance company and as I was expecting to negotiate the price down I told the insurance company I expected the value to be £3000. Subsequently I could only negotiate down the purchase company to £3300. I was told by the insurance company, that the value of £3000 recorded at the time of the initial quote didnt need to be amended. They told me this value did not affect the premium or the value at the time of settlment which wouldbe the market value at the time of the loss.)
- 10 days ago, whilst doing the school run my wife met with the accident. An 18 year old man drove straight out of his home driveway into the front of her car. Luckily there were no injuries. The man hasn't admitted fault but there it is very clear that the fault is his.
- The engineer of the insurance company rang last week to say that the car is a constructive write-off and offered £2700 as replacement market value. I refused as I believe the current 'market value' is much higher. I have accepted £2700 (less
excess) as an interim payment.
- In the past two months since purchase, the car has done an additional 1000 miles - other than than it was in the same perfect condition as when purchased in Nov 07.
- I have had a look at the financial ombudsman site:
www.financial-ombudsman.org.uk/publications/ombuds...n...
and the guidance there is:
"....In most cases, the firm should have assessed the market value as equivalent to the ?guide retail price? (the price that a member of the public might reasonably expect to pay at a dealership). ..."
- The free courtesy car for 2 weeks is via my insurance company's recommended external company "Drive Assist" and I understand Drive Assist only provide one if they are convinced it is a no fault claim. (Drive Assist have guaranteed not to charge me a penny and said they will claim their rental from the third party insurance company.) Don't wish to sound too optimistic but I am 99.99% certain that it is not my wife's fault.
- The insurance company engineer did indicate that they would be claiming from the other insurance company and said that he had to 'justify' them that they did were offering me the market value and not more. The other company is also a big player in the car insurance market. Just wondering if these big players have a deal amongst themselves to make low offers to customers for mutual benefit !
- I do have legal cover. Presumably its too late to claim directly from the other company directly as I have already accepted £2700 as an interim payment from my insurance company.
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1. In the above situation, is the insurance company justified in offering me only £2700 rather than the £3200 dealer price, per Parkers, I have asked for?
Depends. Your contract is for them to pay you market value less excess in the event of a write off. They are justified in offering that if that is what the market value is. Parkers is no more than a guide of questionable accuracy.
2. Are they correct in insisting in offering me the private sale based price rather than a dealer based price? (As stated previously we could wait to buy from a private sale but cant do so now)
Pretty much, unfortunately. I can see your argument but the guideline is the value in the market in which you would normally buy a car. Unless you habitually shop at dealers and this is an exception, you are generally presumed to be comfortable and competent to buy at auction, privately or wherever else.
3. Are they justified in not disclosing their basis / sources used for the value of £2700 offered?
What sources? They can offer you £1.50 and if you think they're wrong, sue them or make a complaint to the ombudsman.
4. Are they justified in not accepting Parker prices and insisting that I provide current adverts of private sale prices, even though practically I can't do so as this is a rare model?
Sort of. I think they are justified depending on how close you can get - tinyurl.com/2uu2or shows that the only cars cheaper than their offer are demonstrably inferior to yours being older, lower spec and higher mileage. However for your offer you can get a 1.4 litre car, slightly newer, with what is still an extremely low mileage.
5. As this model of a car is a rare one and it looks like we may need to buy another car / model rather than wait for a similar model to become available. Will the make or model we buy ,or the price we pay for the new one we buy, or the manner in which we buy it (dealer / private) have an influence on the settlement of the current claim?
No, except to the extent that the insurance company can argue that your eventual choice is similar to/different from your previous car - probably not very much at all.
6. We will probably be spending more than £3200 for the replacement car on a different make/model. But say if we find a suitable one for cheaper, i.e. if we end up buying a different model / an older car / higher mileage car for cheaper say £2500, does this mean we lose our argument to get more than the £2700 offered? i.e Do we need to spend more than £3200 for the replacement car to be able to seek to claim £3,200?
I think this is the same as question 5 - no. You are entitled to take the cash as compensation and buy an L-reg Kia Pride or a brand new Mercedes A-Class with cash either way.
7. If we end up buying a different make/model replacement in a private sale, do we lose our argument that we should a dealer based value for the one lost?
See question 2.
Don't forget that you can still recover your uninsured losses from the other party in the same way that your insurer could in theory recover its own payout. This will definitely include your excess. You could put in a claim for loss of use of the car after the loss of the courtesy car - if you could show that it was reasonable to wait to buy a new car and theoretically, in the alternative, the difference between market value in your usual market (private sale) and dealer prices. It's a logical argument but I can't see anyone advising you that it would be worth legal fees to pursue.
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Surely it is the other party's insurance who should be paying out - and you should not have to pay your excess for this reason. They are meant to put you back in the same position you were in prior to the accident, wherever you bought the car.
My car had been a gift from my parents although I found and dealt with the dealer - when written off the insurance paid out the Glass guide value after a little haggling- where I got the car from never entered any discussion.
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Hi Deepwith,
To clarify, when I reported the accident my insurance company offered me 2 options -
1. claim via them for market value Less excess (and they would claim from the other company; no claims not impacted if successful) and claim for the excess portion directly using help provided by my legal policy cover. They would also arrange to collect the car, determine repairability etc.
2. Claim directly from the other company for the full amount.
I decided to choose option 1 as it seemed less hassle/risk. Didnt realise then that I would have less negotiating power.
Thanks,
Andy.
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Hi David,
Many thanks for your compreshensive & detailed response. Much appreciated.
A few follow-up questions please:
8. Re the point made in the last para. I have legal cover insurance as part of the car insurance policy and plan to use them for recovering the excess. Presumably I could expect them to help me claim for loss of use of the car after the 2 week courtesy car period finishes, using the argument mentioned?
9. Is there a rule of thumb as to how much the insurance companies usually increase their initial offer - 10% / 15% /20% / more ?
10. I have already accepted £2700 as interim payment for my insurance company. Can I repay them and sue the other insurance company directly or is it too late? Looks like I may have better negotiating power this way. My insurance company also arranged for the recovery of the car. If I went direct, would I need to pay them for this and recover directly from the other ins company?
Thanks again,
Andy
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What you paid for the car is almost irrelevant to the negotiations - it's the cost of replacing it that you are covered for.
The reason a dealer price is the bench mark, is I believe for two reasons 1) very little comeback on a private sale if faulty and 2) dealers provide what you could call liquidity - ie they have them in stock.
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Many thanks for your response oldnotbold. Very helpful.
After some persuasion, the insurance company?s engineer has finally indicated his basis for the valuation:
" The valuation is from the Glass's Guide from the month of the accident, adjusted for mileage. Glass's guide values retail=£3175, private sale=£2675, trade=£2175 at 16,000 miles".
The Glass values seem to be somewhat lower than Parkers, but guess both are 'indicative' values anyway.
There are still insisting on giving me £2700 (based on the £2675 Glass private sale value, on the grounds that I had purchased mine in a private sale) rather than the current £3175 'retail' value per Glass.
From what you say the dealer price i.e. £3175 should be the benchmark, which I am quite willing to accept in lieu of my offer of £3200.
They are still insisting I provide local private sale adverts and will do nothing without these.
Presumably I stand a good chance on a complaint with the Ombudsman that I should be given the retail / dealer value for the 2 reasons you mention and especially as I need to buy a replacement immediately as the courtesy car is only for 2 weeks?
Are there any other options I should pursue before complaining to the Ombudsman?
Thanks again.
Andy.
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Are there any other options I should pursue before complaining to the Ombudsman?
I do not agree with DavidHM's view regarding the "market" being private or auction sales. The Ombudsman makes it clear that the market price to use is as at the forecourt dealer.
Just make it absolutely clear to the Insurance Company's rep that you are sticking to the Ombudsman's rulings, and refer him/her to the information on the Ombudsman website. You are entitled to the market value as defined by the Ombudsman and which has been pointed out to the Insurance Industry time and time again. But they continue to bamboozle people with their own Glass's valuations in the hope that ignorance will win the day. However, Andy, you are clued up and so will not stand for their nonsense. Keep plugging away and tell them you will take it to the Ombudsman if it is not resolved to your satisfaction before then.
Finally, please do keep this thread updated with progress.
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...or alternatively take a out a small ad in a local paper for a similar car in a different colour with an email only contact address - a hotmail acct or similar. :-)
Only joking but it makes you wonder if people do similar things when an insurance company won't budge....?
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I was recently the innocent party of an accident in which my vehicle was written off. The other insurance company made what I considered a derisory offer which I rejected. I eventually got their offer increased substantially by showing advertisements of similar vehcles at the appropriate price. Be persistant and be patient.
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Interesting one, this 'which market value?' question.
Initially I tended to agree with OP, but I think after a couple of hours' reflection under these particular circumstances I am with the insurance co.
There are reasons why cars are cheaper from private sales - that's why they're cheaper. (Sorry if that's stating the obvious, but it must be true.) These reasons relate to comeback against the seller in the event of fault.
So following the private sale your car must be worth less than it would have been had you bought it from a main dealer. As it had only recently been purchased, you still had the benefit of the warranty (whether stated or implied). So think I am with the insurance co.
On the other hand, if you were to have sold - rather than crashed - the car, would you have got more from it because it had come from a dealer only recently. No - because the implied warranty would not be transferrable to a subsequent purchaser. So the market value of the car were you to sell it would be based on a private sale.
But what if you'd owned the car for a year? No implied warranty would continue to exist. At that point I suggest that the market value would be the same whatever the source.
Market value, of course, is very different to replacement cost.
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Many thanks for yor comments Mapmaker.
Just wanted to highlight that per the guidance on the Ombudsmans website:
"The ?market value? is the likely cost to the customer of buying a car as near as possibly identical to the one that has been stolen or damaged beyond economic repair."
i.e. their view is replacement cost should be offered.
An update:
After sending some ads which indicate that the 'market value' is £3200, the insurance company has increased the offer from £2700 to £2900. I have rejected this. I have been asked to follow the Ins. company's compliant procedure which I will be doing and if necessary complaining to the Ombudsman.
The insurance is offering me the private sale but not offering to:
a. reimburse the costs (inspection costs by a third party - possibly a number of these, travel costs etc.) involved in a private purchase. (I am not a car expert and had incurred these in my previous purchase and would expect to do so again if I were to again buy in a private sale)
and
b. Extend the period the 'courtesy car' is offered until the car turns up in a private sale. (Dealers have a greater stock and I would not expect to wait longer to acquire the replacement)
Above are some key arguments why I believe retail values should be offered rather than just the 'bare' private sale value.
Opionions / comments welcome.
Andy.
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Many thanks for your response johncyprus. Quite reassuring.
It would be very helpful to know:
- whether the eventual offer was close to the private sale value or the retail value
- How much higher (percentage) was the eventual offer compared to the initial offer
- how many iterations of offer/rejection cycle did you have to go through before you got the acceptable offer
- how long the whole process took
- whether the insurance company offered you the courtesy car for the whole period until the settlement was reached
- Also. what reasons made you go directly the other insurance company rather than via your own company.
Apologies for the number of questions but this is all quite new for me and my wife and any info, whatever you are able to share, would be gratefully received.
In this day and age, David sometimes does need a bit of help when dealing with Goliath !
Cheers,
Andy
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Arogers222- aplogise for delay in replying, just seen your post.. My circumstances were very different to yours in that my vehicle was a 20 year old BMW motorcycle in near mint condition,a difficult vehicle to value. Originally they offered a paltry £1800 which I rejected, the insurance company wouldn't budge. I eventually insisted on speaking with the accessor who inspected the bike at my home ( and whom I had looked after, lots of tea and chat ) and it transpired that he had recorded the mileage as 144,000 not 44,000. I then referred him to a particular advert in biketrader and the offer was increased to £2,600 on the phone which I accepted ( I then bought the salvage for £600 but that's another story ) This took about 3 months. I have another vehicle so time wasn't important, no courtesy vehicle involved.
Many years ago a friend in an insurance company said " Never accept the first offer, be persistant".
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Arogers 222- Just a further thought, when my own insurance company wouldn't offer enough I considered going for the 3rd party's insurance company, I sought advice and the consensus view was that I continue negotiating with my own insurance company (ie whom whom I had a contract ) which, as above, proved fruitful.
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