What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks

Insurance - cash in lieu of repairs

I was involved in an accident last weekend, when the car behind's brakes failed and ploughed into the back of me. The other party has accepted full liability (and is fully insured) and my insurance company has been informed of this.

My insurance company has said that it is unwilling to repair my car, due to previous repairs being unsatisfactory, so has offered me cash in lieu as a goodwill gesture, instead of writing off my car, which would be a smaller sum. It has also said it will not cover the cost of a hire car as my car will then not be repaired by an approved garage.

I don't know if the sum offered is enough to cover the cost of the repairs needed. The terms and conditions of my policy make no mention of the cash in lieu proposal, so this situation is very confusing. Especially as I understood that I would be entitled to a hire car whilst my car was being repaired. Is this a common solution for insurance companies?

If I don't accept the offer I will receive less by way of write-off value. I bought the car second hand 18months ago, and will not be able to afford to buy another with the amount the insurance company are offering. Why is it that although I am not at fault for the accident, and despite paying insurance I will be left without a means of transport? Am I able to sue the other driver for compensation to remediate the situation?

I would greatly appreciate some advice as this situation is very confusing.

Asked on 15 May 2011 by amynotts

Answered by Honest John
I think you'll be best off accepting this situation. Your insurer is naturally trying to avoid you being put into a credit hire car for an extended period and you becoming liable for the cost of this. Everyone's duty here is to "mitigate" losses, not make money out of them.

Similar questions
At a recent family reunion, my friend's partner backed into my car in torrential rain - before I'd even moved - causing serious damage to my car. He shot off at great speed, driving in a highly dangerous...
I've noticed that you often advise using accident claim management companies when making a claim against a third party, instead of one's own insurance company. I thought that's what insurance companies...
On 30th April my wife had a crash in her Discovery 3 (her fault she pulled out on a 3 tn truck) and was struck at 50mph on the OSF wheel. The car suffered extensive damage and was recovered to our insurers...