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What do I do if an insurer refuses to pay market value for my Cat D car?

My car was reversed into in November last year, it was assessed as Cat D and the other driver admitted responsibility. I accepted an interim payment of £4995 minus £1300 as I decided to keep the car and get it repaired myself. I've sent examples of cars for sale on Autotrader showing that was worth £6000 when hit, but the other side (Aviva) are not replying to my insurer, Markerstudy. I've thought of reporting Aviva to the Insurance Ombudsman or issuing proceedings in the Small Claims Court. What should I do?

Asked on 11 April 2017 by exup66

Answered by Tim Kelly
There are two issues here, the first is the car being dealt with as a "constructive total loss" and the second is the value. Technically, there is no such thing as a Category D total loss. A vehicle is only ever a total loss when the repair cost are more than the market value. For a vehicle to be a constructive total loss, the insurer would have to retain the salvage and sell it to reduce their settlement. In your situation, they can not sell a car back to you, as you already own it. You should never agree to buy a Cat D back, as you are conning yourself. For example: your £5000 car has £4000 of damage on it. Your contract of insurance advises that "we will indemnify you up to the market value of the vehicle". The insurer's liability lies at the repair cost of £4000. Should the insurer advise that they wish to deal with the claim on a constructive total loss basis, they means that they will obtain a sum of money for the salvage when they dispose of it. For them to dispose of the salvage, they need to have ownership. They say they will get £1500 for the salvage, they can only get this when you have consented to sell the vehicle to them. As you have not, if they deduct £1500 from your settlement, you now get £3500 rather than the amount your lawfully entitled to under contract at £4000. You have lost £500, and now have a car that is worth 20 per cent less due to having the connotation of being a Cat D total loss. It is better to INSIST on the vehicle being repaired "up to" the market value, rather than retain salvage. It may well be that Marketstudy have breached FCA regulations under ICOBS by acting in conflict to your interest: In relation to the value, it has nothing to do with Aviva, as you dealt with Markerstudy under contract. You need to complain to Markerstudy about the above, and also dispute the market value.
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