Doesn't your insurer pay out the market value of the car?
A claim under common law on the responsible party would be to "put you back in the position you were before the incident"
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"put back in the position that one was in before the incident."
That's exactly the phrase that came to my mind, and the reason I'm asking this question, so I can give her some proper advice and not just my own hazy recollection.
Thanks chaps, keep the advice coming...
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If the payout were related to the purchase price it would be most unfortunate if she had won the car in a competition, as the payout would be zero.
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Purchase price? What about a man who writes off a car which cost him nothing ie an Xmas present from his wife? He's not going to get a zero payout because it cost him zero. What about writing off a lease car that you don't 'own' and didn't pay for - there must be a way round this!
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many previous threads on this, but since some links may now be dead, start with
www.honestjohn.co.uk/forum/post/index.htm?t=32327&...e
www.financial-ombudsman.org.uk/publications/ombuds...m
Most policyholders assume that their insurance policy will enable them to replace with a similar vehicle a car that has been stolen or damaged beyond repair. Our approach mirrors this. We want to see firms making a reasonable assessment of the car?s ?market value? ? and then paying this amount. 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.
and search the ombudsman site for other examples.
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p.s. - in case it is not so easily apparent, their search is at
www.financial-ombudsman.org.uk/search/sitemap.htm
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SWMBO is going through this at the moment, result of the prang couple of weeks back. Insurance company was, I thought, pretty reasonable.
They rang up and said that they are going for total loss and made an offer of X, SWMBO said thank you I'll call you back in a couple of hours when I've had a chance to think. In the meantime we rang a couple of dealers asking what they would ask for a replacement for her car, basically came out at X + £100, so Ins co were offering pretty close to retail. Rang the Ins co back as promised, told the guy what we'd done and that we wanted X + £200, he said no problem we want to get settled, X + £200.
Result happy Ins co and happy-ish SWMBO, she's still upset at losing her pride and joy, as she can go shopping with reasonable confidence that she's going to be at the right place in the market to get a replacement.
I would suggest that that is how it should be and am glad that her Ins co, for one, is following that line, at least on this occasion.
Cockle
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f.a.o. Cockle. Naming and praising isn't banned.
Too many people pick insurers purely on price - claims handling is something worth paying a bit extra for.
Martin
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How long ago did she pay £700 for the car? I suspect that it was not very long ago. Unless she has had a load of work done or added something extra to it, the car will have depreciated in value rather than increased its value. Either which way if she only paid £700 for it last month for example, then she is only £700 out of pocket and I suspect the insurance will only pay her £700 with regard to this point.
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... I suspect the insurance will only pay ...
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simon:
so you reckon the insurance ombudsman is wrong?
insurance ombudsman say the "market value" is the right price.
their web site explains how the market value is worked out. note: the market value is not trade value, and it may well be more or may be less than £700 originally paid whether one week ago or one year ago. some bangers can actually rise in value after bottoming out in depreciation.
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I can't completely agree with Simon, but:-
1. Who's to say that the £895 asking price *is* market value? Prices of bangers are variable and this one could be overpriced. In fact, there is likely to be an element of haggling in the price and it is the insured's duty to mitigate his or her losses - which means they should still haggle.
2. Market value is defined by the ombudsman as the value in the market (whether dealer, private sale, or auction) in which the insured habitually purchases their car.
If she makes a habit of buying cars at auction then an £895 car at a dealer? might only have a market value, *for her* of £450. Conversely, if she got a spectacular deal last time, there is no requirement on her to repeat that.
3. There is also the possibility of betterment, i.e., if her tyres were down to the legal limit and the £895 car has four new ones, that would account for the difference in price and would be an additional benefit to her.
4. Finally, the insurer may well take the view that it will cost a great deal more than £195 to answer all these questions definitively and should therefore take a commercial view on the matter.
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How long ago did she pay £700 for the car?
About 6 months maybe. But once a car reaches a value of £700 depreciation doesn't really have a great deal of effect!
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Funnily enough they were picked on price by SWMBO and they are internet based so I wasn't expecting too much from them but they stood up to the test.
Hire car was provided within 36 hours once they decided car was unroadworthy, car was collected and assessed within five days. Agreed value last Friday, cheque has arrived this morning, agreed to us keeping hire car while we look for replacement, up to the end of next week. Going out to test drive something tomorrow.
Only fly in the ointment was SWMBO didn't think the offer of a Beetle was suitable replacement for a Vectra and eventually settled for a Golf, which she really hates to drive, she reckons the driving position is like driving a bus!
Whether they would have been quite so accomodating if the other party hadn't been bang to rights by coming out of a side turning across give way markings and signs I can't judge.
As you suggest I will name and praise because, on this occasion, price and internet delivered, so, stand up and take a bow esure.com.
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