There is no obligation at all for the insurer to agree to repair the car if they deem it uneconomic to do so - by which I mean they cannot get the repairs undertaken for less than the value of the car. If this happens they will write it off.
In these circumstances they can either:
- pay you the full "real" market value of the car by which you could obtain another of the same age, model and condition. This will not be as much as the forecourt "sticker" price. In this case they effectively buy the car from you and they recover the salvage value - either by sc***ping it or selling it to someone else to repair;
- pay you the full "real" market value of the car and let you buy your car back from them at the estimated salvage value so you can have it repaired somewhere which is cheaper than they might use - or repair it yourself; or
- pay you an estimate of the full real market value of the car with a deduction of the estimated return they might get for sc***page and let you keep the car.
In your case they are offering you deal 3. There is an advantage in 3. in that the car may avoid being listed as a category D write off which significantly affects the resale value. So if the car is repairable in a manner that is economic for you but not for the insurer then it might be a good deal.
So if they offer you £1500 and keep the car and a good Yaris goes for £1900 they are effectively valuing yours for salvage at £400. If you like the car and could get the necessary repairs done cheaply to put it back on the road in reasonable condition then it might be a good deal. If the car was seriously damaged then the chances are you should tell them that you want them to deal with the salvage and get them to pay you the full market value.
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