Alternatives to scrapping vehicle after accident

[buildersmate]

My son's car was damaged by another car whilst parked in the staff car park. The culprit owned up, so it seems to be a simple case of the owner's insurer settling. The vehicle is 9 years old but in good condition for age. His insurer, not the other vehicle's insurer, has decided the vehicle is not economically repairable. This seems at best a marginal decision. An equivalent vehicle (if one could be found) would appear to cost around �1200. Questions are:
1) They appear to be saying that, with an old vehicle, if the cost of repairs are greater than 60% of its value, they scrap it. Is this an insurance industry benchmark they always use?
2) What is the basis of their valuation (which is nowhere near �1200) - does he get a say in it? Can he appeal to an indepedent body (the Insurance Ombudsman?)
3) Why is it his insurer making these decisions - why can't he deal directly with the culprit's insurer?

[gouldc]

Any chance you can give me the vehicle details? I'll value it for you - don't need the full reg, just the letter and year, full model details, mileage, and how many doors - also letme know the month of the incident if possible.

In regards to the rest of the question:

1. As a general rule we will look at scrapping a car at 70% of the pre-incident value. This is mainly because the car may require further parts when stripped down. There can be other reasons (such as a long delay in obtaining some parts - i.e Rover), so it is easier to write-it off than drag the claim out. Technically, we're obliged to repair the vehicle up to 100% of it's pre-incident value, but it all comes down to economics. I've not seen any cases in my time doing this where we have done this though.

[gouldc]

2. Valuation SHOULD be from Glass's Guide for the month of the incident. It's the industry accepted guide (although not always correct). The valuations are based on dealer returns across the country, so it is a national average. prices vary in different parts of the country. Ignore people who reply with bottom book, top book, retail or trade - offer's should be at retail (top book), subject to mileage and condition adjustments. He can dispute the valuation by submitting adverts for comparable vehicles - if you can find the same vehicle for more, submit the adverts. Obviously if you can find adverts for less, then so can the insurer and you won't necessarily get an increase. We try and locate adverts before releasing an offer as well as using the guide - I appreciate the guides are well out of line with the real world on some vehicles. If the insurer refuses to increase, you have submitted evidence, and they have provided nothing to support them, contact the Ombudsman after you have complained to the insurer's relevant department - the ombudsman generally won't touch the complaint until you have received a final response from the insurer.

[gouldc]

3. He is welcome to claim via the other party's insurer - be warned though, they may ask his insurers for copies of engineer's reports, etc, so he may get the same value. If that happens, you can't go to the ombudsman over the other insurer's decision.

Sorry for the three posts - my system is very slow and this was the only way to do it!

[buildersmate]

Very good, thanks. Most useful to have an insider to talk to.
The vehicle is a Peugeot 306LX, 5-door, W-Reg/2000 with 120k on the clock. What would Glass' say about that? The damage occurred last week.

My son is concerned he has been contacted by a salvage agent (on behalf of the insurer) who is definitely not in the business of repairing cars - only scrapping them. No value has been offered by his insurer to him yet and no assessment of vehicle has been undertaken. He believes the insurer has made a straight assessment that the vehicle is not worth repairing, based on his report of the incident. The vehicle is still driveable, having been scraped down the side.

Also, is it right that his insurer is invoking the XS clause for his policy? - even when there should be no question about liability of the culprit's insurer paying out (the vehicle was unoccupied / parked in the staff car-park). As far as he can establish, liability of the other party is not being pursued (yet) by his insurer - and hence my earlier question about whether it is possible to be dealing directly with them?

Is an insurer obliged to make an offer to take the car away AND an offer if the insured wishes to keep the damaged vehicle?

[gouldc]

Sorry to be apain, but there is no engine size (my fault). I've assumed it's a 1.4, but the values won't differ hugely regardless of engine size - you'd be talking about �200 either.

Average mileage for the year would be 79000. At 120k, the values would work out to �1725 retail, �650 trade. Obviously this is not taking into account pre-accident condition, so it could be adjusted either way again. These figures are also from May - someone has taken my more recent guides, but figures suggest prices are remaining quite constant, so you may see a �50 drop over the two months.

As a general rule we will move cars immediately to our salvage yards mainly to avoid any possible storage charges - if the car is drivable, there is nothing stopping you keeping it until a settlement figure is agreed. The cars are usually sold on at auction by the scrapyard (dependent on the category) to be repaired or for spares. Typically, a lot of cars with damage like your son's just go straight back on the road.

Have they actually inspected/estimated the damage? We make a lot of decisions to move the car straight to salvage on age/value/damage reported - I would have said your son's car is a border-line economic total loss as it will likely need a respray up the entire side, plus unknown parts.

[gouldc]

2nd part again!

If your son is dealing through his insurer, they will almost always invoke the xs - sometimes we waive it if liability is admitted straight away, but the other party's insurers should refund this pretty much straight away - obviously if he claimed via them, he would not be charged an xs.

In regards to retention of the salvage - we generally refuse this on two grounds:

1. we can't guarantee that the car will be repaired with the money we pay out - you wouldn't believe the number of times we make cash settlements for normal damage claims only to find someone trying to submit the same claim again and again!
2. Vehicle Identity Check - probably best if you look it up on line to find out more, but it's a bit of a pain in the backside

However, we cannot refuse to allow someone to retain the vehicle. We have contracted figures with salvage agents who have to pay us a percentage of the vehicle value (what we pay the policyholder), and it goes up dependent on the value and category.

Speak to the insurer - they may allow you to retain. It may also be worth requesting the same via the other insurer - we all have different contracts with different salvage agents, so you may get a better deal from one than the other. The retention figure is generally non-negotiable.

I trust that covers everything, but let me know if there's anything else.

[buildersmate]

My goodness - most impressive and very helpful. BM

[gouldc]

Nothing's straight forward in the insurance business! Anyone who can give you a one word answer probably doesn't know what they're talking about lol