Total loss

[parris]

My friend's car was involved in an accident (her fault) and it has been declared total loss by her Insurance company. My friend's insurer has asked her to forward to them all the paperwork relating to the car including car repair receipts, purchase receipt etc. How old do these receipts have to be? The car is Ford Focus, 1.8 engine, reg V, app. 48000 miles. How much could she expect to receive in settlement from the insurer?

[Hymie]

I would not supply my insurance company with any of the requested documents � they belong to your friend, not the insurance company.

The reason they want these documents is to use them to reduce any pay out. Your friend may have purchased the car at a bargain price, may not have had the car serviced etc..etc.
If I were your friend, I would claim that I could not find them - I might find them sometime later, if they show I paid top whack for the car and had a full service history � and I could use them to show the car was worth more than the insurance was offering.

I cannot say how much your friend should get for the car � but in general, insurance company�s tend to offer somewhere close to bottom trade price (but this is not always the case).

[parris]

Thank you for your quick response. Just found out some additional information: A couple of days before the accident my friend had the clutch replaced for approximately �300. Should she submit the receipt for that repair given that she is not submitting any other receipts, or is she unlikely to be reimbursed for the clutch repair anyway?

[NORMANTHEDOG]

take no notice of the idiot above his advise is useless,the reason the insurance company would like recepts is to determine if the car has been serviced and looked after,a fully serviced car will fetch more money then a car that has no history.

[Hymie]

Let us say that the book price of the car is �4,000 � however you bought it from a family friend for �1,000. Once you present this receipt to the insurance company � they can justifiably claim you have lost only �1,000.

Many years ago, the company I worked for sold off its company cars cheap to their employees � I brought one of these cars. Three years later, it was written off (not my fault), and the other guys insurance company offered me �50 less than I had paid for the car � which I gladly accepted. Having accepted the amount, I realized that I should have asked for more � the car was probably worth at least �500 more.

Do you think the other guys insurance company would have given me �500 more than I bought a car for, three years ago, if I had given them the original receipt?
I don't think they would have offered me �50 less.

[JB]

The insurers ask for receipts etc. in order to adjust the trade price for their offer. As Norm says, the value of a car with a full service history is more expensive to replace than one without. If your friend receives an offer below which she could reasonably replace the car with a comparable one, then she should provide the insurance company with local trade ads (from Auto Trader for example) to back up her claim. (Hymie - you should have done this as well if your settlement would not have bought you a comparable car - although ex company cars would tend to have a higher mileage, so �50 less than you paid after 3 years doesn't seem unreasonable.)
In relation to the �300 clutch replacement, no they won't reimburse her because it was for maintenance, but it will (along with other such receipts) go towards proving that the car was maintained to a good standard and therefore (hopefully!) increase the total loss offer.

[flip_flop]

Settlement will be the current market value of the vehicle. This will NOT be trade price and neither will it be forecourt price (your friends insurance will not cover the dealers profit).

The best thing she can do (other than ignoring Hymie's advice) is to provide all documents relating to the vehicle, and if she is unhappy with the price offerred, then she should provide copies of private ads for other vehicles of this type if they show she has been offered below market value.

[Hymie]

Everyone bar me, seems to have the impression insurance companies are benevolent societies.
In my experience they are not, and will pull any excuse to pay out as small an amount as they think they can get away with.

Not too long ago, it was common for insurance companies to request the value of the car you were insuring. Whether you stated the car was worth a penny or one million pounds, would make no difference to the premium paid. Then why would they ask for this information?
The answer is that you may undervalue the car � allowing them to pay out less than they would otherwise. Many have stopped this practice because they realise how much it p|sses off their customers, who have stated what they believe to be a fair price, only to receive significantly less.

If your friend wants to give all receipts to their insurance company � then good luck. Don�t try arguing that the car is worth more because it has a full service history � they will claim they have taken that into account (has the car had any major repair work � which may reduce what the insurance company will pay out?).

Once your friend receives the compensation and tries to buy an equivalent car, they too will find out that insurance companies are not benevolent societies.