Car written off after minor bump: full payment offered but whats the deal with insurance companies?

[alicecam]

I am trying to get my head around the business model of insurance companies and their apparent willingness to write off cars when they are easily fixable.

I was in a slight prang on a country road nearby recently. For context our car is a 10 year old Renault family car, worth £4-5000, which has served us well for 5 years - it has the odd scratch but it has been serviced and maintained by us and was fine for our purposes.

I had my accident: I was doing a u turn and midjudged and hit the edge of another car on the narrow road. Our car had a small dent in the bumper. The other car though was a Range Rover and it seemed to knock his wing slightly and the bumper at the side fell off. Other driver was angry but his car was drivable but I feared the cost of damage to him as they are fancy cars!

I was shocked and apologised, gave my number etc and said we would go through insurance. Got home submitted my claim and they said they would send someone to look. Man came a few days later and took car to central garage 70 miles away. Next day as I feared they rang and said it was an unrecoverable loss and they would pay us £5000. There didnt seem to be the option of doing anything else - plus we're not too unhappy as we were thinking of selling anyway.

So today out of interest I went on to the repair company website and there is my car being offered for auction - described as good condition etc. Presumably a motor trader will buy the car, fix the damage and then offer it for sale.

Surely it would have better for me to get it fixed at a local garage and then submitted the bill which would have been £2-300 to the insurance company? Instead it has cost the company £5000 + admin and means we now need to look for a new car

Why don't you buy it back, get it fixed yourself, and then re-sell when you're ready? Sounds like you'll make a profit!

My friends brother had a similar thing years ago. He bought his car back, put it to a local garage to repair & ended up with a nice profit & his car as good as new. Made no sense

This happened to us and I think it is a combination of fear of litigation (if they repair your car, you crash it again and are injured, you could sue them) and the high value of used cars, either for resale or parts.

Plus the cost of repair isn't just the work, but you'll need a courtesy car and if there's a parts shortage, they could be liable for months of hire car costs (this happened to a relative).

In our case, someone bumped into DPs horrible old and in need of a lot of work beloved Subaru and before we knew what had happened, they'd taken the car away and deposited close to £2k in his bank account.

Which wouldn't have been a bad thing, except that then he was unexpectedly carless at at an inconvenient time and he'd lost a car that he liked so needed to find another one ASAP.

You can take the money and buy the car back from the insurance company.

There can be many factors at play but they need to use new parts(where someone else could repair with used parts), labour costs, courtesy car charges(which could be high if there are long lead times on parts). To repair your car could cost them £4k. 5 years ago someone dented my bumper at walking pace, I think the total claim was about £3.5k.