Do you always lose out on car insurance?

[AlumhurstRoad]

So three years ago I bought my "dream car" with the lump sum of my pension pot for £5,250. It was hi-spec, low mileage, full service history, one owner. Since then I have driven it at weekends and have looked after it well. Similar vehicles are currently available on Auto Trader for about £4,500.

I have not been involved in any accident for over 30 years, and that was in a company car. In my own name I have 17 years no claims bonus, the last 13 years with the same company.

A few weeks ago on a dual carriageway, I was slowing to 30 to stick to a speed limit as advised by an overhead gantry, and the car behind ran into the back of me. The impact caused sufficient damage for the insurance company to write the car off, against my wishes as I wanted it to be repaired.

However, the most the insurance company are prepared to offer me is £1,500, being calculated as £2,350 "market value", less £350 excess, less £500 salvage (numbers have been rounded to avoid identification). The remaining £1,500 is not enough to purchase a replacement vehicle, nor is it enough to repair the car, so basically I have lost my vehicle.

Is this a normal result from a "no-fault" accident? I'm feeling pretty fed-up as I have been with this insurance company since 2009 and never made a claim until now. I was expecting them to "look after" me and repair the vehicle, and instead they have scrapped the vehicle and cancelled my insurance.

Has anyone been in a similar situation and were they able to resolve it?

Have you challenged it?
The Financial Ombudsman has some info about vehicle valuation and what to do if you're unhappy: www.financial-ombudsman.org.uk/consumers/complaints-can-help/insurance/motor-insurance/vehicle-valuations-write-offs

Who was at fault and your claims history doesn't, or shouldn't, factor into the valuation either.

You can challenge the valuation.

if it was the other drivers fault (which it sounds like it is) you should get the other costs back from them.

Insurance is there to replace a like-for-like.
Go on autotrader and find some similar vehicles with similar mileage, present them to the insurance company.
If somebody runs into the back of you, generally it is the other party's fault.
Insurance companies are notorious for wriggling out of commitments.
Good luck!

Yep, you need to also to pay for GAP insurance which covers the difference between like for like and replacing with what you originally had. Normally dealerships offer this when you buy a car, but there are loads of companies that offer it much cheaper.

Did you have no claims protection on your insurance?

i would say yes, based on our experience last year. DH was driving my high spec mini cooper works, when somebody came out of a side road without looking and straight into dh who ended up the dip of a grass verge. Actually very lucky to get away with minimal injuries, car was clearly a right off from the start. We got a stupid amount back for the car, we actually clawed some more of it back from a personal injury claim against other persons insurance too, so we got closer to what we were expecting but still a bit short. Don’t really agree with personal injury claims and wouldn’t normally do it but we were so out of pocket. Also same happened years ago when somebody drove into the side of our property. So both times we have claimed on insurance I believe we have been out of pocket, I know you have to have car insurance, but what’s the point if your always out of pocket if it’s not your fault!

You need to claim back you excess from person at fault and check your insurance documents, what did you say the value of the car was at renewal? Something between that and what you find on auto trader should do. For one thing YOUR insurance company isn't the one paying, the other party's company is!

If there's a red telephone in the picture I'm not in the least surprised.

Quite often they won't repair the car for safety or economic reasons so, while it's annoying when you're losing a loved and reliable car. If the damage isn't too great, you could ask to keep the car and buy it from them at scrap value.

However, you should definitely challenge the valuation. Is this your insurance company or the third party's?

If they're at fault, which is almost certainly the case with a rear end shunt, you should receive full value of the car, plus a courtesy car when yours was off the road, from their insurance company not yours.

Due to the rise in second hand car prices, a car you paid £5250 for 3 years ago could well be now worth even more than that, are you sure about the £4.5k valuation? Look for some comparators to send to them.

I sold a car five years ago for about that price and the same cars now are selling for at least that amount, if not more, despite being five years older with a lot more miles on them.

Used to work in insurance so willing to answer any questions.

You may have received a low ball offer but they will be using book price. You should be able to challenge it and provide 3 identical examples. We got so many examples that were a different fuel or engine size and completely irrelevant.

Your premium may go up once this has been resolved because statistically you are more likely to have another accident regardless of fault.

You could also buy the car back from the insurers and have it repaired.

Obviously there is the amount toy against repair cost to consider.

If your insurance is deducting an amount for salvage, does this mean you're keeping your car?

Usually you'll be paid the market value and this is essentially the insurer 'buying the car off you' so to speak so salvage wouldn't be deducted.

As you're not at fault, your excess should also be refunded but this won't be until liability has been settled and the other insurer has paid your claim.
Have you had an update on liability yet? Confirmed Non fault claims tend to be settled nearer the top of valuation parameters as the other insurer will be paying.

With regards to your value, ask your insurer what guides they're using and log a complaint about the value they've given you.
The ombudsman asks insurers to use more than one guide and offer the average between them (and to disregard any that are miles away from the others).

If you remain unhappy once you've had a response to your complaint, you can take it to the Financial Ombudsman Service however, they will only check the insurer has used the right guides and procedure.

Unfortunately car prices are a bit all over the place if a car isn't new. What is advertised on autotrader tends to have a profit built in and isn't usually considered unless your car is rare.

Without knowing what the car is it's hard to say but it wouldn't surprise me if the car is older and this is the reason for the low value - how much a car is worth sort of falls off a cliff when they're between 5 and 20/25 years old as they're not new enough to retain new car value and not old enough to be a classic or rare.

Also you've had 3 years of driving a relatively low value vehicle and it's value has almost halved - that probably isn't far off being right for most cars to be honest.

@Duettino

But what if you drive an old, rare car but with none on the market?

It doesn't sound like a no-fault accident if the car behind you ran into the back of your car (unless you slammed the brakes on unnecessarily and without warning). Why do you and your insurance company believe it was? What did the police say?

It sounds as though it was the fault of the driver behind you (driving without due care and attention) so you shouldn't have to pay the excess or any salvage costs. And you can challenge the valuation.

And finally, it pays to read the small print with your car insurance and not just opt for whoever gives you the cheapest quote because your insurance sounds crap.

Really? Because they've always been fine for me. No quibbling over my genuinely no-fault claim (because even large deer don't have insurance despite their proclivity to leap in front of cars travelling at 60mph). Kept my NCB and got most of my excess back because Covid meant it took them ages to fix my almost written-off car.

I take it it was a run of the mill insurance company? They're notorious for giving low estimates for classic/unusual cars. If you're driving a specialist vehicle (which basically means anything that is not currently purchasable new) you should get specialist insurance. It costs more of course, but they are more likely to understand that a classic car is worth more than its material value would suggest.

You should reject their offer and provide as many like-for-like examples of the value of similar cars on the market at the moment. You could also take legal action against the person who hit you/their insurance company because you shouldn't lose out (assuming they're 100% at fault).

Regardless of what happens with this, remember that your insurance premiums will be higher in future, because people who've had an accident (their fault or not) are more likely to have one in future.

When someone stole my 4 year old car and wrote it off I actually got more insurance money for it than I paid for the car a year earlier.

@VeniVidiWeeWee I'd be interested to see what car has none on the market.

You take out suitable insurance with a specialist company

@Duettino du

Fair enough. Last time I checked there were none.

Now AutoTrader has 2. It's a W reg Jag XJR..

The vehicle is parked in front of my house but I've obviously not been able to drive it for several weeks. They have wasted a lot of time messing around with jargon and questions. Rather than ask all the questions at once, they seemed to come up with a new question each week. The final question was that they wanted a copy of my driving licence, which they could have asked at the very start!

I have challenged their valuation but basically their answer is that it is not up for discussion, this is what their book says, and they will not provide the detail of what the book says.

Is it correct that if the accident is not my fault, then I should not have to pay the excess?

@Sugarplumfairy65 sug

No really. It's my daily driver and not expensive.

Sorry, not really.

Not sure if anyone else has mentioned this. You need to find out what the write off was and if it was repairable. If it was you could offer to buy it back and then get the repairs done. The insurance company just can't be bothered to repair it and will sell it on to a car dealer who will.
The car will always have a write off on its records but if you aren't going to sell it on and use it yourself that wouldn't matter.

I had a fiat I bought for 800 quid at auction that the insurance gave me 2k for. So I won that time!