Total Loss Motor Claims
Your car has been written off. What now?
My car should not have been written off as a Total Loss.
But it will be if your insurance company believes that the cost of repairing your car is going to be more than your car is worth. If the cost of the claim to your insurer is £1000 and your car is only worth £999...your car will be declared a Total Loss. Under the terms and conditions of your policy the insurance company is obliged to repair your car to the standard that it was before the accident happened. Now if your car is, lets say, ten years old that may not be possible because:
1) Labour charges. In a body repair shop that is between £23-25 per hour at a garage approved by your insurance company.
2) The cost of new parts. Your insurer has to use new and approved parts for your make and model.
3) There will be additional costs for an insurance company such as: recovery and storage.
Once the engineer inspecting your car has worked out the cost of the labour involved, the cost of any new parts that might be needed plus any recovery and storage charges that will have to be included these costs may well exceed the value of the car and in such cases he will write the car off. You will then be contacted by him or your insurance company and be offered what is called; The pre-accident value’ (PAV). This is what your car would have been worth (Its market price) had you put it up for sale before the accident destroyed it. Market price means private sale and not what a dealer in a garage would try to sell it for.
Total Loss categories.
Category A: The vehicle is question has to be crushed. (usually applied to cars destroyed by fire).
Category B: The Vehicle cannot be put back on the road as the damage makes it structurally unsound though parts can be removed and retained.
Category C & D: as far as you will be concerned there is no difference. These two categories mean there it is only superficial bodywork damage which is repairable. But even so the cost of the repairs make it uneconomic for an insurance company to do so.
Category E: Usually applied to vehicles that have been stolen.
However, if your car is declared a total loss and you don’t want to loss it to the scrappers you have two options.
a) Simply withdraw your claim and take your vehicle back. Even if the insurance engineer says that the car is a total loss and unroadworthy there is nothing to prevent you taking your car back. It is still your car ! Your insurer will advise very strongly against it purely on the grounds of safety (yours and other car users) but the fact remains there is nothing your insurer can do if you decide to withdraw your claim and take your car back.
b) Even if your car is a Total Loss it doesn’t necessarily mean that you can’t have your car back even if you do claim. If the car is written off merely because it’s too expensive to repair and the damage is confined to the bodywork then usually you will be allowed to keep the car if you wish and you will be offered what’s called a ‘cash in lieu payment (nett of excess if applied to the claim) in settlement which means that your insurer will return your car to you unrepaired with a lump sum which you will be expected to spend on getting the car repaired yourself in any manner you see fit. And until you can produce proof that your car has been repaired and you can supply a new MOT your policy cover will be reduced to TPO.
However you will be expected to pay what’s called a ‘retention fee’. When an insurance company deems a vehicle a total loss it will buy the car from you and sell it on to a salvage agent. Your retention will be the price the salvage agent would have paid for the car had the insurance company sold the car to them.
In either event once your car has been declared a total loss by your insurer will be added to the Miafta database as such. And if in future you intend to sell your car and the potential owner does a ‘Miafta search’ your cars total loss status will be revealed.
If you are buying a car it is always worthwhile to check if it has been involved in any previous accidents or if it has been written off. If it has been it could have a huge impact on the PAV that you will be offered by your insurance company.
My car is worth more than that!
You might have bought your car for £1000 three years ago but that doesn’t mean your car is worth that now. And of-course you may have paid more than you should have for the car in the first place. The question is; how much is your car worth now? Had you decided to sell it before the accident how much could realistically have expected to get for it? That will depend on: the make & model, its condition, its age, mileage on the clock. If your car’s market value is now £500 then that is all you will be offered. And your insurer wont increase the offer because the car has sentimental value or you just can’t do without a car or because you paid more than that for it three years ago.
Once a vehicle has been written off you will be required to return your: certificate of insurance, your registration documents, your MOT, a copy of the driving licence of everyone insured under the policy to drive the car and (usually) the car keys to your insurance company.
In a case where your vehicle has been destroyed by fire the value of the vehicle will be based on its last MOT and especially the mileage declared on it. So you will need to send that in along with your vehicle registration documents so that the engineer can work out the ‘pre-accident value.’
An insurer will re-consider an offer you feel that it is too low. However, most insurer’s will expect you to produce evidence that they have got it wrong. Usually they will expect you to show them copies of adverts where a vehicle that is (almost) identical to yours is being sold for more money that you have been offered.
A vehicle is likely to be deemed a total loss not just because the damage to it was extensive but also because the cost of repairing it would be more than the car is worth. This is most likely when the car in question is old. It’s not been unknown, for example, that a car that has had its windows smashed has had to be written off since replacing the smashed windows would have cost more than the car is worth.
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