Here's the second of our three part series on avoiding losing
money during a third party insurance claim. In part 1, we covered responding to enquiries and
Dealing with Write Offs
Even if the damage to your car is minor or cosmetic, there is a
chance that it will be written off. In fact, unless your car is
under three-years-old, the chances are that the cost of repair will
match or exceed the pre-accident value. This is because the
approved repairers favoured by insurance companies are large
operations with big overheads. They calculate the repair costs for
your car based on their own labour costs, assuming each part is
brand new and sourced from the manufacturer.
Unfortunately, it is the insurer's choice whether or not to
write off your car. They won't take into account low mileage,
scarcity of a particular model, service history or sentimental
value. So if you spent six months finding that dream car with low
mileage and full service history, this hard work will be wiped out
with the strike of an assessor's pen.
Responding to a Settlement
There are five write off categories - A, B, C, D and X - and
each has important implications. If your car is written off, you
will receive a settlement offer. You don't have to accept the first
settlement offer, no matter how much pressure you feel under.
If you have a courtesy car, the insurer may apply additional
pressure to accept the money by saying they'll charge you for hire
costs after the settlement. In fact, the cost of supplying a
courtesy car normally influences the decision to repair or write
off a car.
Explain that you will return the car when you receive a
satisfactory offer. Put this in writing if necessary. You are
entitled to a courtesy car for as long as your car is off the road
or until you have the funds to purchase a replacement, whichever
Despite all of the care and attention shown to you in the early
stages of the process, the insurance company are now at the stage
where they want to close the claim and limit their costs. This is
why it's smart not to accept any compensation offers until you have
a chance to review the settlement offer.
If the car is a Category A or B write off, unfortunately you'll
never see it again as it is deemed unrepairable and will be
crushed. In such cases, you will be offered market value for your
car. This is where you have to negotiate as hard as possible.
Consider hiring your own assessor if you feel the insurers are
massively under valuing your car.
If the car is a Category C write off, things can become very
tricky. Category C write offs are repairable, but the cost may
exceed the value. In Category C write off cases, the insurer will
most likely offer you a partial cash settlement, plus your car -
typically market value minus salvage value. So if your car is worth
£3,000 and the salvage value is £300, you'll get £2,700. So you get
money back, plus your car. That's a good deal, right?
What this type of offer fails to account for is real world
salvage value. Scrap prices fluctuate all the time and it's
unlikely that you'll find a salvage agent that isn't an expert
It's tempting to take the money and repair the car yourself, but
this can often be more hassle than it's worth. While you are likely
to find someone who can repair your car for less than a large
insurer-approved garage, you'll be without a car for the duration
of the repairs as the insurer will take back their courtesy car
after you accept their settlement. Typically, there is a two to
three day grace period with courtesy cars.
Scrap or Repair?
Category C settlements also fail to include the cost of
returning the car to the road. After a Category C write off, you
are legally obliged to get a new MOT certificate and a DVLA
approved Vehicle Identity Check. The MOT costs £54.84, not
including the cost of any routine repairs required to pass the
test. The Vehicle Inspection Check will cost you £41. So that's a
minimum of £96.84, assuming your car passes the new MOT.
But it's not just the cost that makes a Category C repairs a
difficult option. Should you decide to sell your car, the write off
will show on any checks that a potential new owner carries out.
Although the check will state that the car is repaired and has
passed inspection, ask yourself whether you'd buy the same car.
When considering a settlement in a Category C write off, factor
in the additional hassle and costs for repair. Ask the insurer or
their representative to break down settlement so you can judge each
factor accordingly. Ask yourself whether their valuation of the car
is fair, get some salvage prices and find out how much you can get
the repairs done for. If, after all of this is taken into account,
you can still make a good saving it may be worth considering
accepting the car back from the insurer.
If not, try to negotiate a settlement that requires the insurer
to dispose of the car and include the salvage price in the cash
Once you've reached a suitable settlement for the car and have
the cash in your hand, it's time to respond to the earlier offers
of compensation. If you elect to accept compensation, prepare an
itemised list of all related expenses and forward these to the