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The Best Way To Handle a Third Party Car Insurance Claim (Part 3)

Sean O'Meara 19/02/2013 09:05:00

The Best Way To Handle a Third Party Car Insurance Claim (Part 3)

Scrapping the Car - What Happens Next?

Part 1 Part 2 

If scrapping the car is best solution, you will find yourself in a negotiating position once again. Scrap dealers, or salvage agents as they more commonly called, aren't the only option for disposing of your car.

Local body shops and mechanics may offer a better price because they can typically extract more value from the car and quicker.

If your car has low mileage, a full service history or is a particularly prestigious make, the car may attract a higher salvage price at a garage than from a scrap dealer.

Get at least three quotes for salvage but don't expect to get exactly the same as the value quoted by the insurer. The value the insurer applies to your car as scrap assumes you have a queue of willing buyers. When you're ringing around for quotes, the value automatically drops because you're the one doing the selling.

Once scrapped, notify your insurance company that the car is off the road and cancel your policy with immediate effect. There's no point paying for cover on a car that you can't drive and it's highly likely that the car isn't covered any way, due to its current condition.

Your insurer should refund you for any cover you've paid for after the date of cancellation. Contest any and all cancellation fees, stating that it is your belief that the insurer should seek costs from the third party for the closure of the policy. They may also try to deduct the fee from the refund due. Resist this trick too.

Insurers apply a cancellation fee as a matter of course, even when you have no choice but to cancel. They do this because it's easier and quicker to get the cancellation fee from you, rather than the other insurer. Don't stand for it.

Once you've cancelled, complete a SORN declaration and send it the DVLA. Then it's time to start looking for a new car.

Used Car Finance

A Guide To Write Offs

An insurance write off doesn't just mean your car is destroyed. Seemingly well maintained, roadworthy vehicles are frequently written off for economical reasons. Here's a quick guide.

Category A

The car is unrepairable and has no salvageable parts. It will be crushed into a cube and recycled. Category A write offs must never return to the road.

Category B

The car is unrepairable, but does have salvageable parts. The car must never return to the road.

Category C

The car is significantly damaged, but is repairable. The insurer deems it uneconomical to carry out the repairs.  Category C write offs must have a new MOT and VIC.

Category D

The car has only minor damage - such as bumper scratches - but the insurer doesn't want to repair it. This is common for older cars or those with a high mileage and cars that are found after being reported stolen. You can repair a Category D write off privately without needing a new MOT or VIC.

Category X

This is not strictly a write off, but an insurance loss category. It means the car has been subject to a claim, but the damage has not been recorded with the DVLA. Category X typically refers to incidents where a claim is lodged, but the two parties agree a private settlement.

Sean O'Meara is editor of Watchmywallet.co.uk

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