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Insurance Company Tactics

Technical issues not related to a DLOC car marque, eg tyres, ethanol, other car makes, etc. and legal, political and insurance
Stan Thomas
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Insurance Company Tactics

Post by Stan Thomas »

I was unfortunate enough to strike an unlit vehicle in a very dark narrow country lane last Saturday night - and reported the details it to my insurers at 9.20am the following morning (Sunday), and they took details of the other party etc.

Ten minutes later I received an email to say my car had been referred to the "total loss" team - and someone would contact me to take it away, all without any vestage of deciding if the car was repairable or not etc.

Just after 9.00am the following day (Monday) I received a call from a car salvage auction company saying they needed an address to collect my "scrap" car to take it some 90 miles away to assess its value. They said if I did not agree the valuation, my car could be returned - but would not be drawn on who would pay for it's transportation back to my home.

Was I right to decline, given that I thought my interests were not being best served - as in my view the insurers were ostensibly seeking to value my car on the basis of its potential auction value rather than their contractual obligation to afford me a settlement value based upon what it would cost to replace (notwithstanding they had not addressed the question of wether or not it could be repaired).

Should not the logical approach have been to first assess if the car can economically be repaired, and if not, upon reaching an agreed settlement value, then to dispose of the vehicle as they seem fit once having gained title?

As anyone come across this situation, or could add comment please?

Stan Thomas.

Sydsmith
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Re: Insurance Company Tactics

Post by Sydsmith »

Are we talking modern of classic Stan?

Insurance companies are on a cost cutting mission and they don't do anything that costs money if they think ultimately they will be paying out on a write off.

What you can be sure of, as I am sure you will know, is that they will make a silly offer in the first place and wait for you to challenge it as of course you must.

If the car is mobile and street legal, I would get a valuation from a reliable garage and find a repair centre that is approved by the insurance company, get an estimate for repair, then armed with the facts, stand your ground.

If it is a classic I would not let the car go until I had at least some sort of deal in the making, a friend of mine had his car damaged and taken in by a recovery company. Before he had agreed the insurance situation, the recovery company sent it for scrap, even though he had scrap return to owner agreed in the policy.

classiclife
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Re: Insurance Company Tactics

Post by classiclife »

Hello Stan,

You did the absolute right thing by refusing.

Your first action should be to take photos of your car and the damage - this to be sent to the insurance company.

Once you have done that, I would wait to hear from the company and progress from there. I also agree about having your damage independently assessed be it you drive the car (if legal) or an assessor to visit you.

As Syd has asked are we talking modern - if so how old, or classic and what is the extent of the damage ??

Regards.

Richard.
1968 Daimler V8-250 Saloon
DLOC East Sussex Branch Secretary
DLOC 2.5L V8 & V8-250 Registrar - https://www.dloc.org.uk/v8-250
DLOC 2024 International Rally - https://www.dloc.org.uk/rally-2024

Chris_R
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Re: Insurance Company Tactics

Post by Chris_R »

The established principal is that your insurance must put you back into the position you were in before the incident.
If your car is damaged it must be repaired to the pre-incident condition. If the cost of the damage exceeds the economic cost of repair and is declared a total loss then the payout must enable you to go out and buy exactly what you had before in a commensurate condition. That means exactly same model, same year, similar mileage and similar condition. This is where a lot of angst comes because what people see as their car's value and what an insurance company sees as a car's value is often quite different.
The approach does seem rather heavy handed, I assume from your post that despite the collision the car was still driveable. You don't say what car you were driving or how much damage there is to either your car or the other one.

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Petelang
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Re: Insurance Company Tactics

Post by Petelang »

In my opinion, all insurance companies are thieving rogues, and I dispute they are cost cutting.
They only do what suits them making a profit, and costs you more.
As an example: If you make a claim, the following year your premium will increase dramatically, and will gradually depreciate over a number of years to the point where you have paid back all that you claimed with an interest rate that would make a pay day loan company blush.
They refer your car to agencies they alone have interest in to uplift, recover, repair or even scrap your car.
They badger you into having a replacement vehicle, even when you don't need one, because the rental firm is probably in their portfolio too.
A few years ago my Daimler V8-250 was rammed in the back by a bloke in a BMW. I immediately took it to my garage who restored the car who have a bodyshop to get it estimated. The insurers wanted to uplift it and take it over a hundred miles away to their "approved" repairer, even though the same "approved" repairer had a large operation only half a mile from my chosen garage. I knew the guys in the local place and they said, straight away, that they wouldn't consider repairing a classic, it would be written off and scrapped in the blink of an eye.
The insurers kept badgering me to have a replacement car, even though I said no, further they kept pressing me to make injury claims, despite there being no injuries to either party.
Their assessor finally came to view it at my regular repairer and the whole job was completed for less than £1600, no cost to move it, replacement car, etc, etc.
The "accident" was not my fault at all but the following year I had a premium hike, because I had now become a "statistic", like I'm suddenly accident prone, and I had in fact saved them significant outlay.
A wholly unacceptable business from start to finish.
Whilst I have been a careful driver for so many years, it counts for nothing. I don't trust them at all.
Peter
Peter Langridge
Cloud Nine Classic Weddings, Nottingham.

Stan Thomas
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Re: Insurance Company Tactics

Post by Stan Thomas »

Thanks for all your supportive replies - it really shows what our Club is all about.

Thankfully, it was not a classic car and no-one was injured.

I take on board all you say about dealing with the insurers - its as if you were all privy to the conversations I've had with their call-centre staff!!

My intention therefore is to forward a letter to them via recorded delivery containing photographs both of the collision damage and to demonstrate the exemplary condition of the vehicle - along with a notation of the (recoverable) cost of having both an estimate for repair and as to condition.

Se where that goes.

Any road up (as they say in Birmingham) Thanks for your input lads.

Stan.

A.N.Other
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Re: Insurance Company Tactics

Post by A.N.Other »

I agree with Peter . In my opinion Insurance companies are nothing but thieving rouges. I don’t understand how the government still allow them to trade as they do. They are far more morally devoid then the banking sector ever was.
Colin,
I may be slow but I’m rough as well !

Sydsmith
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Re: Insurance Company Tactics

Post by Sydsmith »

For a short while I was a Director of a small specialist electrical appliance insurance company and it was an eye opener.

The success, because there was no chance of failure, was to reserve forward each year for the coming year based on the past year and to increase premiums to ensure a set profit level.

So if say premium income was a million and costs were eight hundred thousand in 2018 and the profit margin is set at 25%, premiums for 2019 would be increased by 5%, plus a percentage for inflation and to prevent a reduction in profits, which we always made.

Premiums were not increased across the board but were increased for those who incurred costs and held or reduced for those who did not, so if a group of products in our case were less reliable the policy holder got a bigger bill.

We kept very tight statistics and knew to the penny what each manufacturers product cost us in claims against premiums so it was easy to prevent a loss, we just loaded the premiums on those products.

If a manufactures products were particularly unreliable or were particularly expensive to repair and cost us money, we refused to cover them.

Because we had reliable statistics we could spot a crook a mile off and we rarely got caught.

I would say that because we could predict our average claims within a few pounds and needed to be competitive in the market, the best clients had the best deal. Cant say that was fair or other wise but what it did mean was the majority of clients had a value for money policy. Syd

Chris_R
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Re: Insurance Company Tactics

Post by Chris_R »

I think to say Insurance companies are thieving rogues is not right. They are businesses like any other business; their number 1 priority is to make money for their shareholders. Your insurance policy is simply the product that they use to make that money and the quality or otherwise of that product will determine their success. And as Syd says the difference between what they can get in premium income versus what they pay out is what gives them that profit. They have incredibly detailed and comprehensive statistics and those will show that someone who has been hit from behind once is more likely to be hit from behind again than someone who has not (yet) been hit and is therefore an increased risk even if being hit was totally not their fault in any way. Even if the car was legally parked and you were not in the car when it got hit that increases the risk because obviously the car was parked in a position which elevated the risk of it being hit. If you have your car repaired and continue to park in the same spot if it's been hit once there is an increased chance of it being hit again even though you are doing no wrong. This is what years of highly detailed claims records statistics can do for them.
I think where things go wrong is when there are commissions and revenue targets on middle level managers. Money is a powerful motivator and if a manager is almost meeting a quarterly target with just a few days to go that manager will be looking for ways to improve their position no matter how "sharp" those practices might be. More senior managers will often turn a blind eye to sharp practice as long as it doesn't affect them directly. Insurance companies have deals with vehicle dismantlers who will guarantee to return a certain percentage of the value of a vehicle that has been written off. So there are various deals going on left right and centre all of which are designed in the insurance companies interest in maintaining their profit line.
We just have to work within that framework and know our rights, some of which are protected in our interests by the Financial Ombudsman. First off, in any loss, the settlement must put you back into the position you were in before the loss. This means that in the event of a total loss the settlement must enable you to go out and buy an exact replacement car, same make, model, year and specification with similar mileage and similar condition. But this is where it gets so difficult because of the vast array of different specification levels of models it's actually quite hard to find the exact same car. They also assume that the ticket price is not the price you will pay as you can always negotiate a better price with a seller and that is allowed for.
You have the absolute right under EU law to choose your own repairer. Insurance companies will want you to use a repairer they approve of because they will have worked with that repairer to get the car repaired as quickly as possible and as cheaply as possible. They will not need to send an assessor to inspect the car, they will trust the garage to work correctly and that will be checked and audited to ensure the garage plays fair to the insurance company, after all it's their bread and butter too. Also remember though, every penny the insurance company has to pay out on a repair affects their profit. A repairer they haven't worked with might take longer to repair the car, they will say it might not do the job as well (actually might do it better) and they risk higher costs as a result. Hence they will pressure you to use their approved repairer and if you don't then perhaps you won't get a courtesy car or other concession.
Next, as we're in a classic car forum it is worth knowing about the latest insurance write off categories A, B, N and S. Buried in the Code of Practice (available on the ABI website here: https://www.abi.org.uk/globalassets/fil ... ov2019.pdf) under Section 9.4 it states:
Historic/ Classic Vehicles
It is recognised that some historic/ classic vehicles or vehicles of special interest may be repaired irrespective of extent of damage, providing it is safe to do so. In these cases the vehicle will fall outside the Code of Practice, which will not apply. However careful consideration must be taken to justify this action and if required escalation sought to make sure the correct decision has been made.
so automatically writing off a Daimler V8 250 should not happen unless it is really seriously damaged and even then it should not be automatic. Any engineer that comes out and inspects a classic car that's been in an accident and allocates one of the insurance write off categories is wrong as he should not be using the code of practice to assess what to do. Furthermore, the overwhelming majority of engineers will have no experience of classic cars, parts availability or costs.
Then we get onto the situation of agreed value policies with salvage rights. Agreed value policies are both a plus and a minus. They are a plus in that a) the insurance company knows the limit of their liability for the car and b) the insured does not have to haggle about value. They are a minus in that unless the insured regularly updates the agreed value it can easily fall behind market value and then they will lose out. The sting in the tail that is not widely publicised is the buy back value that an insurance company will place on a total loss for a classic car which could be as much as 40% or more of the agreed value. The salvage buy back is a percentage of the agreed value on a sliding scale. A friend had his car declared a total loss from a fire and a payout offered at (I think) around £11,000 with a salvage of (I think) around £1600. The £11,000 was not acceptable and after protracted negotiations he finally settled at around £18,000 but the salvage cost to keep the car (which he did want to rebuild) was now £4,500 simply because the payout was higher. If the payout had gone over £20k the salvage would have been 30% and over (I think) £25k it would have been 40%. The insurance company has an agreement with a salvage business to buy the written off vehicle for that amount.

A.N.Other
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Re: Insurance Company Tactics

Post by A.N.Other »

Good defence Chris. My opinion has not really changed although I do understand it is a profit led business.
The major problem is that every company insist in their advice on the result of an accident “NEVER ADMIT FAULT”
That tells me that their first priority is to avoid payment and ask people to lie. They are also over zealous to add punters to the insurance black list without informing said punters. Trust me it takes a lot of time and effort to get things like that sorted after you find out the hard way and get nasty accusation letters threatening to take legal action. All with no compensation for the punter who suffer when they are totally innocent.
Colin,
I may be slow but I’m rough as well !

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