What is a write off or total loss? It happens where the car repair cost is more than the worth of the car, taking into account the salvage value of the damaged car.
We'll assume that your car has been badly damaged. This could be the result of a collision, or damage as a result of the car having been stolen. Let's say that the repair costs are estimated at £5,000. If value of your car is for example £5,500 and the salvage is worth £600 then it makes financial sense for your insurance company to write off the car rather than pay to fix it.
Suppose that the salvage valuation is only £400. It's very likely that they will still total loss the car. The estimated cost of £5000 to repair is based on a preliminary inspection and estimation of the repairs that might be needed. There is a strong possibility that there could be more damage discovered once the repair was started. So even though it looks cheaper to repair the car it would be treated as a border line total loss.
They will want to move the damaged car into 'free and safe storage'. This is normally at a salvage dealer. Their reasoning isn't difficult to follow. Repair Garages have cottoned on that there is a fast buck to be made. They won't be appointed as the repairer but they can bill your insurer simply for keeping your car in their yard. They will sometimes charge outrageous daily rates that can make car clamping fees seem like peanuts! Even the cheapest charges are at the same level as car parking fees in Central London. Insurers pay out vast sums each year for storage charges so they need to move your car at the first opportunity.
Because a few policyholders have caused problems and cost them unnecessary money they might even tell you that they are going to move it in 48 hours rather than requesting your permission. What has occasionally happened is that the salvage people move so quickly that the salvage truck is collecting the car before they've even told you that it is a write off!. Not surprisingly this can cause upset to some customers.
But bearing in mind the reason, please be understanding! They aren't disposing of your car, just moving it to save money. You might ask why you should bother about saving money for your insurance company? The reason is logical. The more money that the insurer pay out on claims, the more you pay in insurance premiums. It is in all of our interests to keep their costs down. My advice is simple- do as they ask. Always agree to have it moved from a repairer. If you refuse, they can insist you pay the storage charges from the date of your refusal.
Occasionally when dealing with an older car, it can be a total loss yet still be perfectly safe and legal to drive. Maybe it has a low value and only slight bodywork damage. Frequently insurers will let you keep the vehicle at your house whilst the next steps in the procedure take place, provided it is not incurring any charges.
Source: http://www.myaddirectory.com/Article/UK-Car-Assurance---What-Makes-The-Insurer-Wtite-Off-A-Vehicle/8475
1 comment:
I completely agree that it better to write off the vehicle when damages are more than the actual worth of the car. Its important to be careful when planning to buy an insurance policy for older cars.
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