A (Non-Boaty) Question for JFM that may also relate to boats in principle.

[ontheplane]

Hi JFM, I wonder if you can help me at all.

I recently had a car written off. It's not a massively rare car in itself, but because of the condition, the level of equipment and so forth it will cost a fair bit (and spec for spec will be impossible) to replace.

I haven't got as far as the Insurance Co yet, only having had dealings with my "accident management company" and the so called "independent engineer" but the crux of the matter is thus:-

The independent engineers are saying the car is "worth" a certain value. I have sent them huge amounts of evidence (cars for sale online) that to replace my car to the same spec will cost massively more than they are saying.

They are saying that it doesn't matter - the insurer is only liable to pay me trade price for the old car based on Glass's guide. My belief is that I am entitled to be put back to the position I was in before the accident.

The other party have admitted FULL 100% responsibility for the accident.

So the question to you is one of "In Principle....."


Do the insurance company only have to pay out a "theoretical" value based on the market "Bible" even if I could not go out to the open market and replace what I have lost for that amount of money

OR

Are they obliged to pay me sufficient money to replace the car with one of equivalent specification and equipment, and if necessary a small sum of money to fit certain features that were essential to me but most cars on the market will not have - i.e. back to the position I was in pre-accident.


I can provide more info as to the actual car etc if required - however what I am after here is the basic "rule" or principle as a third party, hit by someone where liability is not in dispute.


Thanks in advance for your encyclopaedic knowledge of the subject!

 

[beltsandbraces]

being a third party (non fault) they should pay out for all your losses, you have done the right thing to gather evidence of the true value of your car, this is what they SHOULD do but unfortunately insurance companys are a law unto themselves (I know I deal with them every day) all I can advise is stick to your guns and don't accept the first offer given. If you are in hire someone is paying for that and the costs are increasing daily for them, I had a customer put in a Ferrari at £800 a day, with the car hire and cost of repair they could of replaced his car, absolute madness. Good Luck.

 

[ontheplane]

Yup. Just the arguments with the engineers (not the insurance co at all) have taken 2 months - i'm in a loan X5 at £200 per DAY - so if we assume I'm quibbling over £4k they've spent more than that in hire car costs.... Mental.....

 

[KevB]

How much did you insure the car for, market value or did you specify to your insurance company the increased risk?

 

[sailorman]

Yup. Just the arguments with the engineers (not the insurance co at all) have taken 2 months - i'm in a loan X5 at £200 per DAY - so if we assume I'm quibbling over £4k they've spent more than that in hire car costs.... Mental.....

It would have been prudent to have hired a cheaper car to show you were actually trying to keep your incurred costs @ a reasonable level

 

[jfm]

Hi Ontheplane The problem with asking me is that you're going to get a complicated answer. So make yourself a cup of tea then read on . I don't strive for complexity by the way; it's just how it is

1. A crucial point to establish is whom you are making your claim against - you haven't said. You have 2 choices: (A) you can claim from your own insurer (assuming you have a decent fully comp policy) and that is a contractual claim. Or (B) you can claim from the other driver, who will likely delegate handling of the claim to his insurer, and that is a claim in tort for his negligence. I wont prattle on too much at this point about the difference between contractual and tortious claim as concepts, as it is unlikely to be relevant in this case. If you can tell me which of A or B you're pursing though, it would help narrow down the postings

2. Both types of claim are common. Many people call their own insurer who pays for their busted car, then behind the scenes pursues the other insurer and sorts is all out and gets a reimbursement. Type A. In the small print of your insurance policy you will have subrogated to your own insurer your right to bring a tortious claim against the other driver, and as a technicality your insurer uses that right to get the money off the other driver's insurer, but that is all behind the scenes as far as you are concerned. Claims management companies however often steer their cases towards route B, because there can be more in it for them in terms of commissions and so on from middlemen. The fees and commissions and kickbacks behind the scenes of RTA insurance claims, even ignoring the personal injury side, is a big industry.

3. I'm going to assume you have claimed from your own insurer, ie type A. This is a contractual claim. What you are owed depends on the terms of the policy but I'm 99.99% sure it will be a normal insurance contract where you're indemnified for your losses, which means insurer pays you the market value of the car that a buyer has to pay to buy the same car in a single transaction. That assumes a pukka proposal form as regards description of the car. There will be absolutely no reference to glass's guide in the policy; that is merely the tool the insurer use

4. I cannot comment on the strength of your case and evidence that your car is worth more than GG, but let's assume you are in good shape on that. Your route is (a) set out the detail of your demand to the insurer (b) if they do not agree, make a complaint under the procedure for complaints listed in the policy and say you will refer to FOS (Financial Ombudsman Service) if they don't budge (c) when you have their final rejection (and only then) refer to FOS. Insurers like to avoid FOS because your mere referral of the case to FOS triggers a series of expensive/hassly internal procedures they must follow and requires them to pay a fee to FOS. Plus, if they lose, they pay you 8% interest on the money (which aint a bad rate of return )

5. If still no joy then make the FOS filing. FOS is a double edged sword. If you have a complex contractual dispute they are imho just not clever enough to deal with the case. It's not like you have an erudite ex-supreme court judge or something looking at your case, rather it is a bunch of juniorish folks in a massive open plan office with a bit of a call centre flavour to it imho. BUT if the claim is actually simple, and you have a bunch of convincing evidence and Mr Jobsworth at insurer is just sticking to GG as dumb company policy then you will likely win. If you do go the FOS route there is more detail I'll give you. You have nothing to lose and it costs you nothing to do FOS (apart from delay in getting paid - 2 months if you finish at the "first round" caseworker/adjudicator FOS review and 6 months if you then appeal to the "second round" within FOS)

6. You don't want to do this but your final port of call is court. The size of your claim is the whole value you claim, rather than the delta between your demand and GG price, so this will not be done on the small claims track. Thus you face legal costs unless you're confident to litigate in person, and you face the other side's costs if you lose. Let's discuss that if you come to it

Anyway, in summary, there is no roadblock here - I mean there is no term in the contract or rule of law that says GG is the right answer. So just follow item 4 above and good luck

 

[jfm]

How much did you insure the car for, market value or did you specify to your insurance company the increased risk?

This raises an interesting point. I only referred to it briefly in my post above. If the increased value of OTP's car (above the GG value) is attributable to condition then OTP has no duty of disclosure on his proposal form. If it is because it has a £25,000 aftermarket stereo installed then he would have had to disclose that. BUT this requirement to disclose is only relevant so far as this is a claim from his own insurer (my "case A"). If OTP claims from the at-fault driver (my "case B") then it is a tortious claim, not a contractual claim under a uberrimae fidei contract. It then becomes irrelevant whether OTP omitted to mention the £25k stereo to his own insurer.

There is lots of devil in the detail...

 

[oGaryo]

Hi John, hope you've been keeping well.... hope the OP doesn't mind me riding on the back of this one

To complicate matters further I am going through a claim in tort following an accident I had last week so I have a vested interest in this one but from the perspective that the 3rd party insurers are handling my claim. I went this route as my insurer palmed me off with a middleman whom wanted me to sign a credit agreement and credit protection agreement for the hire and repair at inflated rates and a risk of repair delay, I felt uncomfortable in doing so, so I called the offending drivers insurers directly after confirming it ok to do so with my insurers and the other driver. They accepted liability and have taken on the repair work along with providing a hire car for the duration of those repairs. I have kept the legal proceedings with the company my insurers engaged to cover personal injury and none insured losses rather than putting that element in the hands of the 3rd party insurer.

Spookily similar current status circumstances in that my car is in the garage whilst awaiting assessment from the insurers. I want it 'not' to be written off as I've recently pumped a bunch of money into the car that I presume I'm unlikely to recover if they do. Any words of wisdom to hit the deck running with should they try to write off the vehicle ?

many thanks Gary

 

[silverdee]

Also Ontheplane that X5 you are in will almost certainly be a credit hire car not a courtesy car - you will be the hirer and although you are of course able to claim reasonable losses from the other driver (his insurers) it would be sensible to push for a timely resolution to your pre accident value dispute `cos it sounds like 12k plus vat and ticking for the credit hire. I am a v slow typist but happy to talk through if you would like- james.maxey@expresssolicitors.com.
Good luck sorting it.

 

[oGaryo]

Sorry John, there's one other bit that I omitted which I think is important, in fact, it overrides the comment I made relating to 3rd party liability. because other cars ran into the back of the car that ran into me, they want to apportion some of the cost of paying for my car to those other drivers. I have therefore agreed to conducting the claim without prejudice which I understand to mean that they are willing to sort out my car and my none insured losses but do not formally / legally accept full liability so that it allows them to pursue the other drivers for monies

 

[jimmy_the_builder]

Also Ontheplane that X5 you are in will almost certainly be a credit hire car not a courtesy car - you will be the hirer and although you are of course able to claim reasonable losses from the other driver (his insurers) it would be sensible to push for a timely resolution to your pre accident value dispute `cos it sounds like 12k plus vat and ticking for the credit hire. I am a v slow typist but happy to talk through if you would like- james.maxey@expresssolicitors.com.
Good luck sorting it.

Just a quick word in support of Silverdee - although he's an extremely rare poster here on the forum, this is very definitely his area of expertise and ontheplane and ogaryo you would be very well advised to seek his advice. Also, he has a boat, which he is threatening to bring to the Med so he needs encouragement...!

 

[silverdee]

Thanks for the ego boost Jimmy,
Just ordered 2x rather eye wateringly bankrupting John Deeres this very morning so maybe in Antibes or similar towards the end of the season.

 

[jfm]

Also Ontheplane that X5 you are in will almost certainly be a credit hire car not a courtesy car - you will be the hirer and although you are of course able to claim reasonable losses from the other driver (his insurers) it would be sensible to push for a timely resolution to your pre accident value dispute `cos it sounds like 12k plus vat and ticking for the credit hire. I am a v slow typist but happy to talk through if you would like- james.maxey@expresssolicitors.com.
Good luck sorting it.

Ah, thanks for chiming in Mr SilverDee To others on here, SilverDee is well known to me (understatement ) and is a proper expert* on car insurance matters so listen to him

*Though he wont mind if I claim neck-and-neck status with him on boat insurance having just won - for those vaguely following this 18 month saga - the case I was handling (for free) for the retired couple on scuttlebutt whose mast fell down @£20k and Axa refused to pay. I lost at both levels with the FOS referral, not because I was wrong but because the only basis I could pursue the claim on was so complex that the caseworkers at FOS didn't understand it - I've written on here before that the world's best lawyers don't work in call centres. Anyway, following a bit of further fancy footwork I finally won, just the other day. Seahope, it made your case look like a walk in the park mate )

 

[jfm]

Hi John, hope you've been keeping well.... hope the OP doesn't mind me riding on the back of this one

To complicate matters further I am going through a claim in tort following an accident I had last week so I have a vested interest in this one but from the perspective that the 3rd party insurers are handling my claim. I went this route as my insurer palmed me off with a middleman whom wanted me to sign a credit agreement and credit protection agreement for the hire and repair at inflated rates and a risk of repair delay, I felt uncomfortable in doing so, so I called the offending drivers insurers directly after confirming it ok to do so with my insurers and the other driver. They accepted liability and have taken on the repair work along with providing a hire car for the duration of those repairs. I have kept the legal proceedings with the company my insurers engaged to cover personal injury and none insured losses rather than putting that element in the hands of the 3rd party insurer.

Spookily similar current status circumstances in that my car is in the garage whilst awaiting assessment from the insurers. I want it 'not' to be written off as I've recently pumped a bunch of money into the car that I presume I'm unlikely to recover if they do. Any words of wisdom to hit the deck running with should they try to write off the vehicle ?

many thanks Gary

Hi Gary. Hope all well. I'll reply to your two posts separately.

You have a claim for your losses and that is a monetary amount equal to the lower of (i) cost of a full repair to your car plus tour other incidental losses like hire car etc plus your diminution-in-value loss; and (ii) market value of your car plus your incidentals like hire car etc

Therefore, strictly speaking, your pumping of money might not much change the answer, unfortunately. What you have to do is get the usual quote for a full repair but have in your back pocket an assessment of the vlaue of your car (including the effect of the money-pumping) so that if the repair cost is £10k and they say "We'll give you £8k because that is GG vlaue" then you must be ready as best you can with your assessment/evidence that it's actually worth £12k and GG is, like in OTP's case, an underestimate.

Beyond that, it's hard to say. SilverDee might chip in!

 

[jfm]

Thanks for the ego boost Jimmy,
Just ordered 2x rather eye wateringly bankrupting John Deeres this very morning so maybe in Antibes or similar towards the end of the season.

AND he bought an M5 at the weekend. A very nice M5

 

[z1ppy]

*Though he wont mind if I claim neck-and-neck status with him on boat insurance having just won - for those vaguely following this 18 month saga - the case I was handling (for free) for the retired couple on scuttlebutt whose mast fell down @£20k and Axa refused to pay. I lost at both levels with the FOS referral, not because I was wrong but because the only basis I could pursue the claim on was so complex that the caseworkers at FOS didn't understand it - I've written on here before that the world's best lawyers don't work in call centres. Anyway, following a bit of further fancy footwork I finally won, just the other day. Seahope, it made your case look like a walk in the park mate )

Slightly off topic but great work JFM, its amazing the power of the forum and the way in which people are prepared to go out of their way to help others, sometimes people that have never met!

 

[jimmy_the_builder]

AND he bought an M5 at the weekend. A very nice M5

So the question has to be, what is the seller of the M5 now driving? I hope it is a standard Mole Sud port car:

 

[Pinnacle]

AND he bought an M5 at the weekend. A very nice M5

I expect the seller told him it had never been raced or rallied!

 

[jfm]

Sorry John, there's one other bit that I omitted which I think is important, in fact, it overrides the comment I made relating to 3rd party liability. because other cars ran into the back of the car that ran into me, they want to apportion some of the cost of paying for my car to those other drivers. I have therefore agreed to conducting the claim without prejudice which I understand to mean that they are willing to sort out my car and my none insured losses but do not formally / legally accept full liability so that it allows them to pursue the other drivers for monies

Crikey that is complex, potentially. Your claim is against the at-fault driver, but you are plaintiff so burden of proof of your losses is on you. Normally proof is easy - you get quote from a bodyshop to fix your car and that's the answer.

But here, #1 driver ran into you and dented your car. No 2 driver then made the dent bigger. Your claim vs #1 driver is the cost of repairing the damage he caused. Your claim vs #2 driver is the cost of the overall repair minus the claim vs #1 driver. In other words, your claim vs #2 is the incremental loss he caused. Heck, you don't have a quote for a repair of only the dent caused by #1 and you never will have, so it is very hard to split the total repair bill between the separate insurers. So tread carefully because #1 insurer might pay 75% of the repair then tell you to pursue the other insurers for the rest. And that will be tough because the other insurers will say "Sorry Gary we disagree with #1 insurer and we think #1 driver's dent would have cost 95% of the repair bill and so here's a cheque for 5% and you need to go back to #1 insurer to get them to increase heir 75 to 95". #1 insurer might then refuse. erk.

If ever there was a case for claiming from your own insurer, this is it. I strongly suggest you flip to that method now, and claim all the repair from your own insurer, and let them argue it out with the other insurers. The fact you have started out claiming from the at-fault driver's insurance does not mean you cannot now switch horses. I'm suggesting you consider very carefully switching horses, and tell the at-fault driver's insurer you are handing the matter to your own insurer so they will hear from them not you, from now on

Where you write "conducting the claim without prejudice which I understand to mean that they are willing to sort out my car and my none insured losses but do not formally / legally accept full liability so that it allows them to pursue the other drivers for monies" I fear the words I have coloured might be wrong. It's perhaps not "them" who will pursue the other insurers. They might just pay you the 75% or whatever, and say "We've done our bit; you're on your own now mate as regards pursuing the other drivers in the pile up"

 

[sailorman]

Slightly off topic but great work JFM, its amazing the power of the forum and the way in which people are prepared to go out of their way to help others, sometimes people that have never met!

Will certainly 2nd that, well done again, jfm