Getting involved in a car accident is a traumatic event in itself, so the news that your vehicle is irreparably damaged will never be an easy pill to swallow.
While insurance will undeniably mitigate this blow, the reality is that there are so many variables involved in dealing with a write-off and many people – even those with the seemingly broadest insurance policies – feel like they are hard on.
“Not an exact science”
This is according to Christelle Colman, Managing Director and Founder of Elite Risk Acceptances, who says it can help policyholders better manage the claims process and avoid damage if they are informed about the process used by insurers in the event of a car write-off unnecessary financial loss is pursued.
“As a rule, an insurer classifies a car as depreciated when the repair costs are high or higher in relation to the insured value. However, this is not an exact science and depends on the make of car, registration date and mileage. Even the popularity of the car can play a role here as it affects the availability and cost of repair parts, “says Colman.
Have you ever been in a situation where your car was written off and your insurance was giving you trouble? Email us your story
Colman gives the example of an imported car that can suffer relatively minor damage, but because of the high repair costs, insurers choose to write off the vehicle.
“In this case, paying out the full value of the vehicle costs less than repairing the damage. The insurers are also entitled to the rescue and reimburse part of the damage costs from the rescue dealer within the framework of their agreements. “
However, it does warn that some premium insurers will replace a car with a brand new one if it is written off within the first year or two of being registered.
Factors to Consider
“While the elite policy offers“ new for old ”within the first two years after a car is registered, this benefit is not always included in other motor insurance policies.
“If this“ new for old ”benefit doesn’t apply, insurers tend to pay the full retail amount minus any deductibles in cash after a total write-off, which is another very important aspect. Too often policyholders only learn of high deductibles. “Loss-time structures when they are not prepared to make the payments,” explains Colman.
Differentiating between retail, market, and book value, and knowing what value a car is insured for, is another issue that Colman says is causing undreamt-of confusion among policyholders.
“Unfortunately, even some insurers seem to have different definitions of market, book, retail, or guaranteed amounts insured, so my advice would be to document this question and make an informed decision with your insurer or broker,” she says on saying .
“With Elite you have the choice of insuring your vehicle at the retail value (as from the various independent data sets that are available to us as insurers) or at an agreed value at which the vehicle is considered to be a classic.
“You can also choose to guarantee the vehicle’s retail value for 12 months, which means that if you write off the vehicle within the first year, you will not be penalized for the vehicle’s depreciation,” explains Colman.
If the accident was caused by someone else, Colman says an insurer will usually initiate third party compensation on behalf of the policyholder.
“If the recovery is successful, the policyholder will be reimbursed the deductible and the record will be restored with no claims.
“So it is important to have all the information at the scene of the accident, including photos of the scene and the vehicle, as this can be very helpful in successfully recovering damage caused by a third party,” she adds.
Finally, Colman urges people to check and understand if their policy covers a replacement vehicle in the event of a write-off.
“This extension is included in the elite policy, but is often optional and comes with an additional premium. We find that policyholders are often unable to do their job or perform their duties because the insured vehicle is either in long service repairs or waiting after a write-off, “she concludes.