Replacement
The insurer’s option to replace in lieu of repairs or
cash payment is seldom exercised. Such a course of action
may appear attractive where difficulty has arisen over the
amount of a cash settlement, but experience proves that the
policyholder nearly always contends that the replacement vehicle
is not as good as that which was damaged. If the policyholder
can bring evidence to support this contention the Car Insurers
may have to make a cash payment as well.
Foreign vehicles
Difficulty in obtaining new parts arises in connection with
some foreign vehicles. Insurers are not responsible for any
delay which may arise in such circumstances. Serious damage
sustained by such a car may lead to a demand by the policyholder
for a cash payment. Any payment should not exceed the probable
cost of repairs and parts.
Delay over repairs
Some older vehicles are comprehensively insured, and these
can give rise to problems in obtaining new or reconditioned
spare parts. Engines and other parts for old models may be
out of production, with the result that repairers must rely
upon salvage dumps and similar sources. The alternative is
to have parts specially made, which increases the cost of
settling the claim.
Obsolete-parts clause
Sometimes there is incorporated into the policy an obsolete
parts clause. The effect of this is to limit the insurer’s
liability for the cost of replacing any part not obtainable
from stock to the maker’s last list price, plus the
present cost of fitting.
Market Value
It may be difficult to agree the pre-accident value of a private
car when it becomes a total or constructive total loss.
Values
of cars, particularly new cars, may fall fairly sharply, often
as much as a third in depreciation and this is not always
fully appreciated by the owners.
The policyholder may be asked to produce evidence, such as
an engineer’s report, to support his view of the value
of the vehicle at the time of loss. Every effort should be
made by the car insurance company to reach agreement with
the policyholder, but if this should prove to be impossible
the matter would be referred to arbitration in accordance
with the policy conditions.
In times of inflation some vehicles may
appreciate in value, for example, a car in short supply if
obtained at maker’s list price can often be sold for
more than was originally paid, similarly it is not uncommon
for cars three or four years of age to be sold for little
under their cost price due to the increasing cost of the new
model.
Replacement cost is, therefore, sometimes difficult to assess
and negotiations can be long winded. The diligent car owner
will normally be well-documented on this subject and may have
retained garage accounts and the like to prove that his vehicle
had been well-maintained, serviced and so on; these documents
will normally act as ample evidence to support the insured’s
view of the value of his vehicle at the time of the loss.
See also : Total
Losses
If you are looking for information on how
to claim or what to do in the event of an accident please
visit your particular insurers website by following any of
the links on this site.
For helpful information on what to do in the event of an accident
we suggest you read our accident
claims page.
Car Insurance Claims
Frequently asked questions
What
should I do if I have an accident
Where
can I find an Accident Claims Solicitor
What is the role of
the Motor Insurers Bureau
What are Car Insurance Claims?
How is
the Claim Process controlled?
Fire
Theft & Acident claims explained
What is on
a Claim Form?
How do
I know I'm if I'm covered
Why
would a car insurance company deny liability?
What
is an Insurable Interest
How
do I go about getting the damage repaired?
What are approved
repairers?
Who pays
for towing charges?
What happens
if my car is a write off?
Who decides
my cars market value?
What
was the World's worst car insurance claim?
|
UK
Car Insurance Online
