Insurance Claim Question

pdw8 · 18 Jul 2008 at 07:17

A friend's car was recently rear ended and the insurance company has assessed it and confirm its been written off.
Anyway, he bought the car, a Zafira(has 3 kids) new from a Vauxhall dealer but he got a really good one off discount on it so instead of list price of £21K paid nearly £16K. He insured it for the full value of £21K and the insurance company have saod they will pay £18.8K which is a good offer for a year old model.
The problem is they have asked for the sales receipt but that will show the sale price as £16k. He is now worried they will either totally reduce the offer or even invalidate his policy for misleading information.
Should he be worried?

Cheers.
Paul

JRS · 18 Jul 2008 at 07:29

pdw8 said:
He is now worried they will either totally reduce the offer or even invalidate his policy for misleading information.
Should he be worried?

We-e-ell, the £16k was a special deal as you say. The car was 'worth' £21k when he took out the policy. And to be put back in the same position as he was pre-accident (which is what insurance is for, after all) would cost the value of a year-old Zafira + X - where X is the amount to sweeten it for the hassle of replacing a car he wasn't planning on replacing. So £18.8k doesn't sound so far off (although it's still a horrendous amount to pay for a pretty ordinary car, but that's a different argument).

If the insurance company was to go off on one, then he should point out how much it'll cost to get back to the position he was pre-accident (i.e. owning a year-old Zafira) and make sure they pay out enough to get to that position.

Dano · 18 Jul 2008 at 07:45

What it is worth and what he paid for it are seperate entities, it's not at all misleading, he got a bargain and insured it for what it was worth.

SB118 · 18 Jul 2008 at 08:10

Dano said:
What it is worth and what he paid for it are seperate entities, it's not at all misleading, he got a bargain and insured it for what it was worth.

Spot on, we bought the wifes 306 DTS for £267, some idiot wrote it off, their insurance paid out the market value of £1050.

gillywibble · 18 Jul 2008 at 08:54

He'll get market value so don't worry.

Raymond Lin · 18 Jul 2008 at 09:10

Sue the other guy for whiplash for rear ending you for another £1,500

philjohn · 18 Jul 2008 at 09:36

If the insurance company starts trying to play hardball your friend needs to get the Ombudsman involved.

When some idiot wrote my wife's car off they tried to shirk out of paying - one letter to the ombudsman had a grovelling letter from someone very high up at Endsleigh and an offer for just over full market value for the car. This is one case where the regulator really does have bite to match its bark.

pdw8 · 18 Jul 2008 at 10:36

Raymond Lin said:
Sue the other guy for whiplash for rear ending you for another £1,500

Funnily enough he did have to visit the local A&E with whiplash injuries and its all documented so I will let him know he can claim for that as well.

Thanks for the replies, this will help put his mind at rest.

Raymond Lin · 18 Jul 2008 at 10:43

pdw8 said:
Funnily enough he did have to visit the local A&E with whiplash injuries and its all documented so I will let him know he can claim for that as well.

Thanks for the replies, this will help put his mind at rest.

Get reciepts for all journeys, prescriptions, physiotherapy treatments, and he can claim for those back as well.

Hutch · 18 Jul 2008 at 12:49

Yeah the principle is that if you incur any costs as a result of an accident which is not your fault then the insurer for the person who is at fault are liable for them

As the others said, most insurance policies are market value, but he probably shouldnt find that receipt. The principle of insurance is that he should be put in the same financial position following the accident as he was before it. While he could argue that it would cost him more than he paid to replace the car, it might complicate matters.

Most insurers dont require a receipt to deal with this sort of claim (though they do ask for it), so might be best telling them he cant find it..

philjohn · 18 Jul 2008 at 12:57

Problem with not handing the receipt over is if/when they find out why (i.e. the price paid initially was low) you're looking at them not paying out and a possible fraud charge.

Always be open and honest with insurers, they have many ways of legally screwing you.

If when you hand over the receipt they try and offer a low-ball figure, you can then legally screw them (via the Ombudsman).

JRS · 18 Jul 2008 at 13:15

philjohn said:
Problem with not handing the receipt over is if/when they find out why (i.e. the price paid initially was low) you're looking at them not paying out and a possible fraud charge.

Sorry? On what possible level is it fraud?

When the guy bought the car, the market value was £21k. He insured it for £21k, and presumably wasn't asked explicitly at the time "did you actually pay this much or did you get a deal on it?".

Hutch · 18 Jul 2008 at 13:22

They would have asked him what his car was worth when they incepted the policy, it isnt like he is lying, the car is worth what its worth, not what he paid for it

Same principle works in reverse, if you pay over the odds you dont get back what you paid..

DannyDan · 18 Jul 2008 at 13:47

pdw8 said:
Funnily enough he did have to visit the local A&E with whiplash injuries and its all documented so I will let him know he can claim for that as well.

Thanks for the replies, this will help put his mind at rest.

Yup, make sure he gets that obligatory whiplash claim in

£££££££££££

stoofa · 18 Jul 2008 at 14:15

pdw8 said:
Funnily enough he did have to visit the local A&E with whiplash injuries and its all documented so I will let him know he can claim for that as well.

Thanks for the replies, this will help put his mind at rest.

NO, no, no, no - this is not America......yet.
If your friend suffers from whiplash injuries (and he will know if he does) then he can make the claim he is entitled to do.
You don't just claim for that as "something else to add".
Doing that raises everyone's insurance.

philjohn · 18 Jul 2008 at 15:50

JRS said:
Sorry? On what possible level is it fraud?

When the guy bought the car, the market value was £21k. He insured it for £21k, and presumably wasn't asked explicitly at the time "did you actually pay this much or did you get a deal on it?".

If you intentionally set out to mislead the insurers when making a claim this would very much be fraud.

If they find out you paid less and deliberately witheld that information from them they may also have clauses that could invalidate the policy. Telling them however, should not leave you any worse off as they have to replace like for like - i.e. pay current market value for a car of that age and mileage.

allllec · 19 Jul 2008 at 10:04

When he insured the car he told them how much it was worth, not how much he paid. I see no fraud here! :cool:

SB118 · 19 Jul 2008 at 11:25

allllec said:
When he insured the car he told them how much it was worth, not how much he paid. I see no fraud here!

Exactly. If a parent gave their child a car as a gift, the car cost the child nil, but it could be worth 15k at market value. I'm pretty sure the insurers can't come back to you with "push off, you didn't pay for the car yourself" can they.

Mr Footlong · 19 Jul 2008 at 11:40

stoofa said:
NO, no, no, no - this is not America......yet.
If your friend suffers from whiplash injuries (and he will know if he does) then he can make the claim he is entitled to do.
You don't just claim for that as "something else to add".
Doing that raises everyone's insurance.

Amen.

[TW]Fox · 19 Jul 2008 at 11:41

The value you give your insurer is meaningless anyway.