Car accident - Category N

[Laughton]

My wife managed to drive through the hedge between our drive and the one next door. She's OK but the front of the car got a bit bashed up.

It's a 2014 Suzuki Jimny automatic. Originally the insurance company said they would repair it and sent their designated repairer to collect.

Now they say it's not economical to repair and they want to write it off.

A bit of negotiating and they've offered £9,400 (less a £150 excess).

It seemed crazy to me as the damage didn't seem all that bad (plastic front needs replacing, a small dent on the bonnet, the radiator and aircon compressor all need replacing hand sized dent on bonnet to repair).

Eventually the underwriters disclosed that the repair costs were £3,500 plus VAT, they would receive £2,900 from a salvage company. If we wanted to keep the car as is and get repairs done ourselves they would pay £6,336 (after deducting the £150 excess) but the car would then be listed as Category N (no structural damage but not economical to repair).

I spoke to the repairer who confirmed cost to repair is £3,500 plus VAT (presumably the insurer can recover the VAT element?).

How does this make any sense? What am I not seeing?

The insurer would be £2,000 better off having the car repaired and returned to us. The advantage to us is that we would then have a car not registered as a Category anything which would make insuring next time easier and should we ever want to sell it that would be easier too.

Someone please enlighten me.

[redsturgeon]

I spoke to the repairer who confirmed cost to repair is £3,500 plus VAT (presumably the insurer can recover the VAT element?).

I can only answer this part. My understanding is that insurance companies are not VAT registered

John

[Laughton]

Ah, thanks John.

I still can't make sense of it all. I make the figures look like this (I've ignored the excess as they get that in every event):

Car written off & Insurer gets salvage money - cost to insurer (£9,400 - £2,900) = £6,500

Car returned to us for repair at our cost - cost to insurer = £6,336

Car repaired by insurer and returned to us - cost to insurer = £4,200 including the VAT

[swill453]

Maybe they assign a cost to managing the repair process, and any potential problems arising from it.

For example, if you weren't happy with the repair then the whole process could drag on expensively for them.

A quick financial transaction to close everything off keeps things simple.

Scott.

[bionichamster]

Don’t forget if applicable to factor in the cost of a replacement hire car while it’s being repaired. This is an item that can have a significant cost in many insurance scenarios so if the car was away being fixed for a week or two it might account for a chunk of the difference?

Bh

[didds]

I sympathise with Laughton... and whilst this is of no help I've long reached the opinion that insurance and insurance companies rarely make any sense whatsoever.

As for insurance companies not being VAT registered... that must be a specific exclusion presumably - as otherwise they are surely a service company with profits likely exceeding the VAT threshold?

didds

[redsturgeon]

I sympathise with Laughton... and whilst this is of no help I've long reached the opinion that insurance and insurance companies rarely make any sense whatsoever.

As for insurance companies not being VAT registered... that must be a specific exclusion presumably - as otherwise they are surely a service company with profits likely exceeding the VAT threshold?

didds

More than you'd ever wish to know is here

https://www.gov.uk/guidance/insurance-notice-70136

John

[EssDeeAitch]

The insurer would be £2,000 better off having the car repaired and returned to us. The advantage to us is that we would then have a car not registered as a Category anything which would make insuring next time easier and should we ever want to sell it that would be easier too.

Someone please enlighten me.

I had a similar situation. The settlement offere to write off the car was considerably higher than the repair value (mine was a no-fault accident caused by another driver) and around 15% higher than the trade in value of the car. Even though I could have gained by taking the lower settlement value and having the car repaired, I just accepted the write off value.

It all seemed crazy at the time and still does but that's insurance for you.

And even though I was assured that my premiums would not be affected as it was a no-fault claim, coincidentally, the premium doubled ("no Mr SDH, nothing to do with the no-fault claim whatsoever") so of course I swapped out to another insurer.

[Howard]

I imagine your insurer has taken a view that substantial damage was done to the car as evidenced by the large initial repair estimate of £3,500. In their experience when the damaged parts are taken off, more damage may well be found. Dealing with repairers of five year old cars with severe damage is a bit like dealing with builders of home extensions. There is a risk of more expense coming to light once the process is started.

Insurers have more experience of the vagaries of car repair and assessing risks than any member of the general public. And they know more about repairing cars and the likely costs than even the most advanced car manufacturers. It's why they make profits doing it!

Obviously we can all have our opinions on their expertise. They are offering you the option of repairing the car and taking the risk of extra costs surfacing. You may think that is a risk worth taking but their experts with, presumably years of experience and the best technical expertise in car repair, obviously don't fancy your chances of a 100% successful outcome.

It's probably worth thinking ahead about future insurance costs too. Whatever happens, you are likely to be paying a lot more for insuring the car or its replacement over the next five years whether you stay with your current insurer or change to a competitor. So it is worth factoring that cost into your decision making.

I sympathise with your situation and hope you arrive at a decision which is satisfactory for you - but it won't be ideal.

regards

Howard

[bungeejumper]

ISTR that one of our number, back in TMF days, bought and fixed up a cosmetically damaged MX5 and had many years of fun with it? But, as others have said, a front-end knock can have unforeseeable consequences once you've got the bumper off, so you're taking a "known unknowns" risk if you do decide to take on the job.

About 15 years ago, I got rammed in the front wheel arch area by a Transit van that was doing an impromptu U-turn at the time. The other driver's insurance didn't deny responsibility and was actually very helpful in getting me sorted out swiftly. But as soon as they got the wheel off they found that the minor wing dent and the visibly bent offside wheel were only the start of the damage. The whole suspension and steering had been shunted sideways, and it cost them far more to repair the car than it was actually worth. (About double.)

They did it, though, and the repair was fine - as was the courtesy car that they provided. (It may have helped that I had ticked the legal protection insurance box.) Oh, for the long lost days when insurers actually did what they were supposed to do?

BJ

[Laughton]

The continuing saga - and an update.

I went along to the designated repairer today to have a chat with them with the benefit of being able to see the car at the same time. They'd already taken off the plastic front section (bumper) to have a good look at it. They'd also already had it up on a ramp and done a laser 4 wheel tracking assessment to find that there was no problem with the steering/suspension.

The main reason for the quite large repair estimate is the cost of parts. These come to £2,500 plus VAT.

The bonnet which has a smallish (actually smaller than my palm) dent in it - they don't bother tryng to repair which would have been the case in days gone by. They simply replace with a brand new one.

The plastic bumper - that's expensive because it's actually made up of 7 separate sections. There's a metal cross beam that the plastic bumper attaches to and the arms of this have crumpled slightly which is what they are designed to do so that needs replacing.

One headlamp has some scratching (it's still focusing and working correctly) but they would replace.

The radiator and fans need replacing and the aircon compressor has been quoted to be replaced although they said it is working fine and only it's fan needs replacing.

Paint - they explained is very expensive and they would have to paint the new bonnet and the surface scratching on the front wing.

And, of course, there's the commission that the repairer would have to pay the insurance company to take into account (amount not specified).

All I'm really trying to get across is what a huge amount of waste appears to be going on - no wonder insurance premiums are at the level they are.

Still contemplating.

[Howard]

All I'm really trying to get across is what a huge amount of waste appears to be going on - no wonder insurance premiums are at the level they are.

Still contemplating.

I'm paying substantially less than £300 a year to insure a new BMW 5 Series and it was less to insure an E Class Merc. My experience over the years is that insurance premiums aren't that bad if you have a good claims record.

They were bumped up a bit after I backed my wife's car into a lampost a few years ago.

It's probably worth shopping around if you think you are being overcharged. But as I said earlier, you will have to pay more after the damaged car as it makes economic sense for insurers to charge higher amounts for higher-risk customers. And, of course, Insurance Premium Tax and other recent Government legislation has added substantially to the cost of insurance premiums.

regards

Howard

[Laughton]

Protected No Claims Discount applies. Yes, I'm sure that'll be an interesting conversation come renewal in November.

But you're right, all our car insurance premiums have been pretty reasonable - if you're prepared to shop around.

[bungeejumper]

Yes, new bumpers have a habit of costing £1200 plus by the time they've been sprayed. But your local man will do the paint for about a third of what the insurance company would get charged - my mate recently paid £160 all in to have about a square metre of deeply grooved and scored metallic paint resprayed, and a minor bumper dent filled, and a small plastic tear fixed, and the result was impeccable. Would never have known it was there.

They like it even better if they've got a whole bumper to do, because the bumper comes off anyway and there's less finicky colour-matching to think about when they're doing the car from ear to ear. But these small guys don't go for insurance company repairs, they specialise in oopsies from punters who've run their cars into hedges.

Bumper: it's surely got to be available s/h from Ebay - there are plenty of scrappies selling through agencies in this way?

Headlamp - must be a plastic lens, or it wouldn't have scratched? If so, rubbing with Brasso will usually get the scratches out. If it's glass that's scratched, jeweller's rouge will do it.

It's been many years since my daughter wrecked her radiator (by disagreeing with an oncoming lamp post), but there was no shortage of new pattern parts at 1/3 of the manufacturer's cost. Mainly from some lock-up in Hounslow! If that's not your style, Halfords do them for not too much more. Fans, not so sure, but somebody like GSF or Euro Car Parts would probably chop your cost in three.

My first move would be to ask a local repairer for a quote, though. They'd need to see the car. Would that be possible?

BJ

[Gaggsy]

When my car was damaged by a 3rd party a couple of years ago, I offered the other party the opportunity to pay for the repairs but he said he was advised by his insurance broker to go through his insurance. The damage wasn't trivial so I had to contact my own insurance company.

On explaining that I had a witness they put me in touch with a company (Auxillis) that would arrange the repairs, arrange a replacement car, and claim the costs from the 3rd party. All would be paid for by them in the meantime, including insurance to cover them not being able to fully claim back all the costs. I had to pay the premium for this insurance which I think was £20 or maybe £50.

I asked the insurance company if this would count as a claim and would I have to disclose details when next year's renewal comes around. Answer: It wouldn't count as a claim as long as the costs were recovered from the 3rd party. Details are shared by all insurance companies so they would know that you'd been involved in an accident. Would they take this into account on your premium? They may look at where you had the accident and if they considered that this was a recurring problem and you kept having accidents in the same street, then maybe your premium would go up.

If I remember correctly, I was quoted about £1,000 by a recommended local bodyshop to repair the damage. Instead, using Auxillis, the final costs to the insurance company, including courtesy car at about £360/day, I calculated at about £7,500. A ridiculous waste of money. But you can bet all the people along the chain were making a nice profit out of it.

[Howard]

My first move would be to ask a local repairer for a quote, though. They'd need to see the car. Would that be possible?

BJ

You are absolutely right.

I should have added to my earlier post that if one has a scrape with an inanimate object, it is always worth getting a quote from a local paint shop. Mrs H and I have had one or two of these over the years and the repairs have cost very little. If they had been repaired through an insurance claim, the cost would have been much higher, both to the insurer and then to me through higher premiums for several years.

The bump in my wife's Merc at around 1mph did an amazing amount of damage, cracking the rear bumper. I did get estimates, but in the end decided that it was better to claim from the insurance. The reason for the damage, I was told by the experts, was that I chose a very cold, frosty night to hit the only post in the car park and the plastic was therefore more brittle than it would have been at normal temperatures.

regards

Howard

[Laughton]

I thought I'd update this for anyone who might be remotely interested.

In the end the insurance company was persuaded to make a cash settlement of £5,600 for us to undertake the repairs ourselves and agreed that they would not mark the car as Category N (or any other category).

The insurer's approved repairer (they already had the car at their workshop) agreed to do the work for us for £3,300 incl VAT. There are a few items which they say are perfectly serviceable but which were scratched (radiator, aircon compressor) and therefore would have been replaced if they'd done the work for the insurer. They will touch in the scratches and defy me to find the faults. The headlamp will be polished and they guarantee it will pass an MOT with no advisory.

My wife is happy that she will have her car back. I'm happy that I won't have to spend weeks searching for a replacement. Presumably the insurance company is happy that it's settled for slightly less than had they written off the car.

The extra settlement can go towards the anticipated increased premiums for the next few years.

One thing that I do now realise and hadn't appreciated before. The protected NCD is just that - it protects the 9 years "discount". So at renewal the premium will go up to reflect the accident and we will then get our protected discount on that increased premium. For some reason I'd always thought that I was protecting the no claims history (so that the premium would be calculated as if we had not had an accident for the past 9+ years).

[staffordian]

One thing that I do now realise and hadn't appreciated before. The protected NCD is just that - it protects the 9 years "discount". So at renewal the premium will go up to reflect the accident and we will then get our protected discount on that increased premium. For some reason I'd always thought that I was protecting the no claims history (so that the premium would be calculated as if we had not had an accident for the past 9+ years).

Yes, an important point, and the main reason I don't protect mine. Call me a cynic, but I'm entirely unconvinced that protecting a discount would save much given the fact that the underlying premium can be loaded by however much the insurer wishes.

[Laughton]

Yes, when discussing the point with the broker (RAC) I did say "yes but that means you can just increase our starting premium by 4 or 5 or 6 or 7 times and then allocate our 60% NCD to arrive at a final premium far in excess of this years.

No, he said, that would be just silly.

We shall see come November (I rather think that staffordian might be right).

[bungeejumper]

My wife is happy that she will have her car back. I'm happy that I won't have to spend weeks searching for a replacement. Presumably the insurance company is happy that it's settled for slightly less than had they written off the car.

Good result, by the sound of it. Better the devil you know, every time. Definitely beats having to go out and buy an 'equivalent' car from some stranger who might not tell you everything he knows about it.....

The only time we had a write-off was when my wife's two year old Metro (yes, it was that long ago.....) was rear-ended by a great big Volvo at a roundabout, and the bodyshell impact was so bad that she could hardly get the driver's door open after the crunch. (Think about that )

As expected, the car was duly written off, which was a bit of a relief since it had had terrible starting problems since it was new. What wasn't expected was that she got a letter from DVLA some months later, informing her that the badly bent car had been sold to somebody as a restoration project, and did she have anything to declare about it? Nope, being a bad starter wasn't considered to be declarable matter....

God help whoever decided to fix it. We were powerless to prevent it.

Good result, anyway, OP!

BJ