Home | Insurance
What does an insurer mean by a write off or total loss? It arises when the repair cost is greater than the worth of the vehicle, taking into account the salvage value. Let's assume that your vehicle has been badly damaged. It could have arisen from a fire, or damage as a result of a theft. Let's pretend that it costs, say £5,000 to repair it. If value of your vehicle is for example £5,500 and the salvage valuation of the wreck is £600 then it is cheaper for your insurance company to write off the vehicle rather than pay to fix it. Suppose the salvage valuation is only £400. There is every chance that they will still total loss the vehicle. The estimated repair cost of £5,000 is based on a external inspection and estimation of the repairs that are needed. There is every likelihood that there would be more damage found once it was stripped down. So even though it looks cheaper to repair the vehicle it would be treated as a border line total loss. They will request to move the damaged vehicle into 'free and safe storage'. This is normally at a salvage dealer. The reason is simple. Repair Garages have cottoned on that there is a fast buck to be made. They won't be given the repair job but they will bill your insurance company just for keeping your vehicle in their yard. They will sometimes charge incredible daily rates that would make car clamping fees seem like peanuts! Even the cheapest rates are at the same level as car parking fees in Central London. Insurance companies pay out millions of pounds each year for storage charges so they want to move the vehicle FAST!. Because they lost sums of money dealing with certain customers they might simply inform you that they are going to move it in 48 hours rather than requesting your go-ahead. What has occasionally happened is that the salvage people move so quickly that the salvage truck is collecting the car before you've been informed that it is a write off!. Not surprisingly this can be upsetting to some customers. But taking into account the reason, please be sympathetic! The insurers are not disposing of your vehicle, just moving it to lower costs. You could ask why you should worry about saving your insurance company money? The answer is logical. The more money that the insurance company pay out on claims, the more you pay out on premiums. It is in all of our interests to keep their costs down. My advice is simple- help them. Always agree to have your vehicle moved from a repairer. If you don't, they can force you to pay the storage charges from the moment of your refusal. Sometimes with an older car, it can be a total loss yet still be perfectly safe and legal to drive. It might have a low value and only some minor cosmetic damage. Often insurers will let you keep the car at your house whilst the next steps in the procedure take place, provided that it isn't clocking up any storage charges.
Article Source: http://www.financemanual.com
This article was written by Terry Cod. He has many years of experience working as a claims adjuster with a number of UK insurance companies. His website www.instant-online-insurance.co.uk offers online uk car insurance with online quotes and secure online payment.
Please Rate this Article
5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
