posted 5 years ago

Car Crash Victims Could Receive Lower Payouts

New Guidelines Might Frustrate Owners Of Old Cars has revealed that motorists with old/damaged cars might now receive surprisingly small, post-crash, insurance payouts. Why? Because the Financial Ombudsman Service – which resolves disputes between insurance companies and their customers – has recently issued the industry with a new set of guidelines. These emphasise that an insurer might be within its rights not to pay the total cost of a repair. The company, after all, only has to put the claimant back into the position he/she was in before the collision. This means the insurer might limit a payout to cover accident damage to a component - but not any associated parts that have to be replaced or repaired alongside as a result of wear and tear. So, let us consider a real-life example. The Financial Ombudsman Service recently found in favour of an insurance provider that refused to fully repair a car that was seriously corroded before its accident. Why? Because the insurer claimed that to rectify the collision damage the rust had to be repaired alongside at a total cost of three-thousand pounds. The insurance company, however, only offered the motorist five-hundred pounds to address the accident damage. It was then the claimant's responsibility to cover the entire cost of repairing the corrosion, as it was not the insurer's role to enhance the vehicle's pre-collision condition.

The Role Of The  Financial Ombudsman Service

The Financial Ombudsman Service is a state-backed impartial body that resolves issues between customers and a wide range of financial service companies. As such its areas of expertise include: insurance, mortgages, credit cards, store cards, pensions, savings, stocks, shares, unit trusts, bonds, and payment protection insurance, etc. So, if a motorist is unsatisfied with the service he/she receives the first step is to try to resolve the issue with the insurance provider. If this is not possible within eight weeks he/she can contact the Financial Ombudsman Service. This body will then listen to the motorist's complaint and consider the service provider's perspective. Pleasingly, the motorist does not require any legal knowledge. The ombudsman will then decide on a reasonable course of action that it has legal powers to enforce. This process typically takes a few months although simple cases can be resolved within days or weeks. Complex issues, in contrast, can take more than a year. This service is free for consumers. 


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My 2000 volvo v70 2.4 se turbo we written last month.hit from rear no fault opf mine.166,ooo on i could get£1080

Why do insurers want your estimate of the value of your vehicle? If you write the vehicle off in an accident they will decide how much it is worth and pay out accordingly. So what is the point of this meaningless exercise?

april 2013 ripped of by privilege ins ombudsman involved no satisfaction two years previous lv ins sharks is best way of description

I drive a 16 year old car.I would be quite happy if the insurance company replaced damaged panels with good condition genuine second hand parts

You write to them not to re-new your policy, return from your holiday to find you have gone overdrawn at your bank through no fault of your own, because they have automatically renewed your policy, cant they read anymore, or are they just used to small print How are they allowed to re new a policy like this without any up to date information. I could have died, been caught over the limit, lost my licence, any thing, yet they carry on taking your money. This was the Budget insurance company. No company should be able to retain your bank details, enabling them to withdraw funds whenever.

Its in the hands of the greedy insurance companies, ever since the Labour government started to use the motorist as a cash cow every other organisation from town council to insurance companies has jumped on the bandwagon, and year on year the greedy insurance companies put up premiums. When it costs around £1000 and upwards for a young person to insure a small car no wonder many of them don't bother as fines for driving without insurance are generally in the line of £200 and that's if the young miscreant is able to pay. I have often wondered why the motor manufacturers have not offered a fair priced insurance on their own product in direct competition with the insurance companies, if they did that they would sell more cars being in a position to repair them at cost, and the insurance companies would loose a more than lucrative business.

The insurers are quite right in this case. Other motorists should not have to repair rust and rot in other peoples cars.

Recently had a Honda CRV written off whilst parked outside my house. Was offered £3,330 after a lot of haggling with the insurance company, originally offered £1,800. Had evidence that a like for like replacement would be £4,000 - £4,500 not counting the cost of petrol etc to go and look at it and then pick it up. Complained to the Financial Ombudsman who agreed that the price offered by the insurance company, from a trade catalogue guide which you and I cannot even see, was fair. Anyone know a garage who sells cars to the public at these trade prices? Would be a nice earner for the insurance companies to go into car sales, they would make another £1,000 off you by paying the low settlement and selling you a replacement vehicle for the real life cost. How do they get away with it?

Is this yet another reason for the recent and in some cases reduction in premiums? I can only comment that it appears that it is essential top request and pay for additional benefit (as I am sure insurers will declare it) of the legal protection service. It looks like those of us with older cars or even those with cars over 3 years old are going to need this - more rubbing of hands by the legal profession and ultimately higher costs of the cover and may yet be another area for ambulance chasing legal people. Poor decision by FOS in my opinion which will lead to protracted claim processes increased costs and no guarantees on recovery of actual costs!

What about insurance companies that only pay market value for write-offs? Does this mean I no longer need to buy gap insurance when trading in cars? Will this mean the end of insurers only paying minimum payouts if they have to get you back into a position before an accident? Or is this only for old 10 yo bangers. Another way for insuranc companies to avoid paying out....

Insurance is becoming more and more of a rip off. I've insured all my cars since I past my test. I currently have 10 years no claims bonus including no windscreen claims. Therefore I have paid out ove £6000 on car insurance. If I crashed the car I currently have which is the car I have gained 10 years no claims in then I would not receive £6000 as the car is only worth £1200. So they have made £4800 profit from me for being a safe and considerate driver. But I see no discounts from insurers for this 10 years of claim free driving if anything my insurance has gone up year after year. Car insurance is a complete con and the system needs to be addressed to make it fairer on the driver as we have no choice in car insurance as we have to have it by law. The whole system sucks.

will insurance then become cheaper if they are not paying so much on claims ?

The insurance companys are taking the right Micky out of us drivers.

Think this depends whether you are the third party who is suffering a loss due to someone else's negligence and claiming on their insurance. If so then your car needs to be put back, as far as possible, as though the incident never happened. Even if this means they have to pay for items that had to be replaced even if you gain by having new parts for old. If the accident was your fault - then you shouldn't gain by it.

The law states that the insurer must put the insured back in the position he/she was in prior to the insured event. This is the law, the insurance companies don't like it but that is what they have to do. Most people don't stand up to the insurers and let them get away with cheating drivers out of proper repairs and do what this article talks about. If your car is damaged the insurer must put you back in the position you were in prior to the accident - that is the law.

A lorry ran in 2 the side of my car and pushed me over in2 another lane and in2 side of another lorry my car a rite of but y ill never understand 05 ford focus 1400 petrol with only 73000 on clock damage done broken passenger wing mirror and damage 2 drivers door and the back panel and all I got was 1600 and not even a scratch on lorry pushed in2 but the 1 that hit me had hardly any damage either just some scuffs on his bumper but he's getting away with dangerous driving and I pay insursance companies wot a laugh if I thought I could get away without it I would such a waste of money

Insurance are not wont to pay foe any damege!Aftey my accident my 4 year old car car value £20000 on new just pay out on insurance £4000after my nervs . I pay my insurance for over 10 years and if i save my money i can purchase new car after my accident not a wait 4 months for payment ! Thay due all to pay you less not mater if car made very goog condytion and month before has 4 new tyres costs £800 and service £350! Insurance is a big lay!! Wont to keep much as possible money for self!!

If that's the case, why do insurers never reduce a vehicle's value when cslculating the premium for a renewal? My previous insurers kept insisting my vehicle was still worth the price I paid for it when new (although I guess if it was the subject of a write-off I wouldn't have received anywhere near what they were insisting it was worth!!)