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UK Car Insurance - How Do Insurance Companies Decide To Write Off A Car

What do we mean by a write off or total loss? It happens where the repair cost is greater than the worth of the vehicle, taking into account the salvage value.

So lets say that your vehicle is badly damaged. It might have arisen from a fire,an accident, or damage following a theft. And it costs, say £5,000 to repair it. If the current value of your vehicle is for example £5,500 and the salvage is worth £600 then it is cheaper for your insurance company to total loss the car rather than repair it.

Suppose the salvage is only £400. The chances are the insurers will still total loss the vehicle. The estimated £5,000 repair cost is based on a preliminary inspection and assessment of the repairs that might be needed. There could be more damage found if it was stripped down. So even though it looks cheaper to repair the car it would be treated as a border line total loss.

They will want to move the damaged vehicle into 'free and safe storage'. This is usually at a salvage dealer. Their reasoning isn't difficult to follow. The vehicle repairers have discovered there is a fast buck to be made. They won't be appointed as the repairer but they will bill your insurance company just for keeping your car on their premises. Some charge extortionate daily rates that can make car clamping fees seem like peanuts! Even the lowest rates are at the same level as car parking fees in Central London. Insurance companies pay out vast sums every year for storage charges so they need to move the vehicle FAST!.

Because a few policyholders have caused problems and cost them unnecessary money they might simply inform you that they are planning to move it in 48 hours rather than asking your go-ahead. What has occasionally happened is that the salvage people are so fast off the mark that the salvage truck is collecting the car before they've even told you that it is a total loss!. Not surprisingly this can be upsetting to some customers.

But thinking about the reason, please be sympathetic! The insurers aren't disposing of your vehicle, just moving it to save money. You might ask why you should bother about saving your insurer money? The answer is very straightforward. The more money that the insurer pay out on claims, the more you pay for your insurance. It is in your interest to help them save money. My advice is simple- do as they ask. Always agree to have your vehicle moved from a repairer. If you refuse, they can insist you pay the storage charges from the date of your refusal.

Sometimes when dealing with an older car, it can be a total loss yet remain safe and legal to drive. Maybe it has a low value and only slight bodywork damage. Frequently the insurance companies will give permission for you to keep this at your house whilst the next steps in the procedure take place, provided that it isn't incurring any charges.

Article Source: http://www.topicinfo.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 instant online insurance with online quotes and secure online payment.

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