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

What does an insurer mean by a write off or total loss? It arises where the repair cost is greater than the worth of the vehicle, including the salvage value of the damaged car.

So lets say that your vehicle has been severely damaged. This might be the result of a collision, a fire, or theft damage. And it costs, say £5000 to repair it. If the current value of your vehicle is say £5,500 and the salvage is worth £600 then it is cheaper for your insurer to write off the vehicle rather than pay to repair it.

Suppose the salvage is only £400. There is every chance that the insurers will still write off the vehicle. The estimated cost of £5000 to repair is based on a visual inspection and assessment of the repairs that are needed. There is every likelihood that there would be more damage discovered once it was stripped down. So although it looks as if a repair is financially viable it would be regarded as a border line write off.

They will ask to move the damaged vehicle into 'free and safe storage'. This is normally at a salvage dealer. The reason is simple. Vehicle repair companies have cottoned on that there is easy money to be made. They won't be given the repair job but they will bill your insurance company simply for holding your vehicle in their yard. Some charge outrageous daily rates that might make vehicle clamping fees seem like peanuts! Even the lowest charges are similar to car parking fees in Central London. Insurance companies pay out vast amounts of money each year for storage charges so they prefer to move your vehicle as fast as humanly possible.

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 requesting your permission. What has occasionally happened is that the salvage people move so quickly that the car is being picked up by the salvage truck before they've even told you that it is a write off!. Hardly surprisingly this can cause upset to some customers.

But taking into account the circumstances, please be understanding! The insurance company aren't disposing of your vehicle, just moving it in order to lower costs. You might ask why you should worry about saving money for your insurer? The answer is logical. The more money that the insurer pay out on claims, the more you pay for your insurance. It is in our best interest to keep their costs down. My advice is simple- do as they ask. Always agree to have your damaged car moved from a garage. If you don't, they can force you to pay the storage charges from the point of your refusal.

Occasionally when dealing with an older car, it can be a write off yet remain perfectly safe and legal to drive. Maybe it has a low value and only slight bodywork damage. Often insurers will let you keep the car at your house whilst the procedural cogs keep turning, provided it is not incurring any charges.

Article Source: http://www.uberarticles.com/articles

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 uk motor insurance with online quotes and secure online payment.

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