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Home | Automotive | Insurance
UK Motor Assurance - We Detail The Complete Process
By: Terry Cod
A car is written off when the estimated repair cost is more than the current valuation of a similar car. Once the insurer decides that the car is a write off then they begin the process described below.
1) The car will have been transported from the repairers to a salvage merchant. This has been done to reduce storage costs charged by car repair businesses for vehicles on their property.
2) The insurance company will ask you for the vehicle documents. That is the purchase receipts, MOT certificate if your car requires one, service records, keys,V5 registration document and details of any outstanding finance. They will ask that you return your certificate of insurance. They will need the original paperwork before they settle your claim. Photocopies to start with will suffice but will slow down the process.
If you ask the insurance company why they require all of this paperwork, they will likely tell you they need to ensure they have the right model of the car, that it had a valid MOT and some sort of a service history to make sure that is has been maintained. These are all appropriate reasons. However the insurers also want to check out your claim for being fraudulent. Government documents have several anti-fraud measures built into them by the issuing Government department. Careful perusal of the documents will enable the claims official to quickly determine that these are genuine documents and not fake. If there is doubt, they can use forensic science equipment to validate that the documents are fake or genuine. You would need to be a very clever villain to forge successfully all these documents. My advice is - let the company have the original paperwork as soon as they request them. Just sending copies delays your claim.
3) Whilst you are awaiting your settlement details, your insurance company will be doing other things as well. They will record the claim on the 'motor insurance anti fraud and theft register'. (MIAFTR) This is a UK data base that has been recording all insurance total loss vehicles and stolen cars since the early 1980's. It checks your car against all the information in the database to see if it has ever been written off before, or whether it has ever been stolen and not recovered. The computer checks against your name and address; post code; your vehicle's registration number and VIN (vehicle identification number). If any details match further questions will be directed towards you, and your insurer might go into a fraud investigation.
MIAFTR also as a matter of course checks your vehicle against the Hire Purchase Information (HPI) database. If you took out finance to purchase it and you still owe money, it will be on this database. And your insurance company will discover it. So be honest and tell them about your outstanding balance. The loan company is the legal owner of your vehicle. Any settlement must be made to them until the loan is paid off. Whatever is left goes to you. Similarly, your claim will be noted on the Claims & Underwriting Exchange (CUE). This happens as a matter of course on all vehicle and household claims. Not all insurers subscribe but the vast majority do.
Problems occur where the outstanding balance of the loan exceeds the value of the car. In this situation the insurance company does not pay off the loan in full. I recall a purchase plan for motorcycles. Youngsters went into a shop, bought a new motor cycle plus all the leathers, helmets and so on with money borrowed against the value of the bike. The interest rate on the loan was incredibly high. A few days later there was an accident and they would total loss it (or it was stolen). The value of the motor cycle was much less than the combined purchase price plus the interest. It caused a furor which was blamed on the insurance company rather than the stupidity of the youngster for getting involved in such a bad deal with the shop.
4) Your insurance company will be requesting bids for the salvage. The more they can get, the less the final cost of your claim. There has been a lot of controversy about cars which have been declared a total loss finding their way back on to the road, or being purchased by the criminal fraternity to help them disguise a stolen vehicle. The ABI (Association of British Insurers) have come up with a code relating to the disposal of vehicle salvage. All insurance companies comply with this code. The result is that the majority of salvage is sold by the insurance companies to established salvage dealers. If the vehicle is damaged to an extent that meets listed criteria, it will be stamped with a code that requires the vehicle to be broken up or scrapped. Cars with lighter damage can still be repaired and put back on the road.
5) Once all of the above processes have taken place your insurance company will propose a settlement figure to you.
Their assessor will have referenced the trade publications to value the car, adjusting these figures for the age, condition and mileage of your car, and his knowledge of the local car market. The final figure he comes up with forms the starting point of the settlement value given to you. Any policy excess will have to be deducted along with any outstanding finance.
Your insurance company should make it very clear precisely how much you will get and detail any adjustments to you. If you pay your car insurance by Direct Debit, the it is likely that any remaining payments will also be deducted from the settlement cheque.
6) Once you have accepted the value (some companies might request your signature to a document called a 'form of discharge') you will receive a cheque.
7) Your insurance company now own the remains of your vehicle and, subject to legal limitations and the ABI codes, can do what they want with it. This will inevitably mean they will sell the salvage.
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 motor insurance companies. His website www.instant-online-insurance.co.uk offers Tesco car, home and travel insurance with online quotes and secure online payment.
This article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 Unported License, which means you may freely reprint it, in its entiretly, provided you include the author's resource box along with LIVE links (without "nofollow" tags).
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