Insurance Payout - Cash in lieu?

[Ash6R]

I just finished talking to my insurance company and im kinda confused and frustrated. This is my first car accident so bare with me...

I got reversed in to the other day and have sent details on where they can get CCTV footage proving it wasn't my fault. Both me and the other driver are with the same insurer and im currently trying to sort the repairs to my car.

My car was picked up yesterday to get fixed and they dropped of a courtesy car in the mean time. However, this afternoon i got a call from the garage working on my car saying that they wont do repairs on the car and the insurance company will give a cash in lieu? They also said they wanted to the courtesy car back ASAP or they will cancel the insurance (can they do that?). I called my insurance company and they said that apparently there was previous work done to the car which i have no idea of since i bought it used of cargiant. The insurance company said they will get a senior engineer to inspect the car again and tell me by the end of the week what will happen to the car. As of right now they said the estimated cost of repairs is around £2500. Not sure whats going to happen to my car and the courtesy car since i need a car to go to work etc.

Has anyone been in the same position before since i have no idea whats going to happen?

[skymera]

Speak to your insurer. As far as I'm aware all you need to do is pay your excess to the garage when they're done. All other funds are paid directly from your insurer to the repairer.

I wouldn't pay the repairer a single penny until the job is done and done well.

[Ash6R]

Yeah thats what i thought, but they said that apparently my car has been repaired before(which i didn't know) so they wont repair my car right now. They said they will pay for the repairs at a different garage. Right now its at one of there approved garages. Another senior engineer will check the car before anything happens and will call me of the outcome.

[SRGTD]

I'd suggest you check you insurance policy; does it say that the insurer has the option of repairing or paying cash in lieu of repairs not being carried out? I can understand that sometimes if it's cheaper for the insurer to make a cash settlement rather than repair they might want to do this but if their documentation doesn't state they can, then they aren't complying with the terms of their policy.

I'm struggling to understand why the repairer and your insurer won't repair your car if the reason being given is that it's been repaired before. There will be thousands of cars that have been involved in more than one accident and repaired more than once; a previous accident repair to a car shouldn't preclude it being repaired a second time. I'd be asking the repairer and your insurer to explain exactly why they won't repair your car - just to say they won't do it isn't good enough.

The only reason I can think of as to why they won't repair you car is;

• the previous repair wasn't carried out to an acceptable standard, so there are additional costs to be incurred rectifying the previous repair.

• your car might have been involved in a serious accident and written off (category A or B) before you bought it and you weren't told of this - hopefully not! Edit; I've just looked at the Car Giant website and under the FAQ section, they state that all cars are HPI checked to ensure there isn't any o/s finance, haven't been stolen or written off, so thankfully you can disregard the write off possibility.

[Ash6R]

I'd suggest you check you insurance policy; does it say that the insurer has the option of repairing or paying cash in lieu of repairs not being carried out? I can understand that sometimes if it's cheaper for the insurer to make a cash settlement rather than repair they might want to do this but if their documentation doesn't state they can, then they aren't complying with the terms of their policy.

I'm struggling to understand why the repairer and your insurer won't repair your car if the reason being given is that it's been repaired before. There will be thousands of cars that have been involved in more than one accident and repaired more than once; a previous accident repair to a car shouldn't preclude it being repaired a second time. I'd be asking the repairer and your insurer to explain exactly why they won't repair your car - just to say they won't do it isn't good enough.

The only reason I can think of as to why they won't repair you car is;

• the previous repair wasn't carried out to an acceptable standard, so there are additional costs to be incurred rectifying the previous repair.

• your car might have been involved in a serious accident and written off (category A or B) before you bought it and you weren't told of this - hopefully not! Edit; I've just looked at the Car Giant website and under the FAQ section, they state that all cars are HPI checked to ensure there isn't any o/s finance, haven't been stolen or written off, so thankfully you can disregard the write off possibility.

I'm gonna call them back tomorrow morning and try to resolve this. Is it possible for me to demand them to fix the car at there approved garage instead of repairing it at a different garage? And i checked through there documents and this is what it said:

2. What we will pay
We will decide how to settle your claim and will either:
● pay to repair your car, or
● pay a cash sum to replace the damaged car or item. We may reduce the settlement, or
ask you to contribute towards the repair costs, if the parts replaced were already worn or
damaged or for audio/visual equipment that has been removed from your car

A decision will be made based on the garage/engineers recommendation.

[SRGTD]

So it looks as if your insurer's basis of settling claims is;

• in the case of repairable damage; they pay to have a policyholder's car repaired

• in the cases of a total loss; they pay cash to a policyholder to replace the car (or an item).

The second item (paying cash) would come into play where a car is damaged beyond economic repair and is written off, or stolen and not recovered, so the insurer makes a full cash settlement for the car, based on the market value of that car just before it was written off / stolen. Paying cash to replace an item; I'd interpret as paying for things such as a car stereo that has been stolen from a car. The term 'an item' is quite vague though, but IMO doesn't apply to your circumstances; your car has sustained damage as a result of an accident and needs repairing to return it to it's pre-accident state. Their policy states that they will pay to have your car repaired, not pay you cash for you to arrange for repairs independently.

The reference to policyholders making a contribution to repair costs on wear and tear items where there is evidence of wear isn't unusual. Insurers may ask for a contribution to repair costs if a repair results in 'betterment' (e.g. a rusty wing full of holes being replaced with a brand new one).

It's interesting that your insurer has said they will pay to have your car repaired at a different repairer; one that isn't part of their approved repairer network. Will this be a specific repairer that they decide upon or can it be a repairer of your choice? (I assume they would choose the repairer). That's really strange, as they will have agreed specific discounted rates on parts costs, paint cost and labour rates with their approved repairers. They'll almost certainly not have an agreement on reduced / discounted repair rates with a repairer outside their approved repairer network, so this suggests repairing your car outside their network could cost them more than if it was repaired by one of their approved repairers, unless they intend using a repairer who would carry out repairs with used/salvaged parts. I'd be looking for a pretty good explanation from their engineer on why they'll pay for repairs by a repairer outside their approved repairer network but not within their network.

I hope this all works out OK for you. Situations like this can be quite stressful. Good luck and please keep us updated!

[Ash6R]

A bit stressed is an understatement I'm meant to be enjoying the holidays after exams!

[RUM4MO]

As an Admiral policy holder, and so is my wife, but not multi-car(!) this concerns me greatly!
I wonder if any of this has anything to do with both parties being Admiral customers?
In the event of the assessor/engineer discovering that your car has presumably been previously repaired in that area but not to the correct standard of repair, I would have hoped that common sense would have prevailed and the garage through your insurer would have worked out exactly what portion of this repair cost needs to be borne by you, requested prompt agreement from you, and started the repair.
Your personal situation with respect of needing a car for work, is not your insurers problem now that this repair needs to go beyond the scope of what it should have been from that collision.
Good luck!

[Ash6R]

I just talked to them and they have said the reason they want to do a cash settlement is because there has previous repairs done to the front end of the car where its been damaged right now. They have said i can choose any other garage and they will take the car over there and pay the cost of the repairs minus the excess. They also said i can claim VAT? Not sure if i can since im a student. They have also said i have to bring the courtesy car back. Im just wondering what will happen if the other garage said it will cost more to fix than what the insurer has said. Will i have to pay out of my own pocket? or will insurance cover it.

[RUM4MO]

Claiming VAT back, hum, I think that you are right about that, you'd need to be VAT reg'd to play that game!

Hopefully, now that all car body shops use a standard tool for pricing insurance work, you should not pick up any unjustified extra costs, it could/should be that as they "are working in that area anyway" Admiral should be picking up "their" share of the costs in a fair way - but unfortunately I'd doubt if you would ever be able to prove/disprove that.

It does seem strange/inconvenient that the Admiral approved repairer could not take on this repair task and split the costs? Why would they throw away work?

[SRGTD]

Ash6R, if you are a VAT registered business, I believe you can claim back VAT on goods and services purchased for use in your business, so the suggestion by your insurer that you, as a private individual who (presumably) aren't in business and not registered for VAT can claim back the VAT on the cost of repairs to your car is factually incorrect; it's worrying that they are giving out incorrect information like this.

IMO the reason given for the cash settlement does seem a little unusual, it suggests that the insurer's approved repairer isn't competent at repairing an area of a car that has been previously repaired. As to whether or not you will be required to contribute to the cost of repairs if they are higher than expected; based on what your insurer has said - they will pay for the cost of repairs, minus the excess - this suggests you will only have to pay your excess. However, if it was me, and the fact you seem that have been given incorrect information regarding the VAT position, I would ask your insurer to put in writing that the only cost you will have to pay in relation to your car's repairs in the excess amount.

If the use of a courtesy car isn't part of the standard cover under you insurance and was an optional add-on that you paid extra for, if I was you, I'd ask your insurer for a refund of the amount you paid for this as they're not supplying you with a courtesy car for the duration of the repairs.

Hopefully, everything will be sorted to your satisfaction very soon.

Edit; My insurer provides a guarantee on repairs that are carried out by one of their approved repairers. I don't know if your insurer provides a similar guarantee - if they do, it might be worth checking the repair guarantee position as your car will be repaired outside their repair network. As it's your insurer's decision and not yours to get your car repaired by a non-approved repairer, you shouldn't be disadvantaged as far as any repair guarantee is concerned.

[Ash6R]

Just got an email from them regarding the VAT, its says:

You can claim back up to £xxx.xx of the VAT element once supplied us with a repair invoice receipt.

My parents own a store so maybe i could use that to claim VAT? Im guessing once they find out who is liable they will refund the excess back as well. Also the courtesy car was included with the standard cover i got so im guessing if i go to the new garage i wont be able to get a courtesy car which kinda sucks.

I guess when it comes to renewal time i'll be looking for insurance elsewhere...

[SRGTD]

Just got an email from them regarding the VAT, its says:

You can claim back up to £xxx.xx of the VAT element once supplied us with a repair invoice receipt.

My parents own a store so maybe i could use that to claim VAT? Im guessing once they find out who is liable they will refund the excess back as well. Also the courtesy car was included with the standard cover i got so im guessing if i go to the new garage i wont be able to get a courtesy car which kinda sucks.

I guess when it comes to renewal time i'll be looking for insurance elsewhere...

I'm not familiar with HMRC rules in relation to VAT, but I would have thought that unless your parents are the legal owners of your car and it's used by them as a business vehicle, then it wouldn't be possible to claim back VAT on the repairs. Probably worth getting this checked out though, especially if your insurer has put in writing that you can claim back some of the VAT.

You should be able to get your excess back if the other party has admitted liability for causing the accident or there's video evidence you can provide to your insurer that shows you're not responsible.

It's always worth shopping around at renewal for alternative quotes; some insurers run campaigns with tempting premium offers to attract new customers and these customers can then see quite large premium increases come renewal time even if they've not had a claim.

[Ash6R]

Yeah im the legal owner of the car so i guess i wont be able to claim the VAT, ill check with them after. The car has been arranged to be dropped of at another garage that i chose tomorrow and they agreed to do it with in the amount of the cash in lieu minus the excess. Still need to sort the courtesy car issue though.

[Ash6R]

EDIT: I'm not sure if my insurance company is a joke or the approved repairer is a joke. Today they came to pick up the courtesy car by calling me when they were in front of my house! If they called a few hours ahead it would be fine but they came to my house and then called me saying they're here to pick the car up. This meant i had to drive back home to give my car. When i got home guess what i saw? MY POLO was back at my house when the insurance company requested them to deliver my car to the other garage. This is all in writing as well in an email that was sent to me. I stood outside arguing with driver why my car is not at the garage, he said hes just a driver and i have to call my insurance company to work it out. I'm not even sure if its worth arguing with my insurance company to take the car to the other garage when i can drive it there since its less than three miles away. Overall this entire experience has been truly awful and they have certainly lost my business, i payed over £2700 to insure my car last year and this is how they treat their customers!