does anyone know what happens if my car is written off and i am offered a settlement which is less than the finance left on my car? Can i claim the difference from the other driver who was completly to blame.

Thanks

Hi -- When the other drivers insurance offers a settlement figure which should be based on the current market value of your car, they are offering to indemnify the driver who was at fault in full and final settlement.

You could claim uninsured losses such as a hire car or personal injury through legal expenses insurance, not sure about the finance price difference (ring them for clarification) ?, but there will be no more money on the table for the written off car, once a final figure as valued above is agreed and accepted.

Sorry to sound stupid ........ but r you saying i would be liable to find the difference between the settlement and the finance outstanding. Could I claim it as uninsured loss as he was completly to blame?

happygirl --- Not 100% certain on whether you could claim that as uninsured loss, that's why it would be good for you to clarify with your legal expenses insurer. I take it you have legal expenses cover. ?

Thanks conmankiller.............. I do have legal expenses cover. I just hope car is repairable because otherwise i will be out of pocket and reading the agreement with the car finance people it seems i must pay the difference straight away.

Happygirl,

I deal with this kind of thing for a living.

The bad news is you will not be able to recover the difference between the value of your vehicle and the amount you owe on finance. Legally you are able to recover your losses arising out of the other drivers negligence and you are entitled to be put into the position that you were prior to the accident.

The problem here is that your vehicle has depreciated faster than the amount of money that you have paid off on your car loan. If your vehicle is deemed to be a total loss and you were to be put back into the position that you were in prior to the collision then you are entitled to recover a sum of money that will allow you to purchase a vehicle of the same make, model and age of the vehicle written-off in the accident. The problem that you face is that your car was worth less at the time of the collision than the amount of money that you still owed for it, i.e. you were in negative equity.

For example, you may have bought the vehicle say 3 years ago for £10k and on the open market it would now be worth £5k but you may still owe for example £7k. If you think about it this isn't a loss to you because your car was only worth £5k prior to the accident and with the £5k you reclaim from his insurers you can go out and buy a similiar vehicle but you will still owe the finance company £2k. To put it another way (I hope I'm not confusing you here) if you had not had the accident and you decided to sell your vehicle and got £5k for it you would still owe the finance company £7k.

I wouldn't put too much store by the fact that you have legal expense insurance as all this means is that your insurer will sell your claim (if you have been injured) to a Solicitor for about £700 and you will get passed on to some panel Solicitor who doesn't really give a fig because they are guaranteed an endless supply of claims from your insurance company.

I would approach a local Solicitor who deals in RTA claims - you are likely to get a much better service.

One final thing, you state that it is a head-on coliison, if the other driver disputes liability then it is your word versus his. Witnesses to the accident will make all of the difference so if you are aware of any make sure you get their names and addresses pronto as your Insurance Company or Solicitor will approach them to get statements from them. The quicker you get to them the more likely they are to help out.

Good luck!

Thanks for clarifying that Stevie, of course it makes perfect sense when explained that way and does give re-assurance when you deal with this sort of thing for a living.

It makes perfect sense really as some people on finance could actually come out of a crash in profit, if all their lost finance was reclaimable. Insurance is of course only supposed to place you in the same or similar financial position as before the accident by replacing the loss.

What does that GAP insurance do, does that give you the difference between the market value and the outstanding finance on a vehicle. ?

Thanks Stevie

Not really the answer i wanted as ive just heard the car will be written off. Contract with the Finance compay says if monies issued by insurance company doesnt cover outstanding balance I immediatley have to pay the outstanding amount...... what if i cant afford to do this?

Witnesse names and addresses were taken by the police, we were advised to stay in the car, I took no information the police have it all in their record and i assumed this was all ok.

He isnt likely to dispute liability he was travelling on my side of the road, I was travelling out of a blind bend and there he was.

My claim is already being dealt with ....... can i take it to another solicitor or is it too late.

Happygirl

as you have legal expences cover and other driver at fault then sue him for any loss. you pay extra for legal expences cover contact your insurer and tell them to sort it out... after all you take out insurance for piece of mind as they are always reminding us...

Thanks Ronbobby.

Thought all was lost now have some hope back.

Happygirl, sorry to hear that your vehicle has been written off.

In answer to your question about whether you have to repay the balance straight away to the loan company, this can only be answered by looking at the terms and conditions of the loan.

If there were any witnesses to the accident or if he admitted responsibility following the collision then hopefully this will be included within the police report which your Solicitors will apply for if liability is disputed.

It's never too late to transfer your claim although the earlier in the claim that you do it the better as most Solicitors would not take a claim on that was in it's final stages as there would be not much profit it in for them. You may find that your Insurers or Solicitors may try and fob you off if you try to transfer your claim by telling you that you will not have the benefit of the legal expense insurance policy if you transfer your claim to a firm of Solicitors not on their panel.

This is complete rubbish as you will only need your legal expense insurance if there is a dispute on either liability or quantum (the amount of damages that you are looking to recover) and in any event they have a duty to indemnify if you issue Court proceedings under the Insurance Companies (Legal Expenses Insurance) Regulations 1990.

The only problem that you might face in transferring your claim will be that the Solicitors may be reluctant to take on a claim where there is a possibility that liability may be disputed as they will act for you on a no-win/no-fee basis and therefore they will not get paid if you were unsuccesful with your claim. Speak to the Police Officer who attended the scene to find out if the other driver admitted liability to them or if they are prosecuting him and if so you will be home and dry.

Legal expenses insurance is a con to be honest although that's a story for another day!

Let me know how you get on as I will always be more than happy to help you where I can.

Finally (phew), in answer to your question conmankiller, I am no expert on GAP insurance but I think that you are right in that I think it is there to cover for situations such as happygirl finds herself in. I am pretty sure that it is now compulsory by law to provide GAP insurance when selling any new vehicles in this country to help avoid situations like this.

StevieT

Hi,

Generally if your car has been valued at a total loss... insurance companies make a valuation on your car. This is done by taking the amount the car was valued at prior to the incident, say £1500.. and they deduct from that amount the salvage value.. say £450, so they would offer you in total a sum of £1005.00 in final settlement of your claim. Whether your insurance is more than your car is worth is no fault of the Third Party Insurers, they make the valuation on the above. You can however choose to dispute the valuation of your vehicle, but you will require evidence to back it up.

If the Third party insurers however has accepted liability, i would suggest using a hire car to get around in, unless you do have access to an alternative vehicle, as mitigation has to be applied in this instance.

If i can be of any more help, please notify me.

Regards,

Marc

I also forgot to advise.. If your car has been written off, don't forget to check what category your vehicle is placed in. If it is a category C or D, you can keep the vehicle, have the repairs carried out, which you can pay for using the money provided by the insurance company, plus whatever you put towards the outstanding balance. However, you will need to notify your insurance company you intend to get your vehicle repaired, as there as certain proceedures they will need to carry out

Hi StevieT.

Sorry, this isn't actually a reply to your post. I noticed that you are very knowledgable when it comes to car insurance issues and was just wondering if you could give me some quick advice...

I had a crash on the motorway last week. There were no witnesses. Both myself and the man I crashed with have put in an insurance claim. We have completely different stories.

I was in the fast lane and he was in the middle lane. It started hailing and became very foggy, so I began to break, not suddenly, but quite rapidly. At the same time, he had gone to move into the fast lane, and clipped the bottom left of my car with the front right of his. I'm not sure whos fault this makes it? (Not sure if it would be my fault anyway due to 'wreckless driving' because I began to break..)

The man I had the accident with claims that I was in the slow lane, he was in the middle and I careered from the slow lane to the fast lane, clipping him on the way. This is just not true.

In this instance when the stories are completely different and there are no witnesses, can anyone actually win the dispute? And if not, do we each pay our own damages or do we split the overall damage 50:50? Also, having reached a 50:50 settlement, can I opt to pay myself (as my damage is £200 and my excess is £400), rather than through my insurance company as this would avoid higher premiums next year, or would it be too late?

Finally, the man involved works for a vehicle delivery company. I looked at his car after the crash and there did not appear to be much more damage than a bump. I am concerned that, because the insurance is on the behalf of his company, he is just putting in a claim as standard procedure, and may try and blame me for damage that was not actually part of the accident.

I'm so sorry to bombard you with questions but feel really lost as I don't understand the law around this area.

Thanks so much if you can help.

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Ribena666