Insurance - how to determine write off vs repair?

[T3rminator]

Say your car is insured for $10,000, and you have a prang and need to make a claim, how does the insurance company determine whether to repair or to write off?

Obviously if the repair bill is above the cost of the insured amount, they will write it off.

But what if the repair bill is close to the insured amount? For example, lets say the damage will cost $9,500 to repair. Will they go ahead with repair or will they likely write it off?

[hayseed]

If the cost of the Repair is More than the Insured(or market) value Minus the Salvage value, They'll write It Off..

In the case of your example. They would write It Off IMHO..

It's all about the Least cost Option to the Insurance Co.

[T3rminator]

Originally Posted by hayseed

If the cost of the Repair is More than the Insured(or market) value Minus the Salvage value, They'll write It Off..

In the case of your example. They would write It Off IMHO..

It's all about the Least cost Option to the Insurance Co.

Ahhh...so in my example, if they reckon they could get more than $500 for my banged up vehicle, then its a write off?

Just trying to do some calcs on whether its worth moving my policy to full comp.

[GasoLane]

Originally Posted by T3rminator

Ahhh...so in my example, if they reckon they could get more than $500 for my banged up vehicle, then its a write off?

Just trying to do some calcs on whether its worth moving my policy to full comp.

I wouldn't be without fully comp. I bumped into a Roo a few years ago, $10,500 damage.

If I never had full Comp that would've come out of my pocket, it's a no brainer really.

[T3rminator]

Originally Posted by GasoLane

I wouldn't be without fully comp. I bumped into a Roo a few years ago, $10,500 damage.

If I never had full Comp that would've come out of my pocket, it's a no brainer really.

Heres the thing. My car isn't worth much according to the insurers. They used to give me over the odds premium for low agreed value.

I have been on 3rd party for the last 8 years, and the premium I've saved is close to the agreed value now. A bit of a risk, but its paid itself.

But I just ran a quote on full comp and the premium has dropped heaps, an extra $20 a month will give me full comp, and the agreed value has actually gone up silghtly.

But I want some assurance that a little prang isn't going to get the car written off and me not being able to legally drive it. I love this car

Originally Posted by hayseed

So I assume you have Third Party Only at the Moment..!

Yes.

[GasoLane]

Originally Posted by T3rminator

Heres the thing. My car isn't worth much according to the insurers. They used to give me over the odds premium for low agreed value.

I have been on 3rd party for the last 8 years, and the premium I've saved is close to the agreed value now. A bit of a risk, but its paid itself.

But I just ran a quote on full comp and the premium has dropped heaps, an extra $20 a month will give me full comp, and the agreed value has actually gone up silghtly.

But I want some assurance that a little prang isn't going to get the car written off and me not being able to legally drive it. I love this car



Yes.

If you have a 'little' crash that's your fault there's no law that says the insurance company has to be involved.

If the same 'little' crash is someone else's fault you claim through their insurance company, if you don't like their answer (ie: write off) withdraw the claim and carry on.

[hayseed]

Originally Posted by T3rminator

But I want some assurance that a little prang isn't going to get the car written off

Once upon a Time If It was an "Economic Write Off" (Repairable But cheaper for the Insurance Co to write it Off) The Owner used to get first right of refusal on the wreck at Salvage value. But that was open to a fair bit of Collusion..!!

So Everything goes to Auction these days & if you want the Wreck? you have to go & Buy It back at auction yourself..!

[hayseed]

Originally Posted by T3rminator

Ahhh...so in my example, if they reckon they could get more than $500 for my banged up vehicle, then its a write off?

.

If they've paid for the Accident Cleanup & tilt tray to the Repairer/storage Yard, plus to have it assessed they will already be well & truly Underwater on the Deal..!!

[hayseed]

Originally Posted by T3rminator

Just trying to do some calcs on whether its worth moving my policy to full comp.

So I assume you have Third Party Only at the Moment..!

[matty88]

If that car was a financial write off, what are approximate buy back options and costs?

[T3rminator]

Originally Posted by matty88

If that car was a financial write off, what are approximate buy back options and costs?

What does a "financial" write off in car insurance speak mean?

The example is hypothetical. I'm just trying to determine if its worth moving my pov XT 5.4L 3v to full comp. Just ran a quote and the premium has dropped significantly, yet agreed value still seems reasonable.

[Franco Cozzo]

I'm third party property damage + fire and theft,

Just so if I stack one of my ****boxes into someones Lamborghini or put my car through Melbourne Museum and take out the dinosaur I'm not paying them off for $10/week for the rest of my life

If I owned something with some sort of value, I'd move to full comp insurance, but since I'm wheeling around in $5000 ****boxes then its not worth it for me.

[T3rminator]

Originally Posted by Franco Cozzo

I'm third party property damage + fire and theft,

Just so if I stack one of my ****boxes into someones Lamborghini or put my car through Melbourne Museum and take out the dinosaur I'm not paying them off for $10/week for the rest of my life

If I owned something with some sort of value, I'd move to full comp insurance, but since I'm wheeling around in $5000 ****boxes then its not worth it for me.

That's very much my scenario.

I just checked fire and theft (sif anyone is going to try steal a manual), and it's cheaper than my current rate. Going to ask for a please explain tomorrow!

[arm79]

I was always told by an old assessor friend it mostly depended on the financial position of the insurance company at the time.

He would normally write off a car if repairs were 80%+ of the insured value. But if they insurance company was neck deep in payouts at the time, think fire or flood for instance, he would be told to go all the way up yo 95%, sometimes more.

That $500 saved over a few thousand claims adds up to a significant amount of money.

I believe right now its parts availability that are the problem. FPV's were being written off for many years because new OEM bumpers weren't available, basic **** like that. Or they would release the car mostly repaired with a cash payout component for the owner to find their own bumpers, if they agreed to it.

Dad's car goes in tomorrow because of a minor bingle with a plastic pole. Needs a new bonnet because it was dented. But they can't find a new bonnet, OEM or aftermarket... So they are chasing a good quality used. It will get to a point basic repair parts aren't available so they can't put the cars back on the road.

The other thing to consider is insurance companies these days give lifetime guarantee's on repairs. If they don't think something can be repaired where it doesn't come back to bite them in the *** they will place the rather safe than be sorry card.

I'm surprised to see that the difference between fully comp and third party is about $20 a month. Usually a fair chunk more.

POS Ghia insured with Shannons for $9k agreed for $580 a year. Third party fire and theft quotes were in the $200 range, usually just sub $200.

Although being a V8 manual you'd be at a distinct risk disadvantage wherever you go.

[fordomatic]

Originally Posted by Franco Cozzo

I'm third party property damage + fire and theft,

Just so if I stack one of my ****boxes into someones Lamborghini or put my car through Melbourne Museum and take out the dinosaur I'm not paying them off for $10/week for the rest of my life

If I owned something with some sort of value, I'd move to full comp insurance, but since I'm wheeling around in $5000 ****boxes then its not worth it for me.

Same, $16 a month for third party fire and theft for my Sportsman. They wanted $90 a month for full comp, agreed value of $6000, it was a no brainer.

Insurance is all a gamble.

[prktkljokr]

Each insurer has their own % that they will write a car off at it can be 65-85%, salvage value makes a big impact on if a car is repaired or written off, BA poverty pack is only going to go for $500 at auction but a XR6 Turbo will fetch $5-6000and your V8 will fetch $3-4000...

So just as a example a poverty pack BA insured for $3000 with a salvage value of $500 will only need $2000-2500 damage to write it off.

BA XR6 Turbo insured for $13000 with a salvage value of $5000 will only need $7-9000 damage to write it off.

Your XT 3 valve V8 insured for $10000 with a salvage value of $3500-4000 will only need $5000-7000 to knock it on the head.

As for towing fees, storage etc, it is not counted into your sum insured, the insurer bears all these costs and they have no impact on your insured value.

Only the sum insured, repair value and salvage value determine what happens with your car, no other costs are added.

I did once tow a old ladies Holden Barina that was insured through RAC, it was hit in the front with the airbags deployed, even though it was a write off they decided to fix the car for her, only because at her age getting used to a new car would create more problems for RAC and her in the future, that and she had been a loyal RAC member for 60 years.

[Tonz]

many years ago in teen years it was suggested I go third party, but the $$ saved go into a 'replacement' back account. The $$ I saved from. comprehensive soon added up in that bank account.
I'd guess in today's society it would amount to even more for teenagers

[T3rminator]

Originally Posted by prktkljokr

Your XT 3 valve V8 insured for $10000 with a salvage value of $3500-4000 will only need $5000-7000 to knock it on the head.

I used the $10k as an example cos it was a nice round figure. Its worth half that on the insurer's system, so it would seem like it would only need a minor bingle for it to be written off. Previous owner also put an aftermarket kit on it, as ARM said parts availability will be an issue, and even if aftermarket replacements are used, its going to be $$$. They'll just write it off I reckon.

Originally Posted by Tonz

many years ago in teen years it was suggested I go third party, but the $$ saved go into a 'replacement' back account. The $$ I saved from. comprehensive soon added up in that bank account.
I'd guess in today's society it would amount to even more for teenagers

What I did for the last 8 years. I refused to go full comp cos the difference was huge. Its now pretty much self insured from the savings. But I was surprised at how narrow the gap between 3rd party and full comp now is, so its time to reassess.

[arm79]

Originally Posted by T3rminator

I used the $10k as an example cos it was a nice round figure. Its worth half that on the insurer's system, so it would seem like it would only need a minor bingle for it to be written off. Previous owner also put an aftermarket kit on it, as ARM said parts availability will be an issue, and even if aftermarket replacements are used, its going to be $$$. They'll just write it off I reckon.

If you go with a specialist like Shannon's you can ask for whatever value you want, provides you are willing to pay for it.

Most big companies wouldn't insure the Gha past $6k. I was with Allianz for a few years because they had this really good cheap comprehensive product if you placed a large number of restrictions on drivers and they offered bigger agreed values upto $8500 which was good. But they discontinued the product and dropped the max agreed amount and it got overly expensive.

Shannon's offered a higher value for about $50 more than all the new quotes with a $6k value.

[T3rminator]

When I was in the UK insuring the Z4, 3rd party was more expensive than comprehensive. Figure that out!

Apparently people who sought 3rd party were riskier drivers, so the system bumped up the premium to over full comp.

But it was a cycle. As "riskier" drivers moved to full comp, and started making claims, full comp then became riskier for the insurer, so premiums went up over 3rd party.... and it goes in a merry go round.

[whitelion65]

"I did once tow a old ladies Holden Barina that was insured through RAC, it was hit in the front with the airbags deployed, even though it was a write off they decided to fix the car for her, only because at her age getting used to a new car would create more problems for RAC and her in the future, that and she had been a loyal RAC member for 60 years."

I call bulldust on this! An insurance company acting with compassion?.....come on ! ;-)

[prktkljokr]

Originally Posted by whitelion65

"I did once tow a old ladies Holden Barina that was insured through RAC, it was hit in the front with the airbags deployed, even though it was a write off they decided to fix the car for her, only because at her age getting used to a new car would create more problems for RAC and her in the future, that and she had been a loyal RAC member for 60 years."

I call bulldust on this! An insurance company acting with compassion?.....come on ! ;-)

Yeah I couldn't believe it either, but its true, Insurance companies have surprised me a few times over the years with what they cover, and then what they don't.

[DougalXR6]

NRMA Insurance wanted to write off my wife's 1999 Lancer in 2012 after it was hit in the rear, while she was stopped at an intersection.
After explaining to them how much the car meant to her they decided to repair it.
They also covered the cost of respraying the rear spoiler which had badly faded paint and had not been damaged in the accident.
Miracles do happen.
The car was bought back from us by Mitsubishi in 2020 due to the air bag recall.

[T3rminator]

Originally Posted by DougalXR6

NRMA Insurance wanted to write off my wife's 1999 Lancer in 2012 after it was hit in the rear, while she was stopped at an intersection.
After explaining to them how much the car meant to her they decided to repair it.
They also covered the cost of respraying the rear spoiler which had badly faded paint and had not been damaged in the accident.
Miracles do happen.
The car was bought back from us by Mitsubishi in 2020 due to the air bag recall.

Was the repair over the value of the car? And if so, did you have to pay the difference?

[DougalXR6]

Originally Posted by T3rminator

Was the repair over the value of the car? And if so, did you have to pay the difference?

I can't remember any values being given at the time.
The policy was for an agreed value which would have been for the maximum they allowed for the car.
We didn't have to pay anything for the repair and I don't recall the policy increasing the following year as we have a lifetime maximum no claim bonus.

[prktkljokr]

My son had a V8 Toyota Soarer, it was given to him, it didn't really have much value at the time so he insured it for 3rd party fire and theft for market value with SGIO, he used to just use it as a daily driver to get around and it wasn't pretty, anyway one day the engine caught fire, it spat a injector o ring at the rail, he pulled over and a passing motorist pulled over and put it out limiting the damage to just the top of the motor, so he made a claim under the fire part of the policy, they promptly wrote it off and offered him $3000, for some unknown reason only known to him he asked if he could buy the wreck back, they said no problem $2500 is the wreck value, so he would have got the car back and had to pay the $500 excess.

Now this is where I got involved in it, I started looking around to see what a replacement Soarer would cost, thinking I could get one for $1500, I could not find 1 under $7000. so we then turned the tables on SGIO and said the $3000 was not a current market value as we could not replace it for that and sent them half a dozen links, they finally came back with another offer of $6000 which I told my son to take and let them have the wreck, after excess he received just under $5500.

I then purchased a 2010 BMW 323i with minor rear damage and repaired it for him for under $4000

So you may be better off with your 3rd party

If someone crashes into you their insurance will pay you for your car and you keep the wreck, If its stolen you will be paid out market value, if it catches fire you will be paid out market value, if you crash it and its your fault you have a wreck but you dont have to pay for the other parties car.

I think sticking with 3rd party is a win win for older cars.

[T3rminator]

Originally Posted by prktkljokr

So you may be better off with your 3rd party

Came to the same conclusion. There would only be a very limited number of scenarios where I would realistically make a full comp claim. Changed from 3rd party only to 3rd party with fire and theft, and saved myself $3 a month


Reading some of the accounts here, makes insurance companies sound like good guys!

[roKWiz]

Originally Posted by T3rminator

Came to the same conclusion. There would only be a very limited number of scenarios where I would realistically make a full comp claim. Changed from 3rd party only to 3rd party with fire and theft, and saved myself $3 a month


Reading some of the accounts here, makes insurance companies sound like good guys!

Yeah good guys. Its not to dissimilar to boat insurance in that having 3rd party protects you enough to cover damage to other boats in a marina. (now under threat)
Problem with full insurance is they won't allow you to use the boat as you see fit, there are always conditions on time of year to sail, where and under what conditions.
In the end its works out better to put that saved money aside to cover a total loss at sea under your own terms. (assuming you survive a sinking)

Insurance companies and marina's are now getting together (conspiring I call it) to ban non full comp insured boats from marina's and anything that doesn't pass marine survey. Possibly one step towards the same happening in apartment building carparks or caravan park sites.
In the US there are RV parks that will not allow a motorhome non fully insured or older than 10 years to stay. Is this the way we could be headed.

[Citroënbender]

Originally Posted by roKWiz

Insurance companies and marina's are now getting together (conspiring I call it) to ban non full comp insured boats from marina's and anything that doesn't pass marine survey. Possibly one step towards the same happening in apartment building carparks or caravan park sites.
In the US there are RV parks that will not allow a motorhome non fully insured or older than 10 years to stay. Is this the way we could be headed.

I think it quite possibly is. Achieves nothing in terms of net happiness.

[roKWiz]

Originally Posted by Citroënbender

I think it quite possibly is. Achieves nothing in terms of net happiness.

Hence all the cheap amateur built steel and ferro cement boat for sale on mooring minders.

If you can not prove the professional build quality of a hull for full survey, you can not qualify for full comp insurance and therefore a marina berth.
Bit of a merry-go-round these days.