Our client was stationary at a set of lights when they were hit from behind by another vehicle and pushed into the vehicle in front of them causing a domino effect of damages to several vehicles.
Significant rear damage was sustained to our client’s vehicle deeming it a total loss.
Our client’s vehicle was insured for market value only and on receipt of settlement it was found the Assessors calculated the current market value by obtained 3 comparison prices from:
The settlement offer was based on the average of these three prices, well below what the client believed the vehicles value was.
Of these 3 prices sourced 2 were not even close to the condition of the clients vehicle and none were in the state were the event occurred.
No replacement cost was sought from a reputable car dealer as the Insurer advised this was not their practice when assessing market value replacement costs.
Having market value cover caused a delay in settling of the claim due to rejection of the initial settlement offer therefore a negotiation process was entered into, which took several days to reach an agreeable outcome to all parties.
This lead to frustration by the client as they felt they were being unduly penalised as a result of a not at fault loss.
Pros of Market Value:
- Cheaper premium
- Great for cars no older than 3 years old
Cons of Market Value
- Client often worse off as generally settlement does not allow them to purchase similar vehicle
- Often not put back in the position they were at time of loss if car older than 3 years old
- Additional out of pocket costs to client to purchase a similar vehicle
- Settlement offers not reflective of the current market as often derived from online sites and not carsale yards
Pros of Agreed value policy
- Quicker settlement of claim
- Client put back into position they were at time of loss with no or minimal financial loss
- Less stress during claim process which makes a happy client
Cons of Agreed Value Policy
- Premium more expensive