Retention of salvage UK classic car insurance

[Spyder fan]

Sorry to start yet another insurance topic, but it appears that not all specialist classic car insurance schemes offer retention of salvage clauses.

What this clause means is that if the cost of repairs to your car exceeds the agreed insurance value you will get the agreed insurance value of your car and the wreck of the car itself. Without the clause you will have to arrange to buy the car back from the insurance company and this will of course come out of your payout! If your car has an agreed value of less than ?20,000 which is often the case with ?lan +2's you could find yourself in the unhappy situation that RichC is now in having sustained some heavy accident damage caused by an idiot who drove into the car whilst it was parked. He is possibly looking at getting a payout of ?7000 approximately after buying back the car with a repair bill of ?12500 to look forward to. The car was agreed insured for ?9500 which I would put as low given the current upsurge in prices and the cost of professional specialist repairs.

With retention of salvage Using the example above the payout would be ?9500 plus the car which would have a value around ?3000 - ?4000, hence total would be around ?13,000.
Without retention of salvage the total payout equals ?6000 - ?7000 in real terms whether you buy the car back or not.........OUCH!

With the value of all classics rising beyond expectations recently it's most likely that your car is underinsured, look at the policy details carefully before you renew your insurance and do please make sure you contact Club Lotus for a proper valuation for insurance, Alan Morgan and the team at Club Lotus are very helpful to members and non members alike ( for a small fee non members).

I use RH Specialist Cars for my Elans, they are competitive in price against all other policies offered by Peter James and others that do not offer the clause.

https://www.rhspecialistinsurance.co.uk ... -insurance

[MickG]

As I am just about to insure my Sprint after some major works, I looked at my old policy docs regarding the write-off agreed value. Exactly as Alan described when you take the buy back figure and the agreed value figure you can be and probably would be at a loss.
Following Alan's link I first looked at the web site and you get to keep the damaged vehicle and get the agreed value pay out. Not only that the insurance was cheeper and included Breakdown cover as well.
Good result, unfortunately at someone else's expense but like most insurance you never know how good it is until you need it, and hopefully you never do.
Thanks for the heads up Alan, saved me a few bob and got a better insurance into the bargain
Regards Mick G

[RichC]

Sorry to say my experience with KGM has not been good so far . It's over 1 month since accident and i have spent ages ringing them to be told different stories / different numbers to ring . Latest and different excuse was that my claims handler had gone on hols for 3 weeks to get married which is why i hadn't heard anything ...
ALSO , they had my accident down on system recorded as me driving into a stationary vehicle , rather than my vehicle being the stationary vehicle which was rearended.
However , i rang last thing friday afternoon and a lovely lady called Louisa told me they have ?10250 down as agreed value and that they'd give me back ?10250 less 28% payment for the car as it is, i.e ?2870. so that's ?7230 towards fixing it.. (nowhere near the ?13k bill)
I've politely asked her to consider talking to assessors & Peter James as the garage felt the vehicle agreed value was too low...
let's see what happens next

[billwill]

Don't wanna be a killjoy, but:
Surely if yours was an agreed value insurance policy and that value was written in as ?10250 then your premium was based on that figure and that was what you were paying for; if there was no "Market Value" clause there is no point in getting the value reassessed now.

[Chancer]

Spot on.

Some people will pay extra for an agreed value in excess of what a vehicle is deemed to be Worth on the market, you can only expect an insurer to pay out what the agreed value is, no more.

I guess if values are rising that much then one should look carefully at the figure at renewal time and maybe even increase it to take into account future rises in value.

The salvage at 28% is what I expected, remember you have a choice, you can take the ?10250 and look for another Elan, the insurers are keeping exactly to their side of the bargain, I once challenged a buy back figure but I had no bullets for my gun as the salvage guys are tied into contracts with them where they take the salvage at an agreed percentage according to the category of the write off, there is a discrepancy of 3% (I expected 25%)on your figure, maybe some admin/handling charge and you might be able to reduce it to 25%, Worth a try but you have nothing more to gain, its take it or leave it and if the cost of the repairs are going to be as high as you say and you dont want to do the work yourself (which could make you a very good profit) then just accept the ?10250, I have always chosen to buy back and repair myself.

The cost of repairs is a bit of a red Herring, the agreed value is ?10250 which should have been enough to buy you a replacement vehicle at the time of insuring, if it wasnt enough then you were underinsured, lets suppose that ?10250 is/was the correct figure and that your vehicle was even more seriously damaged, run over by a steam roller for example well the repair costs would be ?20 or ?30K but what has that got to do with the price of fish?

[Spyder fan]

The title of the topic is Retention of salvage and is a cautionary tale. I have found that RH Classic insurance that includes retention of salvage as well as agreed value costs no more than Peter James and others that don't offer retention of salvage.

Agreed value with Rh of ?10500 equals a payout of ?10500 as well as the car back.... Peter James and others equals 25% less than agreed value if you want the car back.

Rich has found this out to his considerable cost, but I always advise not accepting an insurance company's first offer and they will not offer less if you question and reason against the offer, it's worth arguing for a bigger payout based on current values especially if the car has an agreed value below ?15000 which coincidentally is normally the cut off point that most companies require a club valuation rather than go by a customers description / declaration of value.

Pointing out the obvious after the event is not helpful.

[Chancer]

Ok, yes I agree, its not helpfull

I have learned from it though, I never imagined that one could get paid out the full agreed value and still get to keep the salvage without paying anything, that really is a good deal and for many of us were we with that insurre we would be hoping that the vehicle be declared an uneconomic repair so we could turn a bad situation to our advantage rather than see the car be repaired probably by an inexperienced and uncaring garage for the lowest cost.

Good point re the ?15K ceiling on agreed value, I bet the premium costs no more for ?10 or ?15K.

Many years ago I was paid out ?14K(less my ?500 excess) on an agreed value Policy, I had submitted photographs but there was no club valuation.

[Chancer]

Just to labour the point Alan, are you absolutely sure that the retention of salvage gets you the vehicle back at no cost or just means you have the option to retain the vehicle at whatever percentage?

Its not that I doubt you as your postings are always sensible, correct and pragmatic its just that it sounds slightly to good to be true, something I am always a little cautious of!

[Spyder fan]

Sorry Chancer, and thanks for your reply.

I have my grumpy hat on this afternoon

RH insurance pretty much invented specific classic car insurance and it's based on a number of observations regarding the use of such a vehicle and the type of person that owns such a vehicle.
1) we don't use them as everyday cars and have at least one other modern vehicle for everyday use.
2) we tend to drive them carefully
3) we tend to make sure they are well maintained
4) claims generally tend to be no fault of the insured ( RichC is a good example)
5) mileage is mostly well below 1000 miles a year certainly 95% are below 2500
6) most of us are over 35 years of age making us statistically less likely to cause or be involved in an accident.

These and many more reasons make insuring classic cars a profitable low risk business for specialist underwriters, unfortunately as with everything there are companies who don't offer a full transparent service and hide behind small print citing industry standards as an excuse.

[Spyder fan]

Just to labour the point Alan, are you absolutely sure that the retention of salvage gets you the vehicle back at no cost or just means you have the option to retain the vehicle at whatever percentage?

Its not that I doubt you as your postings are always sensible, correct and pragmatic its just that it sounds slightly to good to be true, something I am always a little cautious of!

Yes definitely with RH.... Just read their homepage ( see link first post) I think theres no doubt that their statement would be legally binding just from that.

[MickG]

Just Insured my Sprint with RH and the policy docs clearly state " you may keep the salvage if you vehicle is over 20 years old" I think that covers all of us regarding our Lotus.
The Statement of Price-Motor Insurance doc also states:- In the event that your vehicle is damaged beyond repair, you may retain the salvage free of charge.
Now all I need is get get a valuation from Club Lotus as I've been advised that my ?32K is probably an under value.
Hope that helps
Regards Mick G

[RichC]

thank you guys!. i'm gonna press on and see how much I can reduce my losses. That threshold figure of ?15k is very useful information

[AHM]

Rich,

Your car belongs to you - Not the insurance company.

Your claim in law is against the person who damaged it for the cost of its repair. This would be worked out by a court with reference to its market value.

So take it to be repaired, and send the bill to the bloke that hit it.

If you like the idea of your insurance company handling it for themselves:
Your agreed value is with your insurance company, not the third party - So tell them to pursue the third party for the market value.

The online copy of Peter James Policy Document says "The contract does not give, or intend to give, rights to anyone else. No-one else has the right to enforce any part of this contract."

Phone up your motor legal policy and see how good that is when you need it.

And while you are at it tell Peter James to pull their finger out of .....

Don't forget that if Peter James wish to cancel your policy you want them to claim the cost for that as well.

Despite what your insurance company may say or write they cannot make you do what they say, or prevent you from perusing your claim personally, even if you have asked them to act on your behalf.

Remember the insurance policy says "how much we pay you" not how much" the third party pays us". They are in it for the profit!

[AHM]

Don't wanna be a killjoy, but:
Surely if yours was an agreed value insurance policy and that value was written in as ?10250 then your premium was based on that figure and that was what you were paying for; if there was no "Market Value" clause there is no point in getting the value reassessed now.

Bill,
If the accident is your fault, then your insurance company are going to pay you the agreed amount. If the accident is someone else's fault then they are personally responsible up to the market value. If the market value is less, than the agreed value then your insurance company make up the difference. That is why you pay the extra.

There is no requirement to involve the insurance companies, the claim is between the individuals. Rich's claim is not against his insurance company if the market value exceeds the agreed value, so they should be pursuing the third party for the market value + any costs. As he would have to, had he not paid them to act in his interest!

[Chancer]

A comment regarding protecting your rights and how the insurance companies try and intimidate and browbeat you into accepting what they want to do with your property especially when has been pointed out its a third party who is liable.

If possible never, ever allow them to remove your vehicle to their repairer, most of the time it goes straight to a salvage yard and whilst it is still your property they wouldnt believe it in the way that they will act with you, even if your car does get repaired you are likely to lose most of your personal effects and the vehicle documents especially the service book will have gone within 5 minutes of it being hooked up, OK thats more relevant to modern "ringable" vehicles.

The thing is once the vehicle is out of your hands then they pretty much have you by the short and curlies and force you to accept their offer even though they may well reclaim full market value from the 3rd party insurers.

I have always returned my wrecks to my own property even once refusing to allow the breakdown truck called by the police to hook it up as they would not return my vehicle to my home even though it was much closer than their yard, I dug my heels in and paid myself for another breakdown truck and boy did it give me pleasure at the end of the protracted negotiations to make my insurance company pay me back

Even if your vehicle can be riven home you will be besieged with calls claiming to be your insurers (acting on behalf of) saying that the breakdown truck is on its way to you to remove your vehicle and to remove your personal effects, I have even had the tow truck arrive with thuggish drivers who probably also work as debt collectors telling me that I must release my vehicle to them.

All in all its very hard to resist their pressure but if your vehicle remains with you then you are in a much stronger position for the negotiations, the assessor will be playing away on your home ground.

Here in France its even worse, they always offer derisory amounts and after getting nowhere with negotiationg and ask for the return of your vehicle so you can pursue the 3rd party yourself or even just fix the car and get on with your life then you are told that the vehicle has "accidentally been crushed"