We've written about how cars are written off before but there are circumstances where writing a vehicle off is not the appropriate way to settle a claim.
This generally relates to older vehicles where the cost to repair damage, even if substantial, is significantly less than the car's value. Newer sports, super and hyper cars feature more exotic materials in their construction, which usually means that repairs are both more complex and expensive.
For older cars, particularly those that are more valuable, their construction is relatively simple and they are usually made from steel and aluminium – metals which can be repaired or replaced.
The cost to repair many cars has little relevance to their value. While a car might be rare, have historic significance or is simply one that has historically attracted strong value, the cost to restore or repair is usually a relatively low percentage of the car's value.
These costs have also remained relatively static when compared to the way cars have appreciated in value in recent years. They are being driven by labour rates and cost of parts and raw materials.
To explain how the process works, let's begin by highlighting that, as a Lockton Performance policyholder, you can have your vehicle repaired by the firm of your choice – this means that the work will be carried out by experts who understand how to repair and restore classic cars. You will not be directed to use an approved repairer.
We treat a major crash repair in the same way as a restoration. This means that the damaged car will be stripped down to assess the extent of repairs needed to bring it back to its pre-accident condition and as this forms part of the repair, it will be covered as part of the claim.
Once the cost of repairs is established, the policy will cover this, without argument or long-winded attempts to reduce the amount by the insurer.
Even if the damage is major, we will work on the basis of trying to repair the car first rather than simply deeming the work too extensive or expensive.
It's also worth highlighting that many classic car restorers can give examples of cars which have been restored from little more than a pile of parts and a dismantled body and chassis – cars which the wider public might regard as being fit for the scrapyard.
In summary then, if the car can physically repaired, then the policy will pay.
But what happens if the cost of repairs does get close to, or even above, the car's value?
Under our Agreed Value cover, the insurer doesn't regard that the value as the maximum payable, as the policy will pay up to 125% of the agreed value, or £250,000, whichever is less, to repair the vehicle to its pre-accident condition.
This means that cars which aren't worth five and six-figure sums could also be repaired where it's safe to do so.
These solutions offer an answer to repairing damaged cars which avoids the car being simply written off and the damaged car being returned to you. This leaves you with the task of managing your own repair and you may also then face the car being devalued as a result of the repairs – in some cases, by as much as 25%.
Most motor insurers will not cover any diminution of value following a repair. For vehicles over fifteen years old, our policy will pay the difference between the pre and post loss agreed value at either up to 100% of the repair cost or 25% of the sum insured, whichever is the less, up to a maximum of £500,000.
Click here to read the original article and, if you need any further guidance, please talk to us today.