Insurance amount is less than settlement amount

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Katjies27

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Urgently need some advise please.

This is the very first time I have been involved in an accident so I just want to make sure I get the most from my insurance and the third party.

I was standing still in traffic at the bottom of a bridge on the highway when two card came flying over the bridge and smack bam into the back of my car. Insurance confirmed my car is going to be written off and I proceeded to contact the bank for a settlement offer (sad part is my car is 8 months old :( ). The person responsible for the accident and I are both at the same insurance company but if I claim from my policy I get a bigger sum of money yet the settlement amount is still higher and I will have to settle the difference.

I feel very cheated seeing that I did not cause an accident and I lose a whack load of money (premiums paid and I need to settle the difference) plus I don't have a car.

Can I not somehow claim the difference I need to pay from the persons insurance that caused this accident? This individual accepted responsibility on the scene and at the police.

Please somebody give me good news?
 
Wow, that's just messy. I am sure somebody here can advise. I don't understand why they have to make it so damn difficult. Milking their clients (how it seems on the surface of things at least). Good luck.
 
You can go after the guy who caused it for the money for the difference.. but it won't be easy or cheap.
 
Oh hell!

That is precisely why I insist that my customers take out Top Up insurance which will bridge the gap between settlement and what the insurance company pays out. Whoever did the finance with you needs a fat crack if they didn't offer it to you.

I doubt if his insurance will come to the party, so it looks as if you are up a creek without a paddle, I'm afraid. :(
 
Too late now but that's why you're encouraged to take that top up cover thing for at least the first year of a new buy (unless the car is brand new in which case most insurances replace the vehicle). I suppose your only option is indeed a civil claim from the person who caused the accident. Won't be cheap and you could still lose it leaving you with an even bigger hole. Lawyer up and asses your chances.
 
Normally if a car is written off in the first year it's covered in full, so check up on that.

Secondly you don't necessarily have to accept that the car is a write off and can fight against it to have it repaired instead. This all depends on exactly what the damage is of course.
 
My insurance will pay out the retail value and the third party insurance will only pay market value, so I get more if I claim on my insurance.

Really super disappointed that I don't have top-up cover. I will most definitely inquire about that when insuring a new car.

I have a 2008 Opel Corsa, I bought my car in October 2013 so in my eyes it is brand spanking new!

Thanks for the responses guys :) have to face the music I guess.
 
Fazda said:
Oh hell!

That is precisely why I insist that my customers take out Top Up insurance which will bridge the gap between settlement and what the insurance company pays out. Whoever did the finance with you needs a fat crack if they didn't offer it to you.

I doubt if his insurance will come to the party, so it looks as if you are up a creek without a paddle, I'm afraid. :(
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^^^^ This - is essential
 
Top Up should have been offered by the Finance House - it is separate from your HP agreement, as well as your individual insurance.

You are, in fact, instructed to sign that it was offered to you, and that it was not needed, when you do take out Finance.
 
Fazda said:
Oh hell!

That is precisely why I insist that my customers take out Top Up insurance which will bridge the gap between settlement and what the insurance company pays out. Whoever did the finance with you needs a fat crack if they didn't offer it to you.

I doubt if his insurance will come to the party, so it looks as if you are up a creek without a paddle, I'm afraid. :(
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i have alway taken the top up for just this, its worth the R30 odd a month
 
ijacobs3 said:
i have alway taken the top up for just this, its worth the R30 odd a month
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After giving this much thought (I was always against these types of "top up" insurances), I agree with you, at least for the first year or so when the insured value will be significantly less than the settlement amount.
 
R13... said:
Too late now but that's why you're encouraged to take that top up cover thing for at least the first year of a new buy (unless the car is brand new in which case most insurances replace the vehicle). I suppose your only option is indeed a civil claim from the person who caused the accident. Won't be cheap and you could still lose it leaving you with an even bigger hole. Lawyer up and assess your chances.
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ftfy
 
Katjies27 said:
I have a 2008 Opel Corsa, I bought my car in October 2013 so in my eyes it is brand spanking new!
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There is the problem - you bought the car and financed it but it was more than likely sold to you at full RETAIL value. Insurance values the car midway between trade and retail and this is why you have a shortfall to cough up in order to settle. This would not have been an issue if the vehicle was under 12 months old since leaving the factory.

Your choices include:

*Claiming on your insurance to get full settlement but you will pay the excess
*Find a dealer who is willing to sell you a new car with discount - put the discount towards settling the shortfall with your finance house after the 3rd party insurance pays out.
*Settle the shortfall out of your pocket.
 
The principles are straightforward:

1. To insure an item you must have an insurable interest. It is up to you to agree the extent of that insurable interest with your insurance company.

2. When you finance a vehicle, the finance provider also has an insurable interest, and he usually makes his loan contingent on you insuring the car to at least the value of his exposure, ie the extent of the outstanding balance owed by you to them.

3. When you suffer a loss caused by another party, your action is against the other person, not their insurance company. So, you bring an action to recover your loss. If you are partly to blame (eg through some contributory negligence), there is an apportionment of damages as laid out in statute and precedent, and the other party (assisted by his insurer) will make an offer accordingly. You negotiate, and if no agreement is reached, the matter goes to court.

4. If your vehicle is insured for the benefit of the financier, then of course the insurer is interested only in settling to that extent and not to the extent of your loss.

My advice is: Bring an action against the other driver for the full extent of your loss. Include also the consequential damages you suffered, such as having to hire a replacement vehicle whilst yours is indisposed. You need to take reasonable steps to mitigate your loss, of course, and can't rent a car of much higher value/condition, etc.

Do not bother to deal with the insurance companies, unless your have signed over rights to your own insurer, which complicates matters for you.

If the difference between the other party's settlement offer and your real loss is R12K or less, bring an action for recovery of the balance in the Small Claims Court. Otherwise you'll have to take it to the Mag Court or higher, and you'll probably need a lawyer to assist you (though not strictly necessary, if you know what you're doing).

Bottom line: Insist on full recovery of your entire loss. Don't get involved in convoluted discussions with insurance companies - they often browbeat and bamboozle their clients with legalese. Of course, my advice only applies if you are prepared to pursue the matter to the courts if need be. If not, you've already delivered yourself into the hands of the insurance companies, and you have to maar accept what they offer.
 
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Arthur said:
Do not bother to deal with the insurance companies, unless your have signed over rights to your own insurer, which complicates matters for you.

.
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By taking the policy the insurer has first option as per the policy
Only if your insurer waives their rights you may proceed with legal action.
Subregation.

Claim from your policy. Your CFG/NCB shouldn't be affected and insist on your excess back. You can advise the insurer that you then want to proceed with a civil claim for the rest of your financial loss.

Ensure that all extras and betterments to the vehicle are included in the settlement ie new engine/mags/low milage etc. The value the car is insured for will be the limit though.

Sorry but you should have a broker and this would be his job to advise and fight for you. If it's a direct insurer your fight will be more tedious.

Good luck
 
You mean subrogation.

This is no way prevents the OP from recovering the full extent of his loss from the person who caused it. Insurance contracts are private treaties and do not affect the rights of the plaintiff and defendant in respect of aquilian actions, but only to the extent that the insurer acquires subrogated rights and to the extent of the indemnification.
 
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Katjies27 said:
My insurance will pay out the retail value and the third party insurance will only pay market value, so I get more if I claim on my insurance.

Really super disappointed that I don't have top-up cover. I will most definitely inquire about that when insuring a new car.

I have a 2008 Opel Corsa, I bought my car in October 2013 so in my eyes it is brand spanking new!

Thanks for the responses guys :) have to face the music I guess.
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If the chop admitting to be at fault, claim from your policy, and your insurer must recover the excess from them and refund that to you.
If you are then still short, you should have taken top up cover as mentioned.
 
Fazda said:
Oh hell!

That is precisely why I insist that my customers take out Top Up insurance which will bridge the gap between settlement and what the insurance company pays out. Whoever did the finance with you needs a fat crack if they didn't offer it to you.

I doubt if his insurance will come to the party, so it looks as if you are up a creek without a paddle, I'm afraid. :(
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Yep My Insurance broker actually advised me on this, they don't offer the service but told me to either get it from the dealer or finance After reading OP's story, glad i listened to em and got it
 
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