Cash Settlement on insurance for car insurance

[gtpornstar]

Hey anyone know the legalities (and not opinions please) on if you have the right to ask for a cash settlement on damages that you are claiming from insurance ? I have an incident (not my fault) that i want to take to the other insurance company (not mine) and claim the lowest of 3 quotes.

Does this sound legal/proper ?

[RS13]

I'm pretty sure they average it out, thats' what they did with my Pulsar when it got crashed into. But then again, the lowest of three quotes? I'm sure they won't mind paying you less than they have to?

[matt dunn]

Wont always happen,

as the price you drive in off the street and get a quote of, is usually not what the insurance will pay the repairer,

as a lot of the insurers supply their own parts etc now.

You can ask, but you may not recieve, ( but you may too).

[iOnic]

Probably not the same situation but when my car was damaged by a transporter last year I sent them a quote for the repair work and they sent me a cheque for the full amount and the guy I dealt with at the insurance company jokingly said I could even buy the parts off trademe etc and do the repair myself for a fraction

[Mad Murphy]

Insurance companies don't pay retail price for anything, they always pay trade price. I do a lot of insurance claims (not on cars) and the prices we give to insurance companies are trade not retail. I would assume they have the same deal with panel beaters.

[stolic]

depends on the insurance company, but generally speaking they do not have to cash settle you on any claim. They can insist that repairs are carried out, and legally they will be right. This is not just because they my get a better deal from a repairer, but also, by having repairs done it is seen as full and final settlement of a claim. Imagine if you will, you get a cash settlement then go fix your car yourself. a few months later you fail a wof or find more damage. An insurance company doesn't want to be stuck dealing with these issues months down the track. now if you're just talking about a broken light or something minor you may be fine, but serious damage could be a different story.

you can but only try, but at the end of the day and insurance company is only legally required to return you to your position prior to the incident ie undented car. But some insurance companies also adopt a moral position of not allowing damaged or poorly repaired vehicles back on the road hence they will insist they assess and repair the vehicle (if it's not a write off)

[blindnz]

In my experience i have had they will take the average of the quotes and if you are after a cash settlement they would take out some discount. i.e 30% less than that average.

[gtpornstar]

thanks everyone for their responses.
For arguements sake what if i sold the car as it is for a reduced price to someone ? (reduced due to the fact it was accident damaged and the reduction the amount of the quote to fix) Would the insurance company still be able to insist that they repair it.

Stolic - I understand what you mean but surely a letter signed passing on any indemnity to the insurance company for the settlement would be clear enough to isolate them from any grievance ?

[blindnz]

Usually if the insurance pays out they have ownership of the car. Therefore you cant sell it.

[stolic]

thanks everyone for their responses.
For arguements sake what if i sold the car as it is for a reduced price to someone ? (reduced due to the fact it was accident damaged and the reduction the amount of the quote to fix) Would the insurance company still be able to insist that they repair it.

Stolic - I understand what you mean but surely a letter signed passing on any indemnity to the insurance company for the settlement would be clear enough to isolate them from any grievance ?

If you sold the car, then you could have a hard time gettin an insurance company to complete the claim as they could dispute the value you placed on the car (value - damages = sold for) . But to answer your question directly, no they couldn't make the new owner to squat, but then you don't have the car so you couldn't prove your loss either. Most of the time the insurance co will only force issues with vehicles that are written off, not so much for minor damage. this is because write offs need to be deregistered, but sometimes people wanna keep the wreck and don't want it dereg'd. in this case people offer to sign all sorts of things to get around it, but it doesn't matter. it's all about intent. people want a wreak to stay reg'd cos they intend to dodgy it up and put it back on the road. imagine a 12yr old buy a gun, but signing a letter for the shop owner that sez he's never gonna use it. the shop owner would still be liable if someone got hurt, as would the insurance company.

as for your hypothetical situation...best thing to do, and I'll assume you've sold, or are selling the car. Take some pics, get a couple of quotes. maybe even spend $60 or so and get a pre-accident valuation done. This will prove your claim to $$$ worth of damage. then float it with the insurance co and hopefully they will cash settle it. you could say that at the time of the accident you had someone interested in buying it and have proceeded with sale less damages.

makey sensei?

[stolic]

Usually if the insurance pays out they have ownership of the car. Therefore you cant sell it.

only if it's a total loss settlement for a write off, not a cash settlement for damages.

[blindnz]

true, forgot it wasnt written off

[gtpornstar]

Stolic - Thanks bud for the insight, i suppose where i am coming from is i dont have any agreement with the other persons insurance company therefore i dont have to accept 'THEIR' terms. I was thinking the law would basically protect the person that received the damages and that the person who received the damages has the right to receive this amount in either cash or the form of fixing the car. I would have thought that since i have no agreement with them that decision was ultimately mine to make ?

Car is not sold or being sold but i want to take the money and fix the car later with other things. Possibly a new colour change and kit.

[stolic]

Stolic - Thanks bud for the insight, i suppose where i am coming from is i dont have any agreement with the other persons insurance company therefore i dont have to accept 'THEIR' terms. I was thinking the law would basically protect the person that received the damages and that the person who received the damages has the right to receive this amount in either cash or the form of fixing the car. I would have thought that since i have no agreement with them that decision was ultimately mine to make ?

Car is not sold or being sold but i want to take the money and fix the car later with other things. Possibly a new colour change and kit.

All good mate, I'm happy to help,
But you should know it's not really "their" terms you're complying with, but the terms set by the insurance council of NZ which in turn creates NZs insurance LAW. These laws do protect you to the point that damage caused to you/your belongings is rectified and you are returned to the position you were in directly before the accident. How they do this is their choice but 9 times out of 10 the easiest way to be sure a claim is fully settled is to repair the damage, and by the letter of the law they are well within their rights to repair your car to the point it was before the accident. Insurance co's will always retain the right as to how a claim is settled as this prevents fraud which was epic in the USA yrs ago (basically get smashed but roadworthy car, have "accident", claim $$$ then do it all again in a few months with the same car, same damage) having said all that tho, sometimes there's just less paperwork to do by settling with $$$ so talk to them and you may get what you want anyway.

best way to look at it, your car got damaged, so if they fix it then they've done what they're suppost to. you didn't have money taken from you so if they settle you in $$$ then bonus for you.

[gtpornstar]

thanks for the response bud.
So where is the line drawn between insurance law and law of damaging someone elses property. What i mean is if there was no insurance involved and i took this to small claims or similiar they would award me based on evidence that they were in the wrong and would be for the sum not for the actual service if you get what i mean ?

[MAD FX]

Hmm should've checked this thread sooner, actually know something about this, LLB + 10 years in the industry...

I've known a lot of people to settle in cash, just have to sign a waiver saying its full and final settlement.

You're also right, you have no contract with the other insurer, only your own, so its a claim in tort, ie their client crashed into you, they're liable to you, but they have bought insurance to cover them so have passed their liability on through a contract to an insurer. Same as if your insurer fixes your car, and then subrogates (ie sues in your name) against the other party, or in this case their insurer.

So they will settle with you as a civil matter, law not involved (well it is but its been settled for the last 100 or so years) and they just settle. As for the formula, not sure, all companies will be different but they probably want a few different quotes from their own approved repairers or something. They may even do it for you if they're big (eg Vero) and have their own centres where you can take cars in, they take photos and post for repairers to quote on.

That part about not allowing roadworthy cars on the road, that is a company stance not a legal thing, and probably is to protect themselves, but then the cash settlement negates that.

True some companies supply parts, I believe its only State though, they have a car importing business bringing in non-compliable cars for parts.

One thing I'm not sure on though is the impact of the knock-for-knock agreement. It may be that they just tell you to go to your own insurer to repair it since they may not have to pay them. (K4K is where the major insurers have agreed that they won't recover from the other insurer for any domestic motor claim under $10k, its cheaper not to in the long run). Probably not though as theoretically you have a claim in tort against their client, so could take them to court independent of your insurer, if you haven't claimed.

So yeah, go for the cash settlement, you'll probably get it.

Just my 2 cents worth

[gtpornstar]

Thanks buddie, thats what i was thinking was the case, thanks for taking the time to clarify, some good info - I certainly didnt know about the K4K thing between insurance companies!

Will update this thread if something drastic happens