I was involved in a motor vehicle accident. My Insurance company (AAMI) accepted responsibility for the accident was for the other driver. Now AAMI have advised that my car is a "right off" (current agreed Car value = $5450 / their assesment for fix valued at $5000) and for me to recover the car I need to pay them $1000 (taken out of the $5450 agreed value)...and the car will be returned to me "unroadworthy", "uninsured" & requiring a Vic Roads assessment before it can be returned to the road. Is this correct / what are my rights??? As the owner of the vehicle I feel I have no rights and AAMI have all.
I have only been informed of the detail late Thursday. Between damage assesment by AAMI and notification to me was a period of 4 days. I was going to check my rights with the Victorian Insurance Ombudsman. AAMI have impounded my vehicle and have also advised that there may be other damage sustained during the assesment process (eg. due to TOW TRUCK and/or use of fork lift to move my vehicle).
If they have agreed to pay you the agreed car value (less your excess) then effectively they are buying the damaged car off you and you will likely find it is a term of their policy that they will ordinarily retain written off cars so that they can recover its scrap value.
Generally, where an insurer has paid the full write off value of the car, it effectively owns it and is entitled to retain it, and sell or scrap it if it chooses to do so. So if you wish to buy the car back, in its damaged state, then you do need to pay your insurer for it.
If on the other hand they have no paid the agreed write off value of the car, then you may have a good case to complain.
If you have a serious concern that their determination that the car is a write off is mistaken, or that the policy does not entitle them to keep the car, then you should refer the matter to the Financial Ombudsman Service as they can review the policy and circumstances and if appropriate order the insurer to address your claim in an alternate way. The process of making a claim to the Ombudsman is virtually free.
I trust the above assists your understanding.
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Dip Law LPAB - Sydney based lawyer
Thanks for your reply...much appreciated.
At this stage my insurer hasn't paid any amount. My dispute with them has been about the process [or lack of on their behalf]. I haven't sighted their assessment of the damage. I was advised they were going to "right off" my vehicle and prompted to accept their decision. This 4 days after my vehicle was taken for assessment and at a location not advised to me & different to where they said they were taking my vehicle. As owner of the vehicle I'm aghast that I have to pay $1000 to retain my car....this isn't my excess value...that is $400.
If the car isn't a write off, you shouldn't be charged to recover the car, because unless they pay the write off value they aren't 'buying' your car in its damaged state and it remains yours and all repair costs and related expenses are generally covered under the policy.
However, if the damage is very severe, the policy will entitle them to effectively buy the damaged car off you for the write off value. Your premium has been calculated on the basis that the insurer will then keep the wrecked car for salvage or resale purposes so they can recoup some of their loss on your claim.
If the substance of your problem is more to do with their poor processes, slowness or lack of proper consultation or explanation, then the insurer may be in breach of its obligations under the Insurance Code of Practice, and these are matters you can also direct to the insurer's compliance section (which usually deals with reviewing the decisions and conduct of the insurer's claims departments) or the Ombudsman. Although such complaints may not impact significantly on the outcome of your claim.
Although you may feel that the insurer retaining your care is unfair even where they have paid the agreed write off value of the car, were it otherwise, a person in your position would, after your accident, theoretically be in a better position than when they started. This is because you would have the money for a replacement equivalent car, plus the remaining value of the damaged car. Insurance law doesn't generally allow insureds to profit in this way and so policies are generally written so as to prevent such theoretical profits.
Naturally, if they are not paying you the write off value you should complain to the Ombudsman.
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