Claiming damages from an insurer is a procedure with a clear sequence of steps. Mistakes are most often made at the beginning, and the consequences show up at the end, when the amount offered does not cover the actual cost of repair.
On what basis you are claiming
First of all it has to be clear who pays. There are two basic routes:
- The third party liability cover of the other party. If the other driver is liable for the accident, you submit the claim to their insurance company.
- Your own comprehensive (kasko) insurance. If you are liable, or liability has not been established, you claim under your own comprehensive policy, within the cover you agreed.
These two routes have different deadlines, call for different documents and use a different method of calculation. Read the policy before you report the claim.
Steps in the procedure
- Documenting the scene. Photographs taken before the vehicles are moved and a properly completed European accident statement or police report.
- Reporting the claim. You report to the insurance company within the deadline set out in the insurance terms. Do not delay, because late reporting can become a reason for the claim to be contested.
- Inspection of the vehicle. The loss adjuster acting for the company inspects the vehicle, lists the damage and draws up a report.
- Calculation of the loss. The cost of repair is established, or the damage is declared a total loss if repair is not economically justified.
- Offer and payment. You receive a calculation with the amount offered.
The documents you will need
- The European accident statement or the police report
- Driving licence and vehicle registration document
- The policy under which you are claiming
- Photographs of the damage and of the scene
- A repair estimate or a workshop invoice, if the repair has already been carried out
- Payment details
When the amount does not match the actual damage
This is the most important part of this article. The amount offered can be lower than the actual cost for several reasons:
- Hidden damage has not been included. Part of the damage only becomes visible during dismantling.
- Depreciation has been applied to parts, so a new part is calculated at a reduced amount.
- The calculation uses prices that do not match the actual prices of parts and labour at the workshop that suits you.
- The diminished market value of the vehicle after the damage and the repair has not been calculated.
- The vehicle has been declared a total loss on the basis of a value lower than the realistic one.
In all of these cases you have the right to request an independent damage assessment. The report of an independent appraiser is the basis for an objection, for negotiation with the company and, if it comes to that, for court proceedings.
In a total loss, the value at which the vehicle was calculated is also crucial. We have written separately about how the value of a vehicle is established and what the catalogue value is.
Depreciation of parts, the most disputed item
In claims under third party liability cover, a deduction for depreciation is often applied in practice to the parts being replaced. The logic is that by fitting a new part to an older vehicle the owner receives something more valuable than what they had.
The problem arises when the deduction is applied to parts where it is not justified, or when the percentage is higher than usual for that age and condition of vehicle. This is one of the most common places where an independent report shows a difference.
When damage is declared a total loss
A total loss is not declared because a vehicle looks badly damaged, but because the cost of repair exceeds a certain ratio to the value of the vehicle. That is why, in a total loss, the value of the vehicle matters just as much as the damage assessment.
If the value of your vehicle is established lower than it really is, a total loss will be declared sooner and you will receive a smaller amount. We wrote about how value is established in the article on the catalogue value of a vehicle.
Diminished market value after repair
A vehicle that has suffered significant damage is worth less on the market even after a high quality repair. That difference is genuine loss and can be claimed, but it is rarely calculated on its own initiative. It is established separately, by comparing the value of the vehicle before and after the event.
Recourse, when the insurer asks for its money back
If the loss has been paid to the injured party but there are circumstances in which the liable driver loses the right to cover, the company can seek repayment of the amount paid out from that driver. In such proceedings both the amount of the loss and the course of events are often disputed, so an independent report is useful to the party from whom recourse is sought as well.
Deadlines and patience
The deadlines for dealing with a claim are laid down by regulation and by the insurance terms. Keep your correspondence in writing and keep proof that every document was handed over. Nobody can confirm a verbal agreement later on.
What if you are a company with a fleet
With fleets the loss is not measured only by the amount of the damage, but also by the time the vehicle spends out of use. That is why we take over the whole process, from reporting the claim to returning the vehicle to the fleet, through our fleet assistance service.
For advice about a specific case call us.
Frequently asked questions
Can I ask for a cash settlement instead of a repair at a workshop?
In most cases you can choose between a repair and a cash settlement, but that depends on the basis of the claim and on the terms of the particular policy. With a cash settlement the calculation is more often reduced on account of depreciation of parts, so it is worth checking both options before deciding.
Why did the insurer reduce the amount because of depreciation?
Because a new part is being fitted in place of a part that was already worn, so it is taken that through the repair the vehicle gains slightly more value than it lost. What is disputed is how large that percentage is, and this is the item most often successfully challenged with a reasoned expert report.
What should I do if the amount offered is lower than the actual damage?
The first step is an independent damage assessment, which shows where the difference comes from: from the prices of parts, from labour hours, from the extent of the damage or from depreciation. An objection to the calculation is then submitted with that report.
Can damage be claimed if the vehicle has already been repaired?
It can, but it is harder. You need photographs of the damage taken before the repair, invoices and a specification of the parts fitted and the work carried out. That is why it is important to photograph and keep everything before the repair begins.
