Car owner loses out after accident

The Insurance Ombudsman (IFSO) has rejected a claim by a car owner against his insurer following a car accident.

The car was a total wreck and was written off.

The owner thought he had an “agreed value” policy under which the insurer would pay the value agreed with the insured.  However, he had actually taken out a sum insured policy which pays out the sum insured or market value (whichever is less).

The market value of his vehicle was $8,000 less than the insured sum, so the insurer was correct to pay out the market value.

The IFSO held that even if the owner had an agreed value policy the sum insured would reduce each year due to depreciation.

The agreed value does not stay the same year after year.  In this case, as several years had passed, the car’s value after depreciation would have been slightly less than the market value.

It pays to read your policy carefully and if f you are having issues with your insurance to get advice from a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.