A question about insurance

A guy hit my car and accepted responsibility. His insurance broker has asked me to get a quote for repair which I did today. It turned out to be $2500 which is about $1000 more than the value of my car!

The damage to my car is more of an inconvenience and I really don't need to repair it. Is there anyway I can negotiate a cash payment from the insurance company instead! If I approached the insurance broker about this option would I be jeopardizing things for myself!

I don't think you can jeopardise anything simply by being honest. As you know insurance companies will always try find a way of paying nothing or less, I can't see any reason why you can't go to the other persons insurance company and say "hey the car isn't even worth $2500, how about we come to some other arrangement"

Legally though, I don't know where you stand.

I've been out of the insurance and total loss field for a number of years now (so pardon me if I get aspects of this wrong in a modern context) but assuming you don't carry insurance yourself, you're deemed by his insurer to be an "uninsured third party".

Once the repair quote has been submitted to his broker, the insurance company will generally appoint a loss adjuster, whose job it is to determine the value of your vehicle (which you CAN contest, but you will need at least one independent Pre-Accident Valuation or PAV) and then weigh that against the quoted repair bill for your car. In 99.9% of all the cases I saw like yours, in three years of working in insurance salvage disposal and valuation, the insurance company would deem your vehicle an economic write-off and offer you a cash settlement for the pre-accident value of your car.

They then assume title to your car and sell it, usually at Turners damaged vehicle auction.

You won't be jeopardising anything by speaking with the broker or loss adjuster, but just don't mention your assumption of value until they offer you a settlement figure- in case it's higher than you think it is!

Usually it takes a few days / week to get things moving, right now the industry is flat out working through the "holiday backlog" as panelshops etc get back from the break, so adjusters are running of their feet.

The economics are pretty simple really- say your car has a PAV of $2000 (agreed between you and the insurance company). Damage repair- $2500. The adjuster might get the quote down to $2000 at another shop (it's quite possible) and also might supply the parts to repair from their own network (in particular, AMI do this) to a repair bill (real) of $1600.

However, they figure your car will make around $800 nett after sale costs at auction (if it's just cosmetic damage, and they are able to keep it registered) so $2000 less $800 wreck salvage = $1200 nett loss to the insurer. Versus repair cost of $1600- a no brainer, they will elect to pay you out rather than repair the car.

Good luck!

Thanks for the information westyn. Very interesting. So does this mean they will essentially purchase the car off me! But I don't want to sell it, I need a car!
I have insurance although it is only 3rd Party Fire and Theft.

Keep in mind that you are not bound by their (the insurance company's) "rules" because you do not, and never had had a contract between yourself and them with respect to your car.
As you rightly point, you need your car and do not need to sell it, or be inconvenienced anymore than you have already.
They need to "put it right" and them buying it at a value that then places you in the position of not being able to buy an equivalent car for that money does not do that. You need to insist on being placed back in the same situation that your were prior to the event, after all you have done nothing wrong, and what suites them from an economic perspective has shag all to do with you.

A good reply westwyn, only a couple of things incorrect.
1. The loss adjuster will not determine the value of the vehicle.
They will no doubt appoint two independent valuers for a PAV instead.

2. AMI do not procure their own parts.

Other than that.bang on.

Guys, thanks for your posts. I will wait and see what the insurance broker says

Yes you can negotiate, you won't get the $2500from the insurance company , they could write your car off and get close to $1000 bucks from it so that saves them, ask to keep your car and also $1000 - $1500 buck and close the deal. They will do this, just talk to them and negotiate. Good luck.

The OP is dealing with the at fault party's insurance broker, not his own insurance company, why would he need to ask to keep his car, it already belongs to him, not the other person's insurance company.