Apologies for the long post but it may prove useful to someone out there.
Something to remember with insurance is this. The basic premise is that insurance is there to put you back in the position you were in before the loss. Nothing more. Nothing less.
So, this brings to the fore the argument I have had on numerous occasions with Brokers. Take for example my X3. I have to insure it for supposed RETAIL value which is currently R428k because that is the "book value" (that book to me is utter shyte!!)
If i look on the interwebs for identical spec X3's I cannot locate any 2013 models with similar mileage (140k kms) but there are a few with the same spec. And the asking prices are in the mid to late R300k range.
So where does M&M get their values?? We are told that it is an average of the sale prices achieved for the vehicle in the previous 2 months (I am open to correction here). Well if that were true, the prices would be higher on Car/co.za etc etc.
So that's the one side of the coin. The flip side is the example of the Citigolf earlier in this thread. You have 2 options with car insurance. Option 1, a valued policy where with supporting documents, you say I want to insure the vehicle for a sum of money. I did this with the 540i. It was insured for R100k even though book value was R68k. In the event of a total loss / theft, I would be paid R100k. Period.
Option 2 is that you insure the car for the book value that the Insurer tells you to insure it for. That is going to be as per "the book". So you have the situation develop where the car is totalled like the Citi was.
Your claim turns on what the insured value was but here's the thing. You say you paid R65k and they offered R28k 6 months later. If you overpaid for the car, well then the valued policy route would have been best. If however, Outsurance told you that's what you had to insure it for then lowballed you you have further options. Ombudsman is one but of course is lengthy.
The other option which folks miss is directly linked to my first sentence in this post. (insurance is there to put you back in the position you were in before the loss.....). So , when faced with this scenario you are quite entitled to say to your insurer that you don't want to be paid out, you want your car replaced like for like. (ie put back in the position you were in before the loss.)
The insurer can then go and source a similar vehicle and deliver it to you. When this is put to insurers, the game changes very quickly.
We have just concluded this exact fight with a large motor insurer on behalf of my colleague in respect of a mint condition Corolla RXi. These cars are selling for up to R 100k. The car was insured as per book value for R58k. The car was involved in an accident and the insurer wanted to write off and pay my colleague out R45k. (a myriad of reasons were given including his mileage being high etc etc).
We simply said, please replace the car like for like. The matter settled after 3 weeks of jousting with the insurer settling at insured value. My colleague then bought the scrap back for R35k and is repairing it for R23k using Toyota parts. (the cheapest quote was for R41k).
Insurance is a business like any other and they will always seek to maximise the profits. But not to my detriment is my attitude.
