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Here’s an interesting post from a Journo regarding insurance companies, who often try and underpay you, when paying out for a car if it has been written off…

Drivers are furious that insurers are slashing thousands of pounds from payments for written-off cars.

The insurance industry has clear guidelines for dealing with write-offs but your stories have convinced us these are being abused. Money Mail has pledged to tackle the Dirty Dozen tricks used to extract cash from your pocket. And this insurance scam is driving people round the bend.

When your car is written off, the pain of any injuries can be compounded by the dirty tricks of insurers.

The rules for dealing with written-off cars are clear. Industry body the Association Of British Insurers says car insurance companies must offer you a proper payout for the value of your car.

This means you must be offered a sum that will allow you to buy a similar car in a similar condition in your local area. All the insurer should deduct is the excess you agreed to when taking the policy.

The problem is that car prices are negotiable, and it is rare for the driver and insurer to agree on what a car is worth.

Insurers play on this. They know you are likely to need a new car quickly so pile on the pressure to get you to accept a payment.

They have a series of tricks at their disposal to get their way:

TRICK 1: THE CRAFTY OFFER

The insurance company offers a payout that is close enough to the actual value of your car to be realistic, but low enough to save it a few hundred pounds.

Frequently this will be a trade price. This breaks ABI guidelines because it is not a price a normal person could realistically expect to pay.

Sometimes the settlement will be based on a general valuation of your type of car that gives no consideration to your region or the season.

In some parts of the country certain vehicles will cost more. For instance, Land Rovers may be in higher demand in rural areas, so the cost is likely to be higher.

Some cars have seasonal price variations.

Soft-top cars get more expensive in spring and summer, so you should not accept a valuation based on what it would be worth in February.

TRICK 2: THE CHEQUE

Frequently the insurer will phone telling you the car is a writeoff.

Then a cheque with their estimated value will arrive in the post.

This is normally accompanied by a letter saying that by cashing the cheque you are agreeing to the settlement and cannot challenge it.

Insurers hope that by avoiding any discussion drivers will think the settlement cannot be negotiated.

This has caught out a number of Money Mail readers, who believe they have been left with no recourse to complain having cashed the cheque without realising the consequences. Unfortunately this is grey area. The Financial Ombudsman Service expects insurers to be up front about the implications of cashing a cheque.

But beware — drivers who do cash in a payment are usually seen as accepting the settlement.

TRICK 3: COURTESY CAR

Most insurance companies will offer a courtesy car when yours is written off, usually for a fixed period such as a fortnight. Don’t be fooled into thinking you will be able to have a courtesy car until your dispute is settled.

Normally four days after your settlement cheque arrives you will be expected to hand it back whether you accept the payment or not.

This pressures drivers into accepting the payout because they need transport…