Imported Vehicles and Insurance Valuations

[enodreven]

Hi,

 

On www.motorhomefun.co.uk, there is a discussion regarding what insurance companies would payout on an imported vehicle if it were written off etc. There appears to be a concern that some insurance companies may only pay out the cost of the vehicle in the country it was purchased in. The case they are discussing its the USA but would/could this be the same for other imports??

 

This raises a number of questions as to how insurance companies settle claims on imported vehicles, as the registration documents clearly state if the vehicle was imported by the registration dates. and as hardly any vehicles are made in this country how do the main manufacturers overcome this problem e.g. Fiat from Italy etc.

 

Are vehicles that haven't been imported directly by their respective manufacturers classed a "grey Imports" and if they are, will insurance companies pay the full UK value if one of these vehicles is damaged.

 

If they won't pay the full UK value then it must raise a question over the price you would/should expect to pay for one of these vehicles in the UK ? and could directly affect the resale values ?

 

Interesting does anyone work in the insurance industry as it would be helpful to know how they view this type of situation

 

??

 

[Dave Newell]

That's an interesting point Brian. I have no idea how insurance companies work it out but one situation springs to mind. Let's say I go to Belgium and buy a motorhome that in the UK would cost me £40,000 but I get it for £35,000 on the road, registered etc. I then have an accident and the 'van gets written off. Should the insurance company pay out more to me than I payed for the motorhome in the first place? In other words if they pay me the £40,000 UK value I've actually made £5,000 profit from my accident.

 

D.

[Guest JudgeMental]

 

I imported this year from Belgium saving over 10k. I told insurers what I paid for it. Presumably its insured at that value and not UK retail which is substantially more? Why would I expect to get more for it?

 

I appreciate the temptation when insurer asks you the "value" to quote UK price, but I would have thought this would be problematic if a total loss occurred. Also with an inflated valuation, would it not increase cost of present insurance? at the end of the day they will only pay out what you can substantiate.

 

US imports are a different ball game, as duty and VAT can add over 40% to price *-)

 

 

[Basil]

Hi,

 

Just spoke to my nephew who is an claims assessor for a major UK insurer and he says that it doesn't matter what it cost as the payout would be on market value at the time of the accident unless you have new for old cover when they would payout up to (!!) what you paid on your purchase invoice. This may not include any extras fitted at the time or after delivery unless you stated to the insurance company about them at the time of insuring or added them after AND the company accepted them as insured items.

In the case you cite you would get the market value placed on the imported van as adjudged by the insurance assessor who should have that relevent information available as well as taking soundings from collegues abroad.

I always wondered what his job involved.

 

Bas

[enodreven]

Hi, Basil ?

 

Thanks for that information, am I reading it correctly are they suggesting that you would proberbly only get back the value of the vehicle as it would be in the country of orgin at the time of the claim ??

 

Brian

 

Basil - 2007-10-25 3:05 PM

 

Hi,

 

Just spoke to my nephew who is an claims assessor for a major UK insurer and he says that it doesn't matter what it cost as the payout would be on market value at the time of the accident unless you have new for old cover when they would payout up to (!!) what you paid on your purchase invoice. This may not include any extras fitted at the time or after delivery unless you stated to the insurance company about them at the time of insuring or added them after AND the company accepted them as insured items.

In the case you cite you would get the market value placed on the imported van as adjudged by the insurance assessor who should have that relevent information available as well as taking soundings from collegues abroad.

I always wondered what his job involved.

 

Bas

[Rayjsj]

Basil - 2007-10-25 3:05 PM

 

Hi,

 

Just spoke to my nephew who is an claims assessor for a major UK insurer and he says that it doesn't matter what it cost as the payout would be on market value at the time of the accident unless you have new for old cover when they would payout up to (!!) what you paid on your purchase invoice. This may not include any extras fitted at the time or after delivery unless you stated to the insurance company about them at the time of insuring or added them after AND the company accepted them as insured items.

In the case you cite you would get the market value placed on the imported van as adjudged by the insurance assessor who should have that relevent information available as well as taking soundings from collegues abroad.

I always wondered what his job involved.

 

 

Bas

 

 

Isn't the idea of Comprehensive Insurance to put you back in the posistion you were in before the 'Incident' occured ? otherwise Why Bother ? I always keep reasonably up to date adverts in the Motorhome press, of Vehicles as near as damn it the same as mine, model,year and extras as far as Possible. Two or three examples if possible what THEY are asking for them is what I Expect from my Insurance,less any excess of course. Is that unreasonable ?? What happens in Practice ? there must be people out there with the experience.

Just checking to see if I am wasting my Premium money. :D

[Hughmer]

The key phrase in this thread comes from Bas's nephew.

 

Market value.

 

This is not the price advertisers might ask, which as we all know is always a starting point for negotiating a price.

 

As I have found to my cost in the past, market value (of cars) is taken to be the "trade price" quoted in the likes of Glass's or the CAP guides. This is the price a dealer might reasonably expect to pay another dealer or member of the public when buying in a vehicle where there are no other considerations like a part exchange. It may be as much as 40% lower than the forecourt price to take account of wages and overheads (and greed).

 

So I'm afraid adverts are not a very good guide as to how much an insurer would pay out in the event of a total loss.

 

 

[Mel E]

It's a basic principle of insurance that you should not be better off after a claim than before.

 

If you bought a m'home abroad for, say, £30,000 that costs £40,000 to buy in the UK, then it really doesn't matter if you put £40,000 on the proposal document - you will never be paid more than £30,000, which is what it would cost you to be in the same position you were in before the claim.

 

Comfort made this quite clear to me when I last imported a new motorhome. When, eventually, the UK value of the m'home drops below what you paid for it, then normal practice is to offer you a payout based on a similar make/model/age at a UK dealer. All this assumes a write-off, of course. Restitutional repairs would normally be arranged by the insurer and paid for at prevailing UK rates since, in this case, there is no benefit to you wherever you bought the vehicle.

 

Mel E

====

[Mel E]

Hughmer,

 

The last time I had to deal with a write-off of a 5 year-old car, the insurers paid the average of two prices being asked at dealers for a similar make/model/age of vehicle, less a small amount for negotiated discount, since I had no car to part exchange.

 

I certainly did not lose 40%. I negotiated a slightly higher settlement and was indeed able to replace the car with similar. The insurer was Direct Line.

 

Mel E

====

[Guest JudgeMental]

 

I had a total loss 3 years ago on a double cab pickup truck. Insurance company valued it at 12k and this was what they were going for at the time, So I was pleased. I was more pleased that car was parked when it was hit and written off or else my wife could have been seriously injured or worse....

[Basil]

enodreven - 2007-10-25 4:02 PM

 

Hi, Basil ?

 

Thanks for that information, am I reading it correctly are they suggesting that you would proberbly only get back the value of the vehicle as it would be in the country of orgin at the time of the claim ??

 

Brian

Hi Brian,

 

After reading your reply I have spoken with him again and can confirm that is what he is saying. A post made earlier that you would continue to get what you paid for an imported vehicle until the value equalised with a UK purchased one is also not correct according to my nephew. He would assess (bearing in mind he is an insurance assessor) the value compared to similar equivelent foreign vehicles and you would recieve the market value to enable you to buy another imported vehicle to the current value of your origional import. The insurance company would not allow you to 'better' your current position, e.g. your total write off would attract the value of a van that could be bought abroad for the identical registration year and condition. He states that this is one reason that a lot of companies will not insure 'Grey' imports (certainly in the case of cars), not wishing to become involved with the additional work involved with a claim and also why policy excesses for imports are normally higher (again certainly in the case of cars).

 

Bas

[Basil]

Mel E - 2007-10-26 10:47 AM

 

It's a basic principle of insurance that you should not be better off after a claim than before.

 

If you bought a m'home abroad for, say, £30,000 that costs £40,000 to buy in the UK, then it really doesn't matter if you put £40,000 on the proposal document - you will never be paid more than £30,000, which is what it would cost you to be in the same position you were in before the claim.

 

Comfort made this quite clear to me when I last imported a new motorhome. When, eventually, the UK value of the m'home drops below what you paid for it, then normal practice is to offer you a payout based on a similar make/model/age at a UK dealer. All this assumes a write-off, of course. Restitutional repairs would normally be arranged by the insurer and paid for at prevailing UK rates since, in this case, there is no benefit to you wherever you bought the vehicle.

 

Mel E

====

Hi Mel,

 

But if you were paid £30000 you would be better off than before your claim as your vehicle would have depreciated from the time you bought it, therefore as I understand it you would not get £30000 you would get the current 'Market Value' of your vehicle i.e. £30000 less your depreciation and equivelent to the value of a similar 'grey imported' vehicle, which would of course be less than a UK equivelent.

 

Bas

[Guest JudgeMental]

 

lets be clear here, sourcing a motorhome from Europe is not a "Grey import"

 

You are purchasing goods from within the European community.

 

Grey imports are goods from outside Europe. Thailand. Japan etc....

[Basil]

Hi Judge

 

Sorry if it offended you, seems to have touched a nerve, but my understanding was that any vehicle that was sourced by anyone other than the official dealer was a 'Grey' or 'Parrallel' import, it is not where it was bought that makes it this but the fact that it was not imported by the recognised importer, hence grey or parrallel import.

I have seen nothing anywhere that defines it any other way.

 

Bas

[Mel E]

Basil,

 

You are entirely correct about taking depreciation into account. I was simply trying to keep my example as simple as possible by assuming full first year replacement - as is, I think - normal for most policies.

 

You are also right in saying that, once it's older, they'd assess its value against similar, personally imported vehicles. However, in my experience, once the motorhome is more than about 5 years ols, there is no difference in price between the UK-dealer-sourced original and the personal import. There certainly never has been with my (private) sales.

 

Mel E

====

[Basil]

JudgeMental - 2007-10-26 1:21 PM

 

 

lets be clear here, sourcing a motorhome from Europe is not a "Grey import"

 

You are purchasing goods from within the European community.

 

Grey imports are goods from outside Europe. Thailand. Japan etc....

As we want to be clear here perhaps as a starting point you would like to read the following see

 

http://en.wikipedia.org/wiki/Grey_import_vehicles

 

I once had a second hand Honda CBR 600 that was imported from Spain and was still a Grey import. I also had a new Honda CBR100XX direct from Japan that was also a grey import. I have also owned a Eunos Roadster that was a grey import.

It is quite clear to see on a vehicles V5c if it has been imported either new or second hand.

I don't really understand why you have a problem with the terms they describe what you and many others own, it'sonly a problem if you are trying to decieve someone when you are selling.

 

Bas

 

Bas

 

[Dave Newell]

JudgeMental - 2007-10-26 12:39 PM

 

 

I had a total loss 3 years ago on a double cab pickup truck. Insurance company valued it at 12k and this was what they were going for at the time, So I was pleased. I was more pleased that car was parked when it was hit and written off or else my wife could have been seriously injured or worse....

 

Eddie, pardon me for being dense but what relevance has this to the subject? Was the pickup a personal (grey?) import? Did you receive more from the insurance than you had paid for it?

 

D.

[Basil]

Mel E - 2007-10-26 2:11 PM

 

Basil,

 

You are entirely correct about taking depreciation into account. I was simply trying to keep my example as simple as possible by assuming full first year replacement - as is, I think - normal for most policies.

 

You are also right in saying that, once it's older, they'd assess its value against similar, personally imported vehicles. However, in my experience, once the motorhome is more than about 5 years ols, there is no difference in price between the UK-dealer-sourced original and the personal import. There certainly never has been with my (private) sales.

 

Mel E

====

 

Thanks Mel I thought that was correct. Perhaps when you sold your five year old ones though the buyers were not savvy enough to realise that if you sourced the same vehicle abroad it would be even cheaper, in the same way as people buying new in the main don't realise they are cheaper.

When I have looked at second hand deals abroad, as well as on the dealer lists aimed at the UK, the offers for second hand vehicles are generally considerably lower than the UK equivelent.

 

Bas

[Guest JudgeMental]

Dave Newell - 2007-10-26 2:49 PM

 

JudgeMental - 2007-10-26 12:39 PM

 

 

I had a total loss 3 years ago on a double cab pickup truck. Insurance company valued it at 12k and this was what they were going for at the time, So I was pleased. I was more pleased that car was parked when it was hit and written off or else my wife could have been seriously injured or worse....

 

Eddie, pardon me for being dense but what relevance has this to the subject? Was the pickup a personal (grey?) import? Did you receive more from the insurance than you had paid for it?

 

D.

 

Yes Dave it was a personnel import from Cyprus as it happens. But point was that Mel on previous post had said he had not lost out on his earlier claim. and I was just showing another likewise example. I did not get more then I paid, but more or less secondhand value - not significantly less as others were indicating.

 

Basil, not at all offended! But I am confident that I am correct.

 

example: a Hymer. built in Germany. bought from offcial dealer network in any European country is not a "grey import" how can it be....

 

Now, if purchased from Cyprus ( pre EU) then it would be a grey import. The distinction is quite important as all EU vehicles are type approved and come with COC. Grey vehicles or parallel import versions of what can appear to be identical vehicles can in fact be completely different and require an SVA test to be used on UK roads.

 

Bas, you need to differentiate between import and grey. of course log book will state "import" if purchased from outside the UK but a grey import is from outside of the EU......

 

anyway Bas, a bit academic as I seem to remember you not getting on with LHD.......:-D

[Basil]

Hi Judge,

 

I can only quote two paragraphs from the above link to answer your comments regarding both the terms and its application to the EU.

And I quote

 

"The term grey import, in reference to the grey economy refers to an item that has been imported into a country, legally, but without the agreement of the manufacturer. The term parallel import may also be used. Grey import vehicles are motor vehicles and motorcycles, which may be imported, either brand new or used, from another country, where they are more readily available and competitively priced."

 

And

 

"Grey import are generally used vehicles, although some are brand new, particularly in Europe, where the European Union tacitly encourages grey imports from other EU countries. In 1998, the European Commission fined Volkswagen for attempting to prevent prospective buyers from Germany and Austria from going to Italy to buy VWs at lower prices. It is even possible for car buyers in the United Kingdom to buy right hand drive cars in other EU countries, even in ones that are left hand drive."

 

Now to me that is actually citing Europe as somewhere that Grey or Parrallel imports are made and it is positively encouraged.

Once again I fail to understand your dislike of using the appropriate term.

 

Bas

 

 

[Guest Tracker]

If it helps?

 

Market value to an insurer is the trade or auction value NOT the retail forecourt value which includes things like warranty, valeting and dealer margin.

 

Assuming a vehicle is written off and unless it had been purchased very recently the theoretical payout of the trade or auction value should, in theory, allow you to buy a similar vehicle in a similar condition at auction - ie without servicing, warranty or valet.

 

In reality a similar Motorhome in similar condition is, unlike for example a Ford Focus, a very rare beast and this is where negotiation based on a theoretical value comes in.

 

It is very unlikely that you will ever get a payout similar to forecourt prices because even those would probably be discounted for no p/x.

 

The purpose of all that theory is to put you back to the same financial position you were in before the vehicle was written off, and as it is not a precise science there should always be room for negotiation.

 

Your negotiating position will be further strengthened by documentary evidence of a current warranty, recent service, MOT and tyres etc, mileage, plus documentary and/or photographic evidence of features that would not be on every van (for example but not limited to TV aerial, awning, bike racks etc).

[Mel E]

Judgemental,

 

For what it's worth all motorhomes (and ambulances!) are exempt from both type approval and the SVA, wherever they come from - even the USA or RSA.

 

There are plans to change this in the next few years, but I suspect it will get postponed again, simply because of the complexity of developing a SVA that can 'fit' all motorhomes.

 

Mel E

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