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Old 25.10.2020, 21:55
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Car liability insurance refusing to reimburse full damage

Situation: a person had a car accident and broke a garage door in a building. The door need to be replaced, but the driver's liability insurance refuses to pay the full replacement cost, limiting the payout to the amount equal to the amortized value of the garage door, which is apparently only a small fraction of the replacement cost. So the building owners are on the hook for almost all the costs.

This doesn't seem fair. In a car-car traffic accident, the damage is reimbursed in full, up to the full replacement value of the damaged car. In the case of the garage door, the only difference is that a new door has to be installed - there is no way to buy a used door of the same age as the broken one.
Is there any way to contest the insurance company decision?
Thank you for any advice.
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Old 25.10.2020, 22:07
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Re: Car liability insurance refusing to reimburse full damage

This is normal, and does also apply to vehicles - if someone writes off your 20 year old car, unfortunately they don't buy you a new one.

(I'm sure if they did there would be a huge market in old bangers that get involved in suspicious accidents a month later!)
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Old 25.10.2020, 22:13
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Re: Car liability insurance refusing to reimburse full damage

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This is normal, and does also apply to vehicles - if someone writes off your 20 year old car, unfortunately they don't buy you a new one.

(I'm sure if they did there would be a huge market in old bangers that get involved in suspicious accidents a month later!)

Yes, I understand this. Fortunately, for cars, there is a used car market - if somebody totals my 20 year old car, I can easily buy another 20 year old car with the insurance money, so I don't suffer any financial loss.
In this case, the building owners have no choice - they have to repair the door, and it costs a lot. So, they have to pay for the damage caused by someone else. Doesn't seem fair at all.
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Old 25.10.2020, 22:17
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Re: Car liability insurance refusing to reimburse full damage

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Yes, I understand this. Fortunately, for cars, there is a used car market - if somebody totals my 20 year old car, I can easily buy another 20 year old car with the insurance money, so I don't suffer any financial loss.
In this case, the building owners have no choice - they have to repair the door, and it costs a lot. So, they have to pay for the damage caused by someone else. Doesn't seem fair at all.
The life of the door is finite - at some point it was going to be replaced at cost to the residents, so over a long period the total cost is the same.

I agree it makes less sense for things that aren't replaced very often, so there's a chance you would never have replaced it. On the other hand, a new door is less likely to break in the near future, so maybe you win and maybe you lose.

Overall it's hard to see a more reasonable solution - full replacement just puts up insurance costs and could lead to more resistance to pay out.
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Old 25.10.2020, 23:33
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Re: Car liability insurance refusing to reimburse full damage

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In this case, the building owners have no choice - they have to repair the door, and it costs a lot. So, they have to pay for the damage caused by someone else. Doesn't seem fair at all.
To illustrate: If the door cost 100, and has a usual life of 20 years, that's 5 a year.

In year 1 after installing the door, the owners ought (if they were model owners with very good planning for repairs and amortisation) to have put away 5 (plus a bit for inflation or new technology of the future) to save for replacing the door in 19 years' time. Next year, they add another 5, so their door-replacement-fund now contains 10. In year 3 they add another 5, bringing their savings up to 15.

By the time the car smashed the door, let's say, in year 17, they'd have almost saved up enough to replace a door. Their pot contains at least 16 x 5, perhaps a little more, waiting in readiness for replacing the door.

The rest, that would cover the remaining, not-yet-depreciated value of the door, is what the insurance pays out.

Apart from that, they could still try to get the person who caused the accident (and not that person's insurance company) to cover any additional costs they may have.
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Old 26.10.2020, 08:16
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Re: Car liability insurance refusing to reimburse full damage

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Apart from that, they could still try to get the person who caused the accident (and not that person's insurance company) to cover any additional costs they may have.
That would never happen as the insurance company (second party) is fully indemnifying the driver (first party) against third party claims. Any insurance settlement is based on full & final settlement.
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Old 26.10.2020, 09:47
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Re: Car liability insurance refusing to reimburse full damage

Thank you. I understand the principle. Often, these things last a lot longer without replacement than the amortization would suggest, so financially this still hurts. I imagine there is some standard amortization schedule that applies here, the insurance company can't decide this on their own.



Does the same really apply to a simple car accident? I always assumed that, say, if I break someone's headlight in an accident, I (or my insurance) would have to pay the full repair bill for the new headlight, regardless of how old the car is.
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Old 26.10.2020, 10:03
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Re: Car liability insurance refusing to reimburse full damage

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Thank you. I understand the principle. Often, these things last a lot longer without replacement than the amortization would suggest, so financially this still hurts. I imagine there is some standard amortization schedule that applies here, the insurance company can't decide this on their own.



Does the same really apply to a simple car accident? I always assumed that, say, if I break someone's headlight in an accident, I (or my insurance) would have to pay the full repair bill for the new headlight, regardless of how old the car is.
They can pay for a new headlight in full, or write the car off if thats a better deal for them, the car has salvage value. If tyres are damaged they will deduct tree wear.
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Old 26.10.2020, 10:11
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Re: Car liability insurance refusing to reimburse full damage

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They can pay for a new headlight in full, or write the car off if thats a better deal for them, the car has salvage value. If tyres are damaged they will deduct tree wear.

Thanks. Exactly, that's my understanding. In this case, the garage door is just as much part of the building as the headlight is part of the car. Logically, the insurance has to pay full repair cost up to the amortized value of the structure (building).

Would this be any different if the car ran into the building wall? The insurance would need to pay for the full cost of repair I imagine - it's not like the building will get more valuable after the repair, just the opposite.
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Old 26.10.2020, 10:13
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Re: Car liability insurance refusing to reimburse full damage

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they could still try to get the person who caused the accident (and not that person's insurance company) to cover any additional costs they may have.
No.

Tom
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Old 26.10.2020, 10:16
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Re: Car liability insurance refusing to reimburse full damage

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Thank you. I understand the principle. Often, these things last a lot longer without replacement than the amortization would suggest, so financially this still hurts.
It shouldn't, as the assumption is that the needed money has been set away.

The HEV (real estate owner association) and the Mieterverband (tenants association) agreed upon a life time table.

https://www.hev-schweiz.ch/vermieten...sdauertabelle/
https://www.mieterverband.ch/mv/miet...ertabelle.html

A garage door has 20 years.
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Old 26.10.2020, 10:18
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Re: Car liability insurance refusing to reimburse full damage

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Thanks. Exactly, that's my understanding. In this case, the garage door is just as much part of the building as the headlight is part of the car. Logically, the insurance has to pay full repair cost up to the amortized value of the structure (building).

Would this be any different if the car ran into the building wall? The insurance would need to pay for the full cost of repair I imagine - it's not like the building will get more valuable after the repair, just the opposite.
The building wall would be repaired in full, a wooden door would be paid in full. An expensive motorised Swiss garage door would have a limited life so be depreciated. The one at work got replaced twice over 20 years to my knowledge indicating an expected useful life of about 15- 20 years. The original one was replaced at 18 years.

Tom from Ticino would have just fixed it for 500 CHF
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Old 26.10.2020, 10:23
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Re: Car liability insurance refusing to reimburse full damage

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The life of the door is finite - at some point it was going to be replaced at cost to the residents, so over a long period the total cost is the same.

I agree it makes less sense for things that aren't replaced very often, so there's a chance you would never have replaced it. On the other hand, a new door is less likely to break in the near future, so maybe you win and maybe you lose.

Overall it's hard to see a more reasonable solution - full replacement just puts up insurance costs and could lead to more resistance to pay out.
Of course there is a more reasonable solution: the one that causes the damage is liable and responsible for the cost of repair/replacement.

I understand that a 5 year old car can be replaced with another 5 year old car, and replacement value is sufficient (and fair) for coverage.

If someone damages my 5 year old door, it's unlikely that I can replace it with another 5 year old door and I would also have the installation cost.

Shouldn't the one that causes the damage be liable for the full replacement cost, regardless of what the insurance will pay?
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Old 26.10.2020, 10:28
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Re: Car liability insurance refusing to reimburse full damage

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Of course there is a more reasonable solution: the one that causes the damage is liable and responsible for the cost of repair/replacement.

I understand that a 5 year old car can be replaced with another 5 year old car, and replacement value is sufficient (and fair) for coverage.

If someone damages my 5 year old door, it's unlikely that I can replace it with another 5 year old door and I would also have the installation cost.

Shouldn't the one that causes the damage be liable for the full replacement cost, regardless of what the insurance will pay?
It's called 'betterment', legally you can not be better off from an insurance claim, giving you a new door would put you in a better position than you were in. You have to pay for that improved position. If this was not the case, old garage doors needing replacement would often get crashed into so it could be replaced for free.
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Old 26.10.2020, 10:40
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Re: Car liability insurance refusing to reimburse full damage

Thanks, this makes it more clear now. It all makes sense, but it still hurts in the end . It didn't look like the door would need replacement for many years, but it's life has been forcibly reduced to the amortization schedule.


Perversely, this rule means that somebody could go around knocking down any 20 year old garage door and not have to pay a penny.
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Old 26.10.2020, 10:59
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Re: Car liability insurance refusing to reimburse full damage

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Thanks, this makes it more clear now. It all makes sense, but it still hurts in the end . It didn't look like the door would need replacement for many years, but it's life has been forcibly reduced to the amortization schedule.


Perversely, this rule means that somebody could go around knocking down any 20 year old garage door and not have to pay a penny.
I suspect they would have to pay something, just closer to zero than the full cost. If you could show the mechanical parts & motor had been replaced at 18 years then they would have to pay out a lot more.
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Old 26.10.2020, 13:08
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Re: Car liability insurance refusing to reimburse full damage

It could also be something to do with taxation and amortisation of certain items (usually for businesses). If you're writing off against tax annual (or otherwise) depreciation, the book value of the item tends towards zero regardless of the condition of the item. This is usually tax advantageous but you do run the risk of this situation where the item in real life would have a higher value. If you explicitly have a low value for something in the books, the insurance isn't going to pay over that value.
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Old 26.10.2020, 13:57
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Re: Car liability insurance refusing to reimburse full damage

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It could also be something to do with taxation and amortisation of certain items (usually for businesses). If you're writing off against tax annual (or otherwise) depreciation, the book value of the item tends towards zero regardless of the condition of the item. This is usually tax advantageous but you do run the risk of this situation where the item in real life would have a higher value. If you explicitly have a low value for something in the books, the insurance isn't going to pay over that value.
It's quite possible to get a valuation for insurance purposes, book value is irrelevant however may lead to a tax charge on disposal which is often the case.

A new E type Jag bought in 1961 may well be on the books for 1 chf, insurance is about replacement like for like. Buildings would often be depreciated unlike land, replacement value & market value may be very different. I had a flat in London where the rebuilding cost insurance was 3 times the purchase price, listed buildings cost a lot to rebuild, you can't just knock it down.
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Old 26.10.2020, 14:07
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Re: Car liability insurance refusing to reimburse full damage

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The building wall would be repaired in full, a wooden door would be paid in full. An expensive motorised Swiss garage door would have a limited life so be depreciated. The one at work got replaced twice over 20 years to my knowledge indicating an expected useful life of about 15- 20 years. The original one was replaced at 18 years.

Tom from Ticino would have just fixed it for 500 CHF
This. Many things people want replaced could be fixed.

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Thanks, this makes it more clear now. It all makes sense, but it still hurts in the end . It didn't look like the door would need replacement for many years, but it's life has been forcibly reduced to the amortization schedule...
It does. Hurt.
Which is one of the reasons why one driving an old car, which is perfectly good and can last many more years, must drive defensively. Getting hit is just as expensive as hitting in this case.
Except once when I got a lot more money from the insurance than I paid and fixed it for a fraction of it. But that was pure luck (and a MiniMetro who basically nobody drove in Switzerland, it was probably on no list ).
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Old 26.10.2020, 14:15
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Re: Car liability insurance refusing to reimburse full damage

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Of course there is a more reasonable solution: the one that causes the damage is liable and responsible for the cost of repair/replacement.

I understand that a 5 year old car can be replaced with another 5 year old car, and replacement value is sufficient (and fair) for coverage.

If someone damages my 5 year old door, it's unlikely that I can replace it with another 5 year old door and I would also have the installation cost.

Shouldn't the one that causes the damage be liable for the full replacement cost, regardless of what the insurance will pay?
Obviously we all agree with this if we are the recipient.

And all disagree if we would be the one paying.

Hence a set of rules which meet somewhere in the middle.
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