In a no fault accident why do I have to fight my own insurance company?

I was recently involved in an accident when my car was deemed to be a write off. The other driver had comprehensive insurance and her company (AAMI) rang me to say it was completely her fault. For the past three weeks I have spent countless hours on the phone to my insurance company (RAA) They offered me a derisory amount for a well maintained car with fewer than 60,000km, on the clock. I have finally got them to agree that I do have an insured OR market value policy whichever is the greatest. Now I’m waiting to find out what they think the market value is. I’ve done loads of research, but after my recent experience I foresee another fight. Why isn’t the other driver’s company liable for the payment? And why is my own company so lacking in support? Has anyone else had a similar experience?


Hi @maryrhodes, welcome to the community and I hope no one was injured when the car was written off.

They are, but what usually happens is your insurer will pay you the deemed market/agreed value of the car, and then seek resolution from the at fault driver’s insurer.

Your insurer needs to be able to substantiate the settlement they made with you.

It may be possible to deal with the other driver’s insurer directly, making a claim against the other driver’s policy, but this may mean you may have to forgo extras such as car hire and their assessment of the market value may be low (they are unlikely to entertain agreed value and it is in their interest to reduce their own costs/liabilities).

This is surprising, have they offered car hire and pro-rata refund on registration/compulsory 3rd party. These should also include in your settlement.

Also in relation to agreed and market value, check your policy to see how these are determined. It might not be what you think they are and you need a clear understanding when negotiating what you believe is a fair settlement.

If you believe you are being unfairly treated, this website provides information on the processes to follow for dispute resolution:


From this statement, am I correct in saying RAA have offered to pay out the agreed value on your policy?


Hi Peter
Thanks for your helpful reply. What happened was that I paid my insurance on 24th Sept and received my policy stating that I was insured for market value or $3,400, whichever was the greater. On 1st October they sent out a new PDS saying they now only insure for the stated value - ie $3,400. I argued that they had accepted my money and issued my policy before this took effect. After many phone calls, the dispute resolution people at RAA decided I was correct. The trouble is that second hand car prices are sky high at the moment. RACQ says the value is between 2,200 and 4,300, Cars Guide says between 2,400 and 4,700. Because the car was well maintained and had a very low mileage I would argue the higher price is more appropriate. Mozo says between 2020-2021 cars on Gumtree and Cars Guide went up more than 25%. A almost identical car on Gum Tree was asking $5,000. Others with much higher mileage were nearer $6,000. I know these prices are aspirational but they are an indication of the market. The PDS states “In determining the market value, the internet, newspapers and industry guides may be used.”
I was insured for car hire for two weeks, but didn’t use it because we have my husband’s car and I didn’t need it at the moment.
Actually when AAMI rang me they offered me a hire car - as well as asking if I was OK. Fortunately neither of us was hurt in the accident - I was driving well under the speed limit. A friend suggested I sue the other driver, but I couldn’t do that to a young girl who made a silly mistake.
I know insurance companies are not benevolent institutions but I have been an RAA customer for 47 years without making a claim. They may eventually make a reasonable offer, but after the way they have tried to wriggle out of the policy, I’m not holding my breath! They even had the cheek to try to blame me for not reading a PDS which did not exist at the time my policy was issued!


Sorry. I replied to your questions in my response to Peter. Pressed the wrong button. Thanks again for your help.


It is worth noting that if you insured based on agreed value (even if there is the flexibility of also comparing this with market value and taking the higher of the two), you have in effect agreed in taking out the policy that your car has a value of $3400.

I expect that RAA would provide a market value within the range you have indicated, but since you have agreed your value is around $3400, it is likely that they will assess the market value as a similar amount. I expect it would be hard for them to justify a higher price (also see below).

A higher price would however be achieved when pro-rata refund on registration/compulsory 3rd party is included in the settlement.

You should also receive the whole amount, that being you should not have any deductibles/excess to pay. It is possible they may ask for the excess to be paid, with it to be refunded when the other parties insurer ‘pays’ for your claim. I would resist paying any excess especially when all parties acknowledge that the other driver was at fault. Sometimes excesses are requested when the fault is still uncertain/unknown.

That is true for cars which are relatively new, but the impact on cars with some age is minor (if at all).

Newer vehicles values have increased post-Covid as their new model can take some time for delivery (up to 12 months or more in some cases). Some consumers are unwilling to wait to replace a older vehicle, and opt for a relatively newer (used) model instead (these are known as ‘near-new used substitutes’). This demand has caused some used can prices to increase - but not all. There are also reports that the peak on near-new used car substitutes has passed and prices are slowly returning to normal.

Based on the value of your vehicle, it appears that it may have some age to it and it is unlikely that any temporary increase in used car prices due to restricted new car availability, will have little impact on the value of your vehicle.

The only vehicles with some age which are likely to increase in price are those which are seen as collectable or unique…and there is possibly demand for such vehicles by specialist buyers.

BTW, we also have a vehicle with age (2003 model and date of manufacturer), in very good condition and low mileage (just ticked over 100K a few days ago). When renewing our insurance, we check what the market value is of each insurer and also the maximum agreed value which can be insured. The range of agreed value varies significantly between insurers (market values were similar and expect they use the same databases). We have opted to pay a bit more (about $50/year) to insure with the maximum available agreed value ($5460), which is about $1000 above the next maximum agreed value we could find ($4500). Some insurers had a maximum agreed value in the mid $3Ks.

I relation to market value range, the RACQ website indicates the same model of car as out own with normal mileage/condition would be in the range of $1,700.00 – $3,200.00.

If we have to provide evidence to why we believe our car has a very high agreed value should be be written off (touchwood it doesn’t happen like it has unfortunately happened to you), this should be relatively straight forward as our car mechanic is also a car assessor and has indicated that its value is possibly more than that which is it insured…we can ask the mechanic for a statement of value if ever needed.


Thanks for taking the time to answer in such detail. It’s a bit depressing because I’m going to be several thousand dollars out of pocket. Besides the car I lost 9 months of my comprehensive insurance policy. It was indeed an older model -2007- but it would probably have lasted the rest of my driving career. My husband says look on the bright side. I could have been killed. What a little ray of sunshine he is!


This may also be included in the settlement for the car, pro-rata reimbursement for the insurance not used. See what the Product Disclosure Document (PDS) says about policy cancellations. Many policies state that if a policy is cancelled, they will refund any premium covering the rest of the period of insurance.

It might be worth contacting RAA promptly to trigger the cancellation because the longer you leave it, the more of the 9 months will be chewed into (less monies reimbursed). Cancelling now shouldn’t impact on the settlement with RAA/the other driver’s insurer (make sure you confirm this with RAA when cancelling).

This happens with most insurance. Unless it is new for old type policy (which exists for home and contents), the replacement cost is often more than the value of the item being replaced. This is particularly the case for those which look after their products well and they have more attachment value than just dollars.

Insurance is about sharing the risk.

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This is a factor that may not be considered by RAA in determining the market value of the vehicle. Market value is normally defined as the typical selling price of that make/model/year of car, rather than the price your specific car might have sold for. Unfortunately it’s a pitfall many people fall into when relying on market value.

As someone who works in insurance, I would never take a market value policy myself. The reason being is there would be little ground to argue the insurer’s assessment of what the market value is. Insurance is a complex topic and it’s sad to hear it wound up working out poorly for you.


I thought market value was the amount a dealer would pay not the ‘free market retail value’ a private seller might achieve. As such, it would be the wholesale price guidance from sources such as Redbook. Yes? No? Maybe?


You’re correct that it is a wholesale price (ie normally doesn’t include tax/rego). Different dealers would offer different prices, just like private sale. That’s what I mean when I say typical selling price


“In determining the market value, the internet, newspapers and industry guides may be used.”
This is what the PDS in force at the time my policy was issued said.


‘may’ is the operative word.

Are essentially the wholesale value guides dealers use.


They’ve got you all ways! I’ll report back when they finally make a market price offer. Not holding my breath.


Consider that an agreed value policy may be the lower premium, given there is certainty for all parties. For both our now near 2 decade old vehicles the policy savings in agreed value vs replacement (subject to market value) became an important consideration.

Is there a point in the age of a vehicle where it’s unlikely a replacement of similar age is a practical option, vs a much newer second hand or brand new vehicle. As noted the relative condition of your personal vehicle is unlikely to be replicated exactly by the market, (collectors specials excepted).

It’s disappointing that after many years or decades of paying insurance there is a matter of a thousand or so dollars of disagreement. For the policy premiums paid over the years, each year stands alone, and for older less valuable vehicles, insurance covers protection more of your risk of destroying the neighbours Bugatti than damage or loss of your car. Consider your insurer will also set out to recover their payment to you from the other insured, assuming they can?

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Agreed value policies typically have a HIGHER premium from my understanding. The reason being cars typically decrease in value over time, where an agreed value doesn’t allow for that depreciation during the policy term. Market value policies may also exclude factors like GST/Stamp Duty, where someone taking out an agreed value policy may insure for the price they actually had to pay for their car inclusive of those.

Well, that’s how it used to work at least. Whether it remains true in the year that is 2022 is another matter

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Just received my settlement. $6,299. A HUGE improvement on the $3,400 I was offered at first. It really is worth persevering! After that I’ll stay with RAA . Thanks everyone for the helpful comments. I’ve learnt a lot about vehicle insurance.


Yes they are. Some crazy insurance stuff happening at the moment because of price rises, unfortunately insurers aren’t falling over themselves to keep us appraised of the potential impact.

Collectible/unique market values were always worth watching closely and there are folks who’ve been well underinsured when a particular model or make (VE/F HSV of late) has an unexpected increase for whatever reason, but the recent rise in used car prices has broadly affected regular cars. A recent review of my own policies at renewal time was enlightening to say the least when I asked what the current market and agreed value max would be.

Wholesale price excludes dealer markup and IIRC isn’t used for calculating sum insured or replacement value. Wholesale is even less than the woeful offers dealers make for trade-ins.

Yes! Whenever I see the words ‘may’ or ‘calculate’ in a PDS I go cold and ask for detail such as how exactly do they ‘calculate’ and what determines whether they ‘may’ or may not do something. That’s when you find out they ‘may’ use the horribly outdated RedBook as a value reference; if they have discretion to discount RB as being out of touch that’s not so bad but if they have to include it in some sort of formulaic ‘averaging’ exercise look out. The plain english PDS is a great step but it sometimes has downsides.

They once did, agreed val was typically higher than market val as it accounted for allowable modifications, above average condition etc. Recently market values have been overtaking agreed values and folks have been getting caught out thinking that this could never happen but now it has. Also it pays to be honest about the condition of the car, previous damage etc as if you present with a written off car that you valued at max agreed or market at the time of taking out the policy and it’s subsequently found to have hail damage or a dented fender the insurer is well within their remit to reduce their payout.

@maryrhodes IMHO it’s worth going through this one carefully. Some of the insurer behaviours I’ve seen recently, driven by the underwriter - eg Suncorp in the case of Shannons and several others but I’m not necessarily suggesting they fall into this category - have been simply a case of blatant ‘trying it on’ and treated as such by the relevant arbitrator eg AFCA. One example is a panel shop calculating the cost of repairs to a particular collectible vehicle as 33k and being offered 18k. Needless to say the owner pursued them through the relevant agency and after an independent assessment the underwriter was ordered to pay the 33k. This is only one crazy example I’ve heard of in the last 6 months. Unfortunately the people you initially talk to at the RAA or any other insurer may know less than you do, I’ve been badly mislead twice by call centre staff at my own insurer but luckily dug my heels in.

Insurers and underwriters in particular have become more shark-like recently so it’s important to know exactly what you’re paying for. Sadly no one in the industry is conducting an email campaign advising customers that they need to review their situation particularly in relation to increasing used prices and sums insured.

Also the law varies from state to state but in NSW if the repair value plus the salvage value as estimated by an auction house exceeds the sum insured the insurer has the option to declare a total loss ie write it off and pay you the sum insured. Assume you buy a car for 20k, insure it for that amount, and have an accident 8 months later. In that time the replacement cost has unbeknown to the owner actually risen due to Covid madness etc to 25k. Say the cost of repairs is calculated at 10k (a modest repair bill these days if done properly) but due to the cost of parts increasing as a result of supply chain issues the wreck is worth 11k, it’s an almost automatic write off albeit at the discretion of the insurance company and you’re out of pocket for a replacement by 4k. Unfortunately a few folks are getting caught out by this too. I do believe an underwriter was recently challenged and lost the case where they sought to pay out a sum insured that was vastly lower than actual market value but this isn’t an outcome I’d bet on going forward.

Apologies all for the long post.


I agree. You have to really persevere. The final market price RAA gave me was almost $3,000 more than the initial agreed valuation. The main problem I had with them was that they changed the PDS about a week after I had renewed my policy. I had renewed as soon as I received the notice - two weeks before the premium was due because I’m always afraid of forgetting. The trouble was getting anyone to listen to this. Once they agreed that the policy they had issued said agreed OR market value, whichever is the higher, they moved quickly and I am very happy with the payout. It has been a stressful few weeks, but worth it in the end.


@maryrhodes well done :grinning: