Total loss? Not necessarily
What happens to your crumpled tractor once the insurance compnay has written it off? Brendan James reports
WHEN applied to agricultural machinery and motor vehicles, the term "total loss", as used by an insurance company can be totally misleading.
Most of us take it to mean the machine or vehicle is kaput, not repairable, but to an insurance company it means something else entirely. They put a machine or vehicle classified as a "total loss" into one of four categories:
A Lightly damaged – which usually covers stolen vehicles and machines recovered after the claimant has been paid.
B Can be successfully repaired and made safe to use, but beyond economic repair by the insurer.
C Can be sold for spares.
D Pure scrap.
Of the four (B) is the most confusing. Subject to their policy terms, even claimants who would prefer a good repair job are instead paid an amount in compensation and the damaged machine, now owned by the insurance company, is subsequently repaired and sold.
This anomaly arises because UK insurers only allow repairers to use manufacturers original parts. They are only just beginning to consider using cheaper non-original branded parts, and they never use even less expensive used parts.
By contrast, insurance companies in the USA and the Nordic countries are successfully exploiting a constantly renewable source of used parts that is also widely available in the UK.
Over here individuals are already catching on to the bargains offered by upmarket dismantling firms selling used parts at 30-50% of the cost of new. There is a huge selection, they are available nationwide through a next day delivery service and they come with reliable guarantees.
Unfortunately, insurance companies are lagging behind, but some are beginning to look at the possibility of reducing costs and premiums by tapping a supply source fed by their own successful selling policies.
Who then are these dismantling firms, and exactly what do they offer? Well, for a start, they provide UK insurers (who do not sanction the use of used parts) with a financial benefit by recovering stolen and accident damaged vehicles.
Several specialise in agricultural machinery, and selected dismantlers are also supported and assisted by 75% of UK motor manufacturers through The Consortium for Automotive Recycling led by the Rover Group. Consequently the NFU, and other big insurance companies sell almost all their vehicles classified as a total loss to dismantling firms who are members of the National Salvage Group, or similar part location groups such as Find-a-Part.
Most members, who do not specialise, collect vehicles from a designated local area. Others, like W J Furber Vehicle Dismantlers, a Shropshire firm, which has specialised in agricultural machinery for more than 30 years, collects nationwide and re-sells all over Europe.
"Todays farmers are different to the way they were 20 years ago when broken machinery could be kept,"says Mr Furber. "Now it is fully insured he cant keep it, and anything he makes a claim on is collected by the insurance company."
Contracts with these companies, the NFU and other leading insurers, are now the source of 90% of Mr Furbers stock. Repairing damaged machines is his real expertise, but he admits used spares are big business for them.
A founder member of both Find-a-Part and the NSG, most of his customers now come from these sources. Both schemes use a computer controlled system to match used parts required by buyers with the stocks of professional dismantling firms.
Clearly, with so many different makes and types, each containing thousands of parts, individual members would not be able to supply the right part every time. But collectively they stand a much better chance.
Alison Carey, general manager of NSG says: "Locating a part is simple, one phone call alerts an operator to search the national network and a guaranteed replacement part will then be despatched via a next-day delivery service." *
Independence Day – and the end of the world as we know it? This scene of carnage is, in fact, a valuable source of reasonably priced spare parts.
Tractors and cars come in for similar treatment at many salvage yards.