Claims Settlement Deductions: When Can an Old Deduction be Claimed?
A woman had an accident on the highway, damaging the guardrail's impact absorbers. Her insurance company only agreed to cover part of the repair costs, claiming that the new parts were more valuable than the damaged ones.
When a driver causes damage to someone else's property, their car insurance usually pays for the repair costs. But not always the whole amount.
In some cases, insurance companies may use the "new for old" deduction if they think the replaced part is worth more than the damaged one. However, this can be counterproductive if the parts have little or no wear. This situation was seen in a court decision in Bremen (Az.: 4 O 980/23), as reported by ADAC.
Insurance company reduces compensation for guardrail damage
In this case, the woman's car hit the guardrail on the highway, causing damage to the impact absorbers. The cost of repair was calculated to be over 30,000 Euro. The highway management office submitted the invoice to the woman's insurance company.
The insurance company attempted to settle the claim, but for less than the full amount. They claimed that the new guardrail part was worth more than the damaged one. Therefore, they deducted about 7,700 Euro, stating it was an "abatement for depreciation" or a "new for old" deduction.
Is there a financial advantage to using new parts?
The case went to court, and the judgment was in favor of the highway management office. According to the ruling, replacing the impact absorbers did not lead to a measurable increase in assets. These parts lose no value or function with age and are usually only replaced due to damage. No measurable economic advantage is gained in such cases. Therefore, the insurance company was ordered to pay the remaining amount.
The "new for old" deduction is only applicable when the insured party benefits from the new parts being more valuable - that is, they gain from an increase in value. This must be determined on a case-by-case basis.
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- The woman's dispute with her insurance company over the 'traffic accidents' damage to the guardrail's impact absorbers led to a court decision, with the judgment favoring the highway management office because the 'new for old' deduction was not applicable, as there was no measurable economic advantage from using new parts.
- In order to avoid misunderstandings in car insurance claims, it's essential for drivers to understand the 'no-claims class' system and how 'legal issues' related to deductions like 'abatement for depreciation' or 'new for old' can impact their compensation, as seen in the case discussed above.
- With the help of an 'Advisor', drivers can learn about potential 'car insurance' policies and their 'car' coverage, ensuring they receive full compensation in the event of accidents, and avoiding disputes similar to the one experienced by the woman in the highway incident.
- In light of the case, the ADAC, a prominent German automobile association, warned drivers to be aware of the 'car insurance' company's tactics and urged them to seek legal counsel if they feel that they're being unfairly treated about 'traffic accidents' damages and deductions, to avoid unwanted 'judgments' that might negatively impact their financial situation.
