Market value?

[ldcroberts]

It also suggests that if you had insurance your company would ensure you got that, and then claim it from the other company.

Yes, unfortunately that's not how it works, the insurance companies get the reduced market value off each other then top it up for their customers. Probably averages out so they don't care anyway between them.

You didn't do yourself any favours in claiming regarding the first service, but I think I see where you are coming from. Buying a brand new bike you are immediately 1000km away from the cost of a service. Whereas your bike was past that point, and the next service cost is 4500km(?) away. Was that what you were meaning?

well yes, it's an expected cost, and I purchased oil etc, which was a modification to the bike to improve it, which had an expected life which was cut short. It's value was lost with the bike. The service was just over a month before the accident. If I hadn't serviced the bike it's resale value would be arguably lower.

Being uninsured does put you on the negotiation back foot, in that insurer to insurer dealings always rely on a level of interdependence. You have no such interdependence with whoever you are dealing with. What amuses me is that when an uninsured party is hit by an insured one, the uninsured party is always treated like crap by the insurer (in this case at least medium quality crap). What they don't do is view them as potential customers, or consider the bad publicity that may arise from the dealings - yet spend millions on ads wanking on about how they look after their customers, and why you should switch to them.

This is brilliant insight, there seems to be a fair bit of public sentiment where people have been given less than they feel they deserve for things. I feel a bit sorry for the insurance company employees too - it can hardly be something to bring up at parties talking about how you processed someones claim and saved the company some $$ - I'm sure they only want what is fair too at the end of the day.

I'd be inclined to go back with a counter offer in the mid-high 9s, accepting some loss on the value of the bike but not take a 4 figure hit after 4 months. I'd lodge a disputes tribunal application if that doesn't get anywhere, tribunal referees do refer to law but also apply a level of fairness to their rulings. Bear in mind it may take a while for a hearing date though. Our litigation team at work lodge a number of disputes applications, and often the insurers cave in the day before the hearing.

They have come back with the wording from their processes which is:

----
Market Value
The reasonable cost to buy, immediately before the loss and on the retail market, a
vehicle of comparable:
• year,
• make, model and specification (including fitted equipment covered by this policy),
• mileage,
• general condition,
as the motorcycle that was damaged.
----

As there are actually no bikes for sale to refer to, I am going back to them with the argument that the reasonable cost to buy is what someone will actually sell for - so we would have to find someone who has a comparable bike and see what they would accept - maybe get a written statement from 2 owners that they would actually sell their bike if offered X amount, and then average them. (I find someone, they find someone). Then when they pay me I can buy that persons bike for that price (if I want to)

It's quite the reverse of their system, however I think it's applicable and fair in this situation - fairer than guessing and talking about if someone was forced to sell what a suspicious buyer would pay anyway.

[local]

This listing is for a new bike but last years model

http://www.trademe.co.nz/motors/moto...-581748978.htm

and this seems similar to yours

http://www.trademe.co.nz/motors/moto...-721513470.htm


Cheers

Neither of those seem to be ABS models, which judging by those prices is commanding a $1000+ premium...

[ldcroberts]

Neither of those seem to be ABS models, which judging by those prices is commanding a $1000+ premium...

believe me, ABS is worth the extra $1000, i had to brake hard and hit the car head on, and ended up standing up on the road with only a sprained wrist and groin - not sliding under the car and not screeching on the road with ineffective braking. I've dropped non-ABS bikes before just trying to slow down too fast on the front brake.

[Oakie]

believe me, ABS is worth the extra $1000, i had to brake hard and hit the car head on, and ended up standing up on the road with only a sprained wrist and groin - not sliding under the car and not screeching on the road with ineffective braking. I've dropped non-ABS bikes before just trying to slow down too fast on the front brake.

A sprained groin???!!! Better rub some anti-inflammatory into that straight away ... actually ... hang on a minute ...

[FJRider]

Neither of those seem to be ABS models, which judging by those prices is commanding a $1000+ premium...

The second link was a 2014 model WITH ABS, $8599 + ORC ...and has only 1000 km's on the clock. They mentioned the "Special" model at less than ten grand ....

[discotex]

Nobody thought it was a fair offer to make them part with their bike, some people thought it was about right for an insurance company to offer - perhaps think about the difference.

Look no-one is going to say it's fair that some fucker crashed into you and wrote off your bike. That sucks. Unfortunately. That has no bearing on the definition of market value.

I'm assuming you are going off http://en.wikipedia.org/wiki/Market_value

"the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."

In order to apply that definition you need to understand that the seller is a hypothetical seller, not you. It represents any hypothetical seller that just happened to want to sell their bike for any reason. Perhaps they just wanted a different model.. Perhaps they upgraded to another bike.. Perhaps they want a flash coffee machine instead. Whatever.. The key is the hypothetical person is not acting under duress. Same deal with the hypothetical buyer.

For the purposes of estimating the market value your personal situation isn't relevant. Sorry, that's how it is.

So consider:

Person A has a 4 month old Ninja 300 with ABS and decides to get a new bike so will hope to sell sell privately for the best the market will offer
Person B is a new biker and wants a Ninja 300 with ABS

Person A does want to sell their bike so they will meet the market but won't accept low-ball offers - this is being prudent.
Person B wants a fair deal so will not buy Person A's bike for a RRP $9899 if the exact same model is available new in a dealer and they know they can get probably get a better deal - again bring prudent.

Given the low km and age, the best price for guides for both Person A and Person B would be the IRD depreciation schedule (as I posted for your earlier), or what a dealer would want ex-demo (normally 5-10% off RRP.. perhaps ask dealer for an ex-demo quote).

Following that interpretation, $9k is totally fair and defensible in court. Also keep in mind what you paid has no bearing on market value either. Whether you got a good deal or a got ripped isn't relevant as you are not the hypothetical Person A.

insurance companies becomes owner when it is written off, they get the plates and the refund if any. I could perhaps rightly go and take out the oil as personal property if they don't pay for this, this will affect their salvage value on the bike I suppose

I'm trying to help you here.. Take the advice unless you know what you're talking about.

The registration and ownership are separate things. The registration is cancelled, the ownership of the metal will be transferred to the insurance company to sell as a wreck or destroy.

You are entitled to a refund even if the insurance company file the cancellation of registration. Probably will have to write to NZTA though. See this http://www.nzta.govt.nz/resources/fa...cellation.html

actually they want it in their policy because they don't want to be in a position where they feel they are losing money (which is my situation).

Two different issues.. They expect a new vehicle because it's in the policy. Yes they want it in the policy to avoid this situation. That's why they are paying for full insurance (not your situation). However many policies don't have this clause and may be cheaper as a result. Whatever... It is specific to the policy of the insured, not to the reparation of the third party.

In the case that you still had full insurance it's quite likely that your insurer would be given the fair market value of $9k and they would have sucked up the difference to get you a new bike under the replacement as new clause (as you should be doing).

I'm hoping you're starting to get it now...

I had it fully insured right up to a week before the accident with full cover, then my policy came up for review and I changed to 3rd party to save $400 per year. I only saved 1 week off full cover (F All)

Well that totally sucks for you and honestly I do feel for you. Nothing sucks more than making a (bad) decision and having to deal with the consequences. I almost did the same thing last time I renewed because I don't do many road km these days - mostly do track days. Figured I'd just take the risk on 3rd party for the days I do commute or do weekend rides. But then I realised I'd be gutted if I wrote my bike off (or worse someone else did). Not to mention tempting fate!

[sil3nt]

The second link was a 2014 model WITH ABS, $8599 + ORC ...and has only 1000 km's on the clock. They mentioned the "Special" model at less than ten grand ....

His bike was $9899.00 + ORC which is stated in this thread and on that link. Not hard to understand.

[russd7]

The second link was a 2014 model WITH ABS, $8599 + ORC ...and has only 1000 km's on the clock. They mentioned the "Special" model at less than ten grand ....

no the ABS model is $9899.00 plus ORC that add had three different models listed

[ldcroberts]

Look no-one is going to say it's fair that some fucker crashed into you and wrote off your bike. That sucks. Unfortunately. That has no bearing on the definition of market value.

I'm assuming you are going off http://en.wikipedia.org/wiki/Market_value

"the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."

In order to apply that definition you need to understand that the seller is a hypothetical seller, not you. It represents any hypothetical seller that just happened to want to sell their bike for any reason. Perhaps they just wanted a different model.. Perhaps they upgraded to another bike.. Perhaps they want a flash coffee machine instead. Whatever.. The key is the hypothetical person is not acting under duress. Same deal with the hypothetical buyer.

So consider:

Person A has a 4 month old Ninja 300 with ABS and decides to get a new bike so will hope to sell sell privately for the best the market will offer
Person B is a new biker and wants a Ninja 300 with ABS

Person A does want to sell their bike so they will meet the market but won't accept low-ball offers - this is being prudent.
Person B wants a fair deal so will not buy Person A's bike for a RRP $9899 if the exact same model is available new in a dealer and they know they can get probably get a better deal - again bring prudent.

Given the low km and age, the best price for guides for both Person A and Person B would be the IRD depreciation schedule (as I posted for your earlier), or what a dealer would want ex-demo (normally 5-10% off RRP.. perhaps ask dealer for an ex-demo quote).

Following that interpretation, $9k is totally fair and defensible in court. Also keep in mind what you paid has no bearing on market value either. Whether you got a good deal or a got ripped isn't relevant as you are not the hypothetical Person A.

You are selling a bike to someone else without the hidden expenses of ORC and 1st service - which are another $640 I think I paid - sure some of this is the $45 per month rego and I used 4 months of that so $200. But adding the remaining $440 to the $890 they are shaving off, its $1330 - getting up there for depreciation - now you are talking 10-15% rather than 5%.

IRD allow you to claim 31cents a kilometer for business use - that covers depreciation, wear and tear, servicing, petrol, tires, insurance, everything. For the 1700km I travelled, I could claim back $530 as legitimate expenses - at least $150 of this goes straight into the petrol tank as I filled up for $30 every 300km.

So in IRD's eyes, the depreciation/wear/tear on the bike is somewhere around $300 over the 4 month period if you calculate it based on that mechanism.


I'd rather it was based on reality rather than people guessing what someone would sell/buy at. Insurance guys should approach actual owners and say "hey we got a guy here needs a replacement bike, anyone got one same as he had they are willing to sell? - around 1700km on it - yeah? how much do you want for it - we're going to go with the lowest offer of two what's your lowest price? cheers we'll get back to you"

In that scenario you have two actual willing sellers you can average between, a value paid out for a bike you can actually go and buy, and it would be hard to argue it wasn't fair.

What they instead do is say "oh nah people wouldn't sell for that unless they really had too, but if one turns up you might get lucky - here's enough just to cover that if it does happen - good luck."

You are entitled to a refund even if the insurance company file the cancellation of registration.

I will look into this for sure, not sure if they'll let me backdate it to the date of the accident (over a month ago now - took a while for the insurance cogs to turn to this point)

[discotex]

You are selling a bike to someone else without the hidden expenses of ORC and 1st service - which are another $640 I think I paid - sure some of this is the $45 per month rego and I used 4 months of that so $200. But adding the remaining $440 to the $890 they are shaving off, its $1330 - getting up there for depreciation - now you are talking 10-15% rather than 5%.

Look I know you want it to be like that but it isn't. Those are not capital expenses and don't count to the value of the asset. It's like trying to claim the new owner is getting the use of all that petrol you put in it. I've spent thousands service my CBR over the last 6 years.. Obviously you can see none of that has increased the value.

IRD allow you to claim 31cents a kilometer for business use - that covers depreciation, wear and tear, servicing, petrol, tires, insurance, everything. For the 1700km I travelled, I could claim back $530 as legitimate expenses - at least $150 of this goes straight into the petrol tank as I filled up for $30 every 300km.

So in IRD's eyes, the depreciation/wear/tear on the bike is somewhere around $300 over the 4 month period if you calculate it based on that mechanism.

No, the depreciation of the asset using diminishing value (which any sane accountant would) is at 30% per year for motorcycles. Go look it up yourself at https://www.ird.govt.nz/calculators/...te-finder.html

Assuming you paid RRP of $9899 + plates/first rego of $274 = $10173 - you cannot include any other portion of ORC, servicing, or consumables as part of the asset. Of course you'll need your invoice to back up anything taking that angle.

That means after year 1 your bike is worth $7122 (a drop of $3051). Pro-rating 4 our of 12 months would be $1017 in lost value. Take that of the initial price and you have $9156. Co-incidentally that is a 10% drop which a 1400km demo bike would be fairly priced at...

The IRD per km rate is for the business use of a private vehicle. It is not used for calculating the book value of an asset so not use here.

I'd rather it was based on reality rather than people guessing what someone would sell/buy at. Insurance guys should approach actual owners and say "hey we got a guy here needs a replacement bike, anyone got one same as he had they are willing to sell? - around 1700km on it - yeah? how much do you want for it - we're going to go with the lowest offer of two what's your lowest price? cheers we'll get back to you"

In that scenario you have two actual willing sellers you can average between, a value paid out for a bike you can actually go and buy, and it would be hard to argue it wasn't fair.

What they instead do is say "oh nah people wouldn't sell for that unless they really had too, but if one turns up you might get lucky - here's enough just to cover that if it does happen - good luck."

Look that might be nice but it's not how it works. Imagine if they had to do that for every single claim - billions of dollars a year. It's just not possible.

The onus is on you to prove their model is wrong. If they were lowballing you at $7k you could easily push them to $9k with the info I've given you. Going above that is like pushing a metric ton of shit up hill.

Seriously the best you can do is say...

"In lieu of an established second hand market for near new vehicles I have determined the value of my loss based on the standard IRD diminishing value depreciation rate of 30% for motorcycles. Including the capital cost of registration this equates to $9156. I am prepared to settle for this amount."

They will probably throw you a bone to shut you up Push for more than they'll stonewall you and see if you have the gumption to file for Disputes Tribunal.

Seriously... Print out my advice and take it to Citizens Advice and see what they think...

[ldcroberts]

well in their own words they say they pay "the reasonable cost to buy a comparable vehicle."

The closest available comparable vehicle is a brand new one, so the cost is the new price isn't it.

If they really meant they "pay the estimated cost of buying an imaginary vehicle" then why didn't they say that? that's all they are offering after all. I expect they didn't say that because they can't legally stand behind it.

[skippa1]

well in their own words they say they pay "the reasonable cost to buy a comparable vehicle."

The closest available comparable vehicle is a brand new one, so the cost is the new price isn't it.

If they really meant they "pay the estimated cost of buying an imaginary vehicle" then why didn't they say that? that's all they are offering after all. I expect they didn't say that because they can't legally stand behind it.

You are clutching at straws. Discotex is spot on. It's an unfortunate set of circumstances, real bad luck re the insurance decision but a chain of events sees you in this position.
if you search on the forum you will find several threads by people in similar circumstance that talk about their perceived "rights" or what they believe they are entitled to from insurance companies, vs what reality is.

[Jantar]

You do realise that you do not have to deal with the other driver's insurance company at all. As an uninsured party you can simply claim against the other driver and let him deal with his insurance company. That way your claim is for the lesser of the actual cost of repairs ($13,000) or top replace your motorcycle with one of comparable age, mileage and condition.

You would probably need legal assistance, and the cost of that is likely to be more than the difference in the value that you are being offered.

[Katiepie]

My insurer paid me out "market value" of my bike when I wrote it off - It ended up being $800 more then what I had paid through a dealership, so my excess was covered as well. Score for me.

[MarkH]

In the OPs situation I would do this:
Get 3 quotes for a satisfactory replacement of the bike.
Send them to the insurance company and ask them to pay the lowest one.
If they aren't happy with that then ask them to provide a quote for a satisfactory replacement that you can buy and have them pay enough for you to buy it.

Just tell them that you are happy if they pay enough for you to buy a replacement bike & helmet that are no older and in no worse condition than what you had before the crash.

Who gives a shit what you could have sold the bike for, you weren't attempting to sell it.
Replacement value is what you want, what does it cost to replace what you had?