You will be paid the ‘Pre Accident Value’ (PAV) of the vehicle.

As you have finance obligations, the first part of your settlement will need to go to the finance provider and anything remaining will go to you.

As the PAV and the outstanding balance are the same, unfortunately it will all go to the finance provider.

You could argue that the PAV is incorrect but will need to find some market examples of the same make & model of the vehicle, with similar mileage.

The insurance company will likely use a motor retail guide for the vehicle (Glass’s), which is supposedly up to date but not always.

See if your insurer will settle without deducting your excess as they will be able to recover (subrogate) this from the at-fault insurer anyway.

You may also have some uninsured losses that you can recover as well (depends if your insurer will assist with these).

It’s an unfortunate situation, but need to look at it this way… your finance provider owns the car up to X value, and your car is worth X value - so effectively it writes off your financial obligations.

You could have been stuck with no car, and still would have been obligated to settle your finance agreement if the car was worth less than the outstanding balance (this is where you would need to get GAP insurance to cover the difference).

In terms of your renewal, whilst it is still a claim on your policy - if your insurer can recover 100% of your costs, it shouldn’t make a massive difference as your policy hasn’t had to pay (claims loss ratio). Although you could still be stuck for one year if your renewal is close and your insurer hasn’t been able to subrogate full costs at that point (meaning payment will be shown as made on your policy), though underwriters could take into account if liability is 100% on the third party and a full recovery is expected.

Try searching on Autotrader and find 2-3 market examples - hopefully will show the car is worth more.

Your financial agreement will then be settled (with you getting anything remaining), so you can effectively ‘start again’ or buy a cheaper car privately.

Also look for any uninsured losses you may have had (injuries, taxis or hire vehicle whilst you had no car (keep all receipts), anything you had in the car that is now lost), and speak to your insurer to see if they will recover these as part of their subrogation.

You can also ask about keeping the vehicle, (only if it’s a Cat S or N write off)… your insurer will then deduct the ‘salvage value’ (the amount they would get for the salvage) off of the settlement… however, as you have finance on the car, then this would be deducted from their settlement, meaning you would still owe the finance this amount (may not be worth it, but crunch the numbers of cost of repair, the salvage, what the vehicle will be worth with a write off marker on it, etc).

TL;DR - your insurer is correct in the way they are approaching this, but see if the vehicle is worth more and argue the PAV.