An Introduction to Car Insurance claims
and the claiming process
Denial of Liability under the Policy
by the Car Insurers
Occasionally the insurers are faced with a claim where there
is no cover evidentually in force under the policy.
This may arise in one of three ways:
i) The policy does not indemnify the person claiming, e.g.
the policy is restricted to a named driver who was not driving.
ii) The policy does not cover the particular claim, e.g. the
vehicle was being used for a purpose not covered by the policy.
iii) The policy does not cover the vehicle, e.g. there has
been a change of vehicle without notification.
Under i) there is nothing that the insurers can do. They realise
that eventually they may have to meet a heavy third party
claim as the ‘insurer concerned’ under the M.I.B.
domestic agreement if the driver himself has no effective
insurance cover.
Under ii) the position is more complicated. If the insurers
repudiate liability in respect of the claim they will avoid
having to pay the ‘own damage’ claim (if any)
and the third party property claim (again, if any).
They may, however, have to pay the Road
Traffic Act claim by reason of the avoidance clause, for
example, under s.148 of the Road Traffic Act 1972 They are
then in the position of dealing with the claim, not as the
‘insurer concerned’ under the M.I.B. agreement,
but as the insurer under the policy.
They can, therefore, exercise their rights under condition
2 and the policyholder has to agree to their settlements and
to acknowledge their right of recovery from him (see the terms
of the avoidance clause).
In practise, this ‘right of recovery’ may prove
to be worthless if the insured does not have the means to
reimburse the insurers, and if the damages which have been
paid to an injured third party, and which are the subject
of the recovery action against the insured, are substantial
most insurers will conclude that it is pointless to go extra
expense with the action and will not pursue the matter if
there is little real prospect of a successful recovery from
the insured.
The insurers have always to consider their position if they
decide to repudiate liability under the policy. There may
be a potentially large Road Traffic Act claim, and in certain
circumstances it may be to their advantage to accept the policy
as being in force and the deal with the claim accordingly.
If they do this they will (unless the claim is dealt with
under the avoidance clause) lose their right of recovery from
the policyholder, but they will retain the right to deal with
the claim as they think fit. The right of recovery from the
policyholder may not be worth anything, but the right to control
the negotiations is sometimes worth a great deal.
The position under iii) is equally complicated. It is assumed
that the car insurers do not have to deal with the claim under
the ‘driving other cars’ extension. Before the
advent of the ‘blanket’ certificate, the insurers
were entitled to maintain that they were not interested in
the claim and could not become interested as the ‘insurer
concerned’ because they had not issued a policy which
purported to insure the vehicle. The ‘blanket’
form of certificate now commonly in use relates to:
“Any motor car the property of the policyholder or hired
to him under a hire purchase agreement.”
Because of this wording it can be argued that the insurers
are in the ‘insurers concerned’; notwithstanding
the fact that the insured has failed to notify a change of
vehicles: the certificate in the insured’s possession
covers ‘any vehicle owned by him…etc’ and
whilst the insurers might be able to repudiate any liability
in respect of a third party property damage claim or in respect
of the insured’s own damage, they would still have to
deal with any claim for third party bodily injury in the terms
of the Road Traffic Act. Here again, the car insurers would
obtain the insured’s undertaking to reimburse them before
they actually make any payments but, as has already been discussed,
this right of recovery from the insured could well prove worthless.
Car Insurance Claims
Frequently asked questions
What
should I do if I have an accident
Where
can I find an Accident Claims Solicitor
What is the role of the
Motor Insurers Bureau
What are Car Insurance Claims?
How is
the Claim Process controlled?
Fire
Theft & Acident claims explained
What is on
a Claim Form?
How do
I know I'm if I'm covered
Why
would a car insurance company deny liability?
What
is an Insurable Interest
How
do I go about getting the damage repaired?
What are approved
repairers?
Who pays
for towing charges?
What happens
if my car is a write off?
Who decides
my cars market value?
What
was the World's worst car insurance claim?
If you are looking for information on how to claim or what
to do in the event of an accident please visit your particular
insurers website by following any of the links on this site.
.
If you are involved in an accident whether fault or non fault
you should never admit liability.
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UK
Car Insurance Online
