Utter Nonsense From A Major Insurer In Saturday Telegraph
Discussion
I was interested to see a four page pullout including a debunking myths feature. I quote supposed myth and answer in full:
“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
I suggest that this is misleading to say the least…My take on it would be:
Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Why is this insurer (beginning with an A) suggesting something different? Is there a plan for insurers to divvy up the excesses amongst themselves?
“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
I suggest that this is misleading to say the least…My take on it would be:
Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Why is this insurer (beginning with an A) suggesting something different? Is there a plan for insurers to divvy up the excesses amongst themselves?
Edited by Foss62 on Sunday 19th January 09:54
Foss62 said:
I suggest that this is misleading to say the least…My take on it would be:
Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Nope. You're confusing insurers with solicitors. Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Your insurer will pay out for an accident - fault or non-fault, it makes no difference - according to the terms of your policy. They may then choose to reclaim their own costs from the at fault party's insurer under subrogated rights, but that's something they do for their own benefit, not for yours.
It's not your insurer's role to recover uninsured losses for you - be that your excess, a personal injury claim, or uninsured luggage that was in the car and was damaged in the accident. Claiming for any of those things from the third party is your job, not your insurer's (though if you have legal expenses cover your insurer will provide a solicitor to assist you in the process).
That's the theory at any rate. In practice in a clear no fault accident some insurers will offer to waive your excess and collect it themselves from the third party. But if they do so it's as a goodwill gesture - not as something that they're under any obligation to do.
[quote]Why is this insurer (beginning with an A) suggesting something different. Is there a plan for insurers to divvy up the excesses amongst themselves?
Sheepshanks said:
We’ve claimed twice for non-fault accidents (one was a write off) on our own insurer, LV=, and both times they waived the excess.
So I could say the statement isn’t a myth, it’s true.
The only way they could genuinely waive the excess for you, would have been if they were unable to claim from a third party themselves (otherwise they were not out of pocket and collecting an excess from you would have just been profiting from your misfortunes).So I could say the statement isn’t a myth, it’s true.
Your two non-fault accidents could have been in circumstances where there was no insured third party (a fallen tree for example), but this would not be the norm.
Aretnap said:
Foss62 said:
I suggest that this is misleading to say the least…My take on it would be:
Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Nope. You're confusing insurers with solicitors. Where there is a third party (which I imagine is the case in most non-fault accidents - note there was no equivocation about fault in the statement), then the third party pays all losses including those with an excess on the policy. If the non-fault insurer initially pays out, then their responsibility to their policyholder is to recover all costs from the third party or their insurers including those under an excess.
Your insurer will pay out for an accident - fault or non-fault, it makes no difference - according to the terms of your policy. They may then choose to reclaim their own costs from the at fault party's insurer under subrogated rights, but that's something they do for their own benefit, not for yours.
It's not your insurer's role to recover uninsured losses for you - be that your excess, a personal injury claim, or uninsured luggage that was in the car and was damaged in the accident. Claiming for any of those things from the third party is your job, not your insurer's (though if you have legal expenses cover your insurer will provide a solicitor to assist you in the process).
That's the theory at any rate. In practice in a clear no fault accident some insurers will offer to waive your excess and collect it themselves from the third party. But if they do so it's as a goodwill gesture - not as something that they're under any obligation to do.
[quote]Why is this insurer (beginning with an A) suggesting something different. Is there a plan for insurers to divvy up the excesses amongst themselves?
Foss62 said:
That would imply, that in recovering costs insurers would routinely subtract the policyholders excess from their claim against the TP (to spite the policyholder for not taking out legal cover?). And you are calling me paranoid?
Of course they do. Nothing to do with not taking out legal cover. They can only recover costs that they have actually paid from the third party. They can't reclaim your excess because they never paid it themselves - because it's the part of the claim that isn't covered by your policy with them.It's obvious that you don't understand how subrogated claims work. Your insurer pays you £X under the terms of your policy (either directly in cash, or in value of repairs), and you give them the right to claim £X from the third party on your behalf. Not £X+£Y, not the full amount that the third party owes you, just the amount that they've actually paid you. The rest of your claim against the thirsd party is for you to collect yourself.
Aretnap said:
Of course they do. Nothing to do with not taking out legal cover. They can only recover costs that they have actually paid from the third party. They can't reclaim your excess because they never paid it themselves - because it's the part of the claim that isn't covered by your policy with them.
It's obvious that you don't understand how subrogated claims work. Your insurer pays you £X under the terms of your policy (either directly in cash, or in value of repairs), and you give them the right to claim £X from the third party on your behalf. Not £X+£Y, not the full amount that the third party owes you, just the amount that they've actually paid you. The rest of your claim against the thirsd party is for you to collect yourself.
So you are seriously telling us that this is what generally happens with a non-fault insurance claim handled through your insurer? The insurer pays out less the excess and the insured then has to do all the running to get the excess back? This has certainly not been my experience (albeit years ago).It's obvious that you don't understand how subrogated claims work. Your insurer pays you £X under the terms of your policy (either directly in cash, or in value of repairs), and you give them the right to claim £X from the third party on your behalf. Not £X+£Y, not the full amount that the third party owes you, just the amount that they've actually paid you. The rest of your claim against the thirsd party is for you to collect yourself.
I would suggest that the norm is that the insurer includes the excess amount in the payment to the insured and then includes that in their claim to the TP. They may of course call this a waiver, but it is only a temporary one.
Foss62 said:
Aretnap said:
Of course they do. Nothing to do with not taking out legal cover. They can only recover costs that they have actually paid from the third party. They can't reclaim your excess because they never paid it themselves - because it's the part of the claim that isn't covered by your policy with them.
It's obvious that you don't understand how subrogated claims work. Your insurer pays you £X under the terms of your policy (either directly in cash, or in value of repairs), and you give them the right to claim £X from the third party on your behalf. Not £X+£Y, not the full amount that the third party owes you, just the amount that they've actually paid you. The rest of your claim against the thirsd party is for you to collect yourself.
So you are seriously telling us that this is what generally happens with a non-fault insurance claim handled through your insurer? The insurer pays out less the excess and the insured then has to do all the running to get the excess back? This has certainly not been my experience (albeit years ago).It's obvious that you don't understand how subrogated claims work. Your insurer pays you £X under the terms of your policy (either directly in cash, or in value of repairs), and you give them the right to claim £X from the third party on your behalf. Not £X+£Y, not the full amount that the third party owes you, just the amount that they've actually paid you. The rest of your claim against the thirsd party is for you to collect yourself.
Foss62 said:
I would suggest that the norm is that the insurer includes the excess amount in the payment to the insured and then includes that in their claim to the TP. They may of course call this a waiver, but it is only a temporary one.
As I said, many insurers, especialy the better ones, will waive the excess if the accident is clearly no fault and/or there's a rapid acceptance of liability from the third party insurer. But not all. Doing so isn't zero risk for your insurer - there's always a risk that that the third party insurer won't pay after all when further investigations reveal that their driver was driving outside his policy terms, or when three witnesses turn up to say that actually it was your fault. And at the very least, they're giving you an interest-free loan while they wait to settle things with the third party insurer. Which is why not all insurers will do it. No idea what Admiral's own policy is, but as they're at the cheaper end of the market I would have them down as one of the less likely insurers to make goodwill gestures that they don't actually have to make.
Foss62 said:
Sheepshanks said:
We’ve claimed twice for non-fault accidents (one was a write off) on our own insurer, LV=, and both times they waived the excess.
So I could say the statement isn’t a myth, it’s true.
The only way they could genuinely waive the excess for you, would have been if they were unable to claim from a third party themselves (otherwise they were not out of pocket and collecting an excess from you would have just been profiting from your misfortunes).So I could say the statement isn’t a myth, it’s true.
Your two non-fault accidents could have been in circumstances where there was no insured third party (a fallen tree for example), but this would not be the norm.
On the write off (an Argos van) LV had to start legal action as their insurer wouldn’t respond.
Obviously they will have included the full cost in their claim, but it’s nice that it was seamless for us.
Aretnap said:
As I said, many insurers, especialy the better ones, will waive the excess if the accident is clearly no fault and/or there's a rapid acceptance of liability from the third party insurer. But not all. Doing so isn't zero risk for your insurer - there's always a risk that that the third party insurer won't pay after all when further investigations reveal that their driver was driving outside his policy terms, or when three witnesses turn up to say that actually it was your fault. And at the very least, they're giving you an interest-free loan while they wait to settle things with the third party insurer. Which is why not all insurers will do it.
No idea what Admiral's own policy is, but as they're at the cheaper end of the market I would have them down as one of the less likely insurers to make goodwill gestures that they don't actually have to make.
It was actually Aviva, so arguably might be tarred with the same brush as Admiral (apologies for the nautical pun). Your interest-free loan is not a bad description of what probably normally happens but I have strong doubts that chasing the excess after a payout is a big part of the majority of claims. There are many threads even on PH complaining about inadequate non-fault payouts for various reasons, but I can’t remember any about the excess not being paid.No idea what Admiral's own policy is, but as they're at the cheaper end of the market I would have them down as one of the less likely insurers to make goodwill gestures that they don't actually have to make.
Generally when there is discussion about putting in claims directly to the third party and/or their insurers, most people’s advice is to go straight to their own insurers (something I also regarded as sensible). If, however doing this generally turned the claim into a two stage process (with the second part being completely down to the policyholder), this would not be good advice.
Foss62 said:
I was interested to see a four page pullout including a debunking myths feature. I quote supposed myth and answer in full:
“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
This is 100% accurate. If you have an excess on your policy, and you make a claim on your policy, you are responsible for the excess. Regardless of blame. Unless there's some special benefits in your policy (e.g. you don't pay the excess if hit by an uninsured driver).“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
If the accident is non fault, you or your insurers can usually claim back your excess from the tp or their insurer, and reimburse you. If it's non fault and you have all the tp details, some insurers may waive the excess, being confident that they can recover it from the other party.
TwigtheWonderkid said:
Foss62 said:
I was interested to see a four page pullout including a debunking myths feature. I quote supposed myth and answer in full:
“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
This is 100% accurate. If you have an excess on your policy, and you make a claim on your policy, you are responsible for the excess. Regardless of blame. Unless there's some special benefits in your policy (e.g. you don't pay the excess if hit by an uninsured driver).“I do not pay an excess if the accident is not my fault”
“If you make a claim under the car insurance policy you will be responsible for your excess. There may be some benefits offered by certain insurers where an excess doesn’t apply in the case of an accident.”
If the accident is non fault, you or your insurers can usually claim back your excess from the tp or their insurer, and reimburse you. If it's non fault and you have all the tp details, some insurers may waive the excess, being confident that they can recover it from the other party.
1. If you make a claim directly to the third party your agreed excess is completely irrelevant. So no myth there.
2. ‘Responsible’ may be technically correct if dealing through your insurer, but how often does the innocent party walk away from the claims process with a payout less the excess (or have to make significant solo interventions to get that excess back)?
As far as 2. goes, I just can’t see that all dealings between the two insurers would pointedly ignore the excess just to prolong the process for the insured. The TP insurer is only going to be interested in their total liability, it is of no interest to them how the payout is theoretically divided.
As already mentioned, I’ve seen no evidence that innocent parties in road accidents regularly end up out of pocket by the amount of their excess, so the initial statement must generally be correct and the ‘answer’ is poor at best.
The only slight amendment I would make to the statement is that they say "If you make a claim under the insurance policy". It should say "if you make a claim under YOUR insurance policy".
If you claim under your policy, you are responsible for the excess, regardless of fault. Unless, as they say, your policy has a special benefit, like no excess if hit by an uninsured driver.
You insurer may choose not to charge you the excess if it's non fault and you have the tp details, but that's entirely discretional.
Of course, most of the time the innocent party will get their excess back eventually, either because your insurer recovered it for you from the tp insurer, or you recovered it yourself by asking tp insurers to reimburse you.
But many people believe the excess is only payable on a fault claim. And that's a myth.
If you claim under your policy, you are responsible for the excess, regardless of fault. Unless, as they say, your policy has a special benefit, like no excess if hit by an uninsured driver.
You insurer may choose not to charge you the excess if it's non fault and you have the tp details, but that's entirely discretional.
Of course, most of the time the innocent party will get their excess back eventually, either because your insurer recovered it for you from the tp insurer, or you recovered it yourself by asking tp insurers to reimburse you.
But many people believe the excess is only payable on a fault claim. And that's a myth.
TwigtheWonderkid said:
The only slight amendment I would make to the statement is that they say "If you make a claim under the insurance policy". It should say "if you make a claim under YOUR insurance policy".
If you claim under your policy, you are responsible for the excess, regardless of fault. Unless, as they say, your policy has a special benefit, like no excess if hit by an uninsured driver.
You insurer may choose not to charge you the excess if it's non fault and you have the tp details, but that's entirely discretional.
Of course, most of the time the innocent party will get their excess back eventually, either because your insurer recovered it for you from the tp insurer, or you recovered it yourself by asking tp insurers to reimburse you.
But many people believe the excess is only payable on a fault claim. And that's a myth.
It would certainly be a valid reason to go direct to the third party - one I’d never considered before.If you claim under your policy, you are responsible for the excess, regardless of fault. Unless, as they say, your policy has a special benefit, like no excess if hit by an uninsured driver.
You insurer may choose not to charge you the excess if it's non fault and you have the tp details, but that's entirely discretional.
Of course, most of the time the innocent party will get their excess back eventually, either because your insurer recovered it for you from the tp insurer, or you recovered it yourself by asking tp insurers to reimburse you.
But many people believe the excess is only payable on a fault claim. And that's a myth.
Except - as you point out - it would be very unusual to end up losing out in the end, and as I always tick the legal protection box anyway, it would be highly unlikely that my insurer would decide to fight a separate case with the TP for the excess…
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