MOTOR INSURANCE CLAIMS

The law concerning compulsory third party motor insurance may be summarized as follows:

All motor owners must insure or provide security against their legal liability for death or bodily injury caused to third parties, cover must be for unlimited amount

AIM

The purpose of the law is to secure, so far as that may be possible, that those killed or injured or who sustain damage to their property as a result of road accidents have an effective right of redress against those responsible. To that, it ensures that the victims are not dependent for compensation on the personal wealth of persons responsible. They are obliged to make adequate provision by insurance deposit or security

Broadly speaking, there are 4 levels of covers for motor insurance:

• Road Traffic Act only- minimum required to comply with road traffic Acts and tend to be offered to those whose accident or conviction records is very poor.

• Third Party only – RTA cover plus off the road plus property damages with monetary limit

• Third Party Fire and Theft-Third party plus indemnity for loss of or damage to the vehicle caused by fire or theft - actual or attempted.

• Comprehensive- In addition cover under third party fire and theft cover is generally granted for damage to insured’s vehicle plus additional benefits

HANDLING CLAIM

An Accident Report Form completed by the insured as insured’s are required to report all accidents.

PURPOSE OF ACCIDENT REPORT FORMS

• To establish whether the policyholder is entitled to indemnity under his policy.

• To provide sufficient information to permit the insurer to begin processing any claim immediately, if that is appropriate.

• To enable the insurer to take a preliminary view on whether there is likely to be a claim from a third party.

• To enable the insurer take a view as to the severity in terms of potential cost of the claim

• To obtain all the relevant facts whilst they are still fresh in the insurer’s

• It may throw up information which is missing from the proposal form

• It seeks details of any injury or damage resulting from the accident

• Post- accident location of the vehicle so that it might be inspected.

• It seeks details of any witnesses and police officers who attended the scene of the accident.

• It will require policyholder’s or insurer’s description of the circumstances and a sketch of the cause and position of vehicles involved.

• Details of other vehicles, their drivers and insurances

• It seeks details of any witnesses and police officers who attended the scene of the accident.

• It will require policyholder’s or insurer’s description of the circumstances and a sketch of the cus and position of vehicles involved.

• Details of other vehicles, their drivers and insurances

• Location of the accident

• Time and date

• Weather conditions as well as road conditions

• The insured’s opinion as to fault

The Accident Report Form will enable the insurer satisfy himself;

• Of the driver, his age, his license, his accident conviction history

• That the vehicle is the one covered under the policy

• Of the use at the time of the loss and whether it is at variance with the Limitation of Use Clause.

The comprehensive policy allows the insurer to authorize repairs.

Motor engineers may be engaged to do this work.

• They will check If the damage has in fact occurred and is all the result of the accident.

• They will check the accuracy of relevant information on the motor accident form.

• Agree with the repairer or the insured the extent of damage and the estimated cost of repair.

• To agree with the repairer whether the damaged parts should be repaired or replaced.

• To establish whether the vehicle can be economically repaired or should be regarded as a total loss.

• To oversee the disposal of the vehicle.

• To recommend valuation for the total loss vehicles and where so instructed to negotiate settlement.

CHOICE OF REPAIRS

• Insured own repairer

• Approved repairers

• Repairs by makers.

• Specialist repairers e.g. repair and replacement of chassis, frames, engine blocks etc

COST OF REPAIRS

• Labour cost

• Damaged Parts

The idea is to replace which more economical, rather than repair. Since the sheer cost of time in repair is not justified.

DELAYS IN REPAIRS

• Difficulty in obtaining parts.

• Older models no longer being manufactured and repaired

• May depend on salvage dumps or being specially made which would mean higher cost.

SATISFACTION NOTES

A note confirming that the insured is satisfied with the repairs before insurers commit themselves to pay or reimburse workshop.

Legislation ensures that vehicle owners have the right to redress against the repairers in the event that the repair work has not been carried out properly even though a satisfaction note has been signed.

TOTAL LOSS

• When damage is beyond economical repair, that is when the total cost of repairing the damaged is equivalent to or more than the market value of the vehicle (Agreed Value ….).

• A total loss also occurs when a vehicle is stolen and not recovered.

• When considerable sums have been spent on additional maintenance, accessories and refinements especially special type vehicles , repairs may be effected but insurers may ask for contribution.

•

When insurers agree to a total loss they will take over the wreckage and sell it to reduce the claim outlay

• Once the total loss settlement is effected the subject matter is no more and if it is a singular vehicle the policy lapses unless another vehicle is purchased to replace it. If more than one vehicle is insured under the policy then the particular vehicle which is the subject matter of the total loss claim is expunged from the schedule.(subject matter has disappeared and this driving other vehicle benefit ceases to exist.

• Total loss may be settled by paying cash on the basis of the MARKET VALUE of the vehicle.

• Insurers may replace with a new car if the insured vehicle is less than one year old form date of registration.

• Betterment – always ask for contribution in order to uphold the principle of indemnity.

Windscreen and Glass

Broken windows are rife because of theft of car radios, stereos or CDs or gain access to other contents.

Because of the ever rising cost of windscreen claims an excess has been imposed.

Insurers have arranged with specialist contractors for the replacement of vehicle glass “while you wait”.

FIRE AND THEFT CLAIMS

Theft will normally be for in-car entertainment systems or for personal effects which are paid for. Such thefts should be reported to insurers immediately so that the vehicle registration authorities may be notified. Makers of vehicle may be notified as an order for spares would require quoting engine or chassis number.

Theft involves taking away a vehicle without the insured’s consent. Vehicles may be broken up and sold as spares and may be hidden or sold later by altering appearance.

Loss of accessories such as car radio are covered as well as spare parts kept in the insured’s garage.

WAITING PERIOD

It is customary to allow a waiting period after the disappearance of the insured vehicle since quite a number of stolen cars may be recovered.

If the claim is settled, a discharge form will be signed by the insured and this will provide that in the event that the vehicle is recovered it will either be treated as salvage belonging to the insurers or the amount of claim money paid to the insured must be returned to the insurers in exchange for the vehicle. The discharge form, in effect transfers the ownership of the vehicle and any rights therein to the insurers.

• Fire and self -ignition must be investigated by an expert to establish how it occurred. It may be traced to a short circuit in the electrical system or general wear of valves, petrol connections or exhaust system.

• Note: Since the policy excludes mechanical and electrical breakdown, insurers will be liable only for the cost of the resultant fire damage and not the cost of replacing the defective part.

THIRD PARTY CLAIMS

Liability in respect of the use of the motor vehicle arises because those who use the highway whether they be pedestrians, cyclists or motorists owe a duty of care to all other highway users.

The motor vehicle was considered a dangerous nuisance and it use given statutory regulations and control by legislation.

The motor vehicle can do more damage to pedestrians than vice versa in general terms but a jay- walking pedestrian may cause an accident resulting in action by a motorist.

Eames V Capps 1948 states that the use of a motor vehicle is governed by the ordinary rules of negligence. The standard of care is that of a proper care and skill in the motorist’s control of the machine.

The driver approaching a minor road whilst on a major road cannot assume that a vehicle on the minor road will remain stationary and to some limited extent may be liable for any collision. Long V LTE (1959).

A driver who parks so that he obscures the vision of oncoming traffic causing a collision between two other vehicles is liable for his negligence

Vehicles used on the highway must be properly maintained within the terms of the motor vehicles (construction and use) regulations. Where the defect results in accident criminal penalty as well as civil liability will be incurred.

Where a motor vehicle is driven by a person other than the owner there is a presumption of agency and to overcome that the owner must show that he has abandoned completely his right of control. Sampson V Aitchison (1912).

In Barnard V Sully (1934) it was stated that where ownership of a vehicle is proven then prima facie either the owner, his servant or agent were driving or controlling the vehicle at the time.

In Monk V Warbey (1934) the owner of a vehicle who allowed it knowingly to be driven by another person when the insurance cover was inoperative was held liable for breach of his statutory duty in failing to insure .

Evidence of skid is not enough to avoid liability unless the driver can show the skid was not brought about by bad driving Browne V De Luxe car services 1941.

THIRD PARTY PROPERTY DAMAGE CLAIMS

Damage to other property such as fence walls and street furniture and damage involving two or more vehicles.

In handling claims involving two or more vehicles, it is necessary to investigate the circumstances surrounding the accident.

Most accidents happen quickly and unexpectedly and there can be genuine differences in recollecting facts.

Statement from independent witnesses (persons other than drivers involved or their passengers) may help clarify any conflict of evidence that might exist.

It is very important to visit the scene of the accident.

A police report in order to compare statements given to the police and those given to the insurers.

Accidents Polarize into

• Those where one driver is clearly wholly responsible – rear end shunt accident

• Those where negligence was contributed to by the 2 drivers – roundabout accidents.

Usually characterized by conflict of evidence with no independent witnesses.

Where cover is comprehensive, insureds are encouraged to claim from their respective insurers.

Issues to consider

Not to prejudice any action their own policyholder must be taking in respect of his own uninsured losses,e.g policy excess, the cost of hiring alternative transport while his is being repaired

The effect of such decision on his no claim DISCOUNT

Once liability is established the next stage is to translate it into a monetary amount for repairs and for loss of use of vehicle if applicable.

THIRD PARTY PERSONAL INJURY CLAIMS

Complex and expensive to settle and represents a substantial proportion of claims outlay.

Once negligence is established then we have to ascertain

• Extent of injury – minor injuries which may cause no further problems are settled comparatively easily.

• The prognosis and number of dependants

Severe injuries might take a long time to settle. It is desirable to know the full consequences of the injuries and damages may be very high.

PASSENGERS

This may be considered in two ways.

• Liability towards passenger- section 151 of Road Traffic Act 1960 introduced compulsory insurance in respect of liability to passengers.

Note that liability towards passengers carried for hire and reward as well as those carried pursuant of contract of employment is also compulsory

• Liability for acts of passenger

Automatic liability for acts of servants or agents of driver/owner are covered. Employer may be liable vicariously.

No automatic assumption of liability of other passengers. They are liable for their own acts of negligence. Insurers vary in the extent cover they grant.

CONTRIBUTORY NEGLIGENCE

In several accidents liability is usually not clear very often the speed of both vehicles and the state of alertness of the drivers and the manner of driving having regard to road conditions and state of weather will have to be considered.

If there is a collision at a cross road which is uncontrolled, then Prima facie each driver is equally to blame.

• The question of contributory negligence of passengers can be of importance see the under listed case Law.

• In Dann V Hamilton 1934 – the plea of Volenti (no injury is done to a willing person) was raised when a passenger travelled with a driver, who to his knowledge was drunk.

The defense failed and it was said that the drunkenness would have to be very apparent for the case to succeed.

It was suggested that possibly Volenti might be a defense in these days of publicity regarding drink and driving.

• In Pitts V Hunt and Anr (1990): it was established that there cannot be a successful plea for a finding of 100% contributory negligence.

• The contributory negligence of a passenger not wearing a seat belt was first raised in Gaier V Kujawa 1970 where it was held that for a passenger not to wear a seat belt did not constitute contributory negligence.

• However, the case of *Froom Vs Butcher 1975 settled the question holding that even a third party who failed to wear a seat belt was guilty of contributory negligence and his damages were reduced.

• Defendants has to show not only failure to wear seat belts but also that failure to do so contributed towards injury.

• The rule is in line with that imposed towards motor cyclists who fail to wear crash helmets.

THINGS TO REMEMBER IN THE EVENT OF AN ACCIDENT:

Don't panic. You cannot reverse time. Just get out of your car if you are not hurt.

Look out for the extent of damage or any injured persons

Calm people down as onlookers can be agitated if there are injuries involved

Take pictures of the damaged items/ or part of the car. Remember to take a shot of your car from the front to capture your registration number. A mobile phone shot is acceptable

Do not accept liability or make statements that can be interpreted to mean so.

Do not make any payment or offer to make any payment except in the event of an injury and such emergency expenses are necessary. But they must be just emergency expenses and your insurers must be made aware when you report the loss to them

Talk to your insurers so they can note it in their books

Report to the police

If you can move the car to a nearest Garage do so and obtain a repair estimate (Comprehensive cover only)

Go to your insurer, or they may come to you, and complete and Accident Report Form

Add a photocopy of the Driver's License of the driver driving the car at the time of the loss

Add the Photos either in soft copy or print outs

Add the repair estimates

In the Insurer's own estimation, a post loss surveyor might come and assess the loss and have your insurers

authorise repair works.