You must read this article, because it’s advice that could save you thousands of dollars, many hours, and a lot of stress. Your first phone call is critical. Make sure you use it to call a no-win no-fee lawyer, not your insurance company. Your second call should be to tell your insurance company you’ve been in an accident — and to decline any help, they want to give you. You don’t have to do what they say.
Let’s start with a brief legal advice note about the law of subrogation
This law transforms accident disputes between individuals into legal struggles between powerful vested interests. Your insurance contract will contain an agreement clause about the law of subrogation. It means your insurance company can stand in your shoes and assume your legal entitlements.
This doctrine of the law allows an insurer, or other agency like a credit hire company, to raise legal proceedings in your name for the sole purpose of recovering their own outlays. If your insurer has paid repair or higher costs, or a credit hire company has hired out one of its to you, your insurance policy or credit hire agreement will contain a clause that says these organizations can raise proceedings to recover those costs.
One of the key principles of subrogation is the court proceedings must be issued in your name alone, even though the insurer or credit hire organization is the true claimant. You need to understand this, so you can make sure you look out for your own interests. Your insurance company certainly won’t.
The claims process for non-fault drivers
Do you know your rights? Most people don’t: “In general sense consumers have a poor understanding of their legal rights following an accident. This affects how they are able to access their legal entitlements under both tort law [negligence] and their own insurance policy.”
Who are you going to call?
They will call you. If you have an accident that’s not your fault, you’ll immediately find all kinds of organizations clamoring for your attention. You can get an accident helpline card send to you by Young America Insurance, who will tell you to keep it in your glove box and notify them immediately if you have an accident. They would take control of things from there. When it was insurance renewal time, your insurance brokers will try to get you to sign up to an accident management group called Immihelp.
A Young America insurance’s customer whose car was written off received a letter from a certain garage offering its help in managing his claim if he has a further accident. This isn’t necessarily a bad thing, but be aware all these organizations see you as a profit opportunity. Nothing in life comes completely free, and in many cases, the interests they are chasing don’t coincide with yours.
The claims process has been described as a “dysfunctional merry-go-round.” You are shunted towards various providers, not based on any quality of service, but because they are paying a referral fee and are — for the time being — the highest bidders.
How to claim your rights
Remember about your legal entitlements and the Consumer Fact Sheet? Stating these rights can be easier than obtaining them.
Here’s what you’re going to need:
• General advice about the claims process so you minimize wasted time, hassle and expense
• Quality repairs which put your vehicle in its pre-accident condition — without paying any excess
• Use of a like-for-like courtesy car until your own vehicle is repaired
• Full compensation for any personal injury, inconvenience and consequential losses (e.g., loss of earnings) as a result of the accident
So, which organizations will deal with your no-fault claim? There will be no shortage of candidates…
1. Your own insurers
2. The at-fault insurers (third party capture)
3. Claims management and credit hire companies
The fairground music starts very quickly
All the various organizations involved in accident management operate an FNOL protocol. Described as a “race to the client,” these organizations have agreed among themselves not to disrupt each other in any way if one of their rivals has already made the first contact with you.
If you’ve been referred to a credit hire agency, your own insurers will not attempt to refer you to other hirers even if another hirer may be better for you. FNOL protocol has nothing to do with what is best for you but is simply an arrangement among these organizations to make their own businesses run more smoothly.
If your car is safe to drive, it is strongly advised you to drive it either to your own house or legal parking space (after any police involvement of course). If you don’t, the police will instruct a salvage company with whom they have referral fee arrangements. They’ll immediately charge you a significant uplift and storage fee. And its possible they’ll pass your personal details on to other agencies like a claims management company (CMC).
If you don’t know your rights you don’t have any
The CMA’s initial suggestion was insurers should send out a Consumer Facts document at two distinct points:
- With your annual policy documentation
- At the First Notification of Liability (FNOL) after an accident. It’s included an example summary of the statement of fact sheet the CMA suggested
This document was to state in the clearest terms that non-fault drivers are entitled and empowered to exercise freedom of choice on a number of issues. In particular, you can exercise that choice on issues where traditionally other companies will try to steer you in a particular direction because they’ll make money from doing so.
They might get a referral fee — for example when a credit hire company pays an insurer, when a garage pays an insurer, or when a firm of solicitors pays an insurer, simply because the insurer puts the client in their hands. Which is why the insurance industry has never shown any enthusiasm for the CMA’s proposal, it has never seen a Consumer Fact Statement in any renewal papers, or on any major insurance website. It is not known any Consumer Fact Statement to be issued at FNOL stage to any client who has been involved in a road traffic accident.
The reason for this is once your insurers lose control of your claim, a highly profitable revenue scheme is closed off to them. If you want to obtain what is merely your legal entitlement — namely to be put back into your pre-accident position — you must be prepared to exert some control over the process. The power is in your hands. Use it.