Advice on a Collision Damage Waiver

Mossycat · 4th March 2008, 00:31

I am looking for any advice on the following

A 2 vehicle accident, car A was stationary, car B runs into car A. Driver of Car B is Mr Honest and confirms to his insurers that he hit a stationary car so liability is not in dispute.

Whilst Car A is in for repairs owner of Car A hires a car. Hire car has a huge excess so owner of Car A opts for the Collision Damage Waiver.

When it comes to claiming back unisured losses the insurers of Car B refute the CDW and claim that owner of Car A had a duty to mitigate their losses and the CDW was not an essential item.

Owner of Car A was well aware of the duty to mitigate losses but they are a risk averter, their own policy does NOT have any excess, let alone an excess as large as that on the hire car. The owner of Car A would not consider driving a car that has an excess and therefore had two choices,-

1) Hire a car

2) Use public transport and taxis to carry on with running their own business whilst the car was in for repairs

The cheaper of the two options was to hire a car, but it is impossible to hire a car without a CDW.

I can understand that an insurer might refute the CDW if the driver of the car had an excess on their own policy (ie the car that was in for repairs), but surely given that owner of Car A only wanted to continue driving in the same manner that they did before the accident (ie NO Excess) I cannot see how they can refute this item.

At the time of hiring the car it was not known how long repairs would take, it was considered to do a temporary change of vehicle to cover the hire car on the policy of Car A but the admin charges would have ruled this out.

Anyone offer any advice

Mossycat

ab123uk · 4th March 2008, 01:13

Hi Mossycat,

Your insurer's are correct, as CDW is not an essential cost, they don't have to, and therefore won't, reimburse that cost.

CDW is optional- usually there's an excess of approx £250/£300, OR CDW @ £2 per day (or there abouts).

Insurer's save money wherever possible, and had you been the owner of Car A, and paid CDW, Car B's insurer's would not reimburse you.

Mossycat · 4th March 2008, 11:05

Hi

Thanks for your reply.

In this intance though surely the CDW was a necessity, the innocent party will not drive a vehicle that has an excess and by actions of another (ie the responsible party) they had to hire a car.

The innocent party has demonstrated by having a zero excess policy that they seek to avoid risk, whilst hiring a car they enjoyed no greater or better benefit than they would have done had the accident not occured.

Mossycat

gyzmo · 4th March 2008, 19:47

One can buy many things to avoid risk - it does not make it necessary or reasonable. The cost of the CDW is not as a natural result of hiring the car, or indeed, of the accident. As such, it will not be covered.

Even going on the basis that CDW is mitigating - it is only potentially reducing the cost of something that may or may not happen in the future - it has not been purchased to reduce a known cost.

Mossycat · 4th March 2008, 20:45

Thanks ab123uk and gyzmo, not what I wanted to hear but your replies were appreciated.

Mossycat

revolting peasant · 4th March 2008, 21:50

I'm going back a long way with my insurance experience here and I am prepared to be corrected if things have moved on in the 20 years I have not practiced but there used to be case law relating to CDW claims. It may well have been superceeded by now and I'm sure somebody will tell me if it has.

The case of Coughlan v Firmin Coates (? spelling) used to be quoted as the Judge in that case ruled that it was reasonable for the Claimant to protect himself from the excess on his hire car as it was significantly higher than his own policy excess. This ruling was upheld in the Court of Appeal (Marczyk v Davies - again ? spelling). CDW is therefore a legitimate expense that can be claimed from the TP insurer.

Like I said, I haven't practised in the business for a long time but when I was doing ULRs it was a well tested case.

Mossycat · 4th March 2008, 22:45

Quote:

Originally Posted by revolting peasant

I'm going back a long way with my insurance experience here and I am prepared to be corrected if things have moved on in the 20 years I have not practiced but there used to be case law relating to CDW claims. It may well have been superceeded by now and I'm sure somebody will tell me if it has.

The case of Coughlan v Firmin Coates (? spelling) used to be quoted as the Judge in that case ruled that it was reasonable for the Claimant to protect himself from the excess on his hire car as it was significantly higher than his own policy excess. This ruling was upheld in the Court of Appeal (Marczyk v Davies - again ? spelling). CDW is therefore a legitimate expense that can be claimed from the TP insurer.

Like I said, I haven't practised in the business for a long time but when I was doing ULRs it was a well tested case.

That is worth checking out

Many thanks for taking the time to respond

Mossycat

gyzmo · 5th March 2008, 11:40

Good point. I couldn't find those cases so couldn't comment, but it certainly is worth bearing in mind. I personally cannot reconcile such a decision though. Maybe we're moving more towards the American system which has taken some decisions that wold be laughed out of court over here.

Mossycat · 5th March 2008, 12:23

I'm having a bit of difficulty tracking them down, if anyone could point me in the right direction I would very much appreciate it

Mossycat

gyzmo · 5th March 2008, 13:34

The cases? Can't find them either. will have a dig and see what comes up....

Mossycat · 5th March 2008, 14:16

Quote:

Originally Posted by gyzmo

The cases? Can't find them either. will have a dig and see what comes up....

Much appreciated

revolting peasant · 5th March 2008, 17:50

I think it's a problem with my ageing memory and the spelling. Why can't these people have simple names?

I couldn't find them last night but I know they exist as CDW was a very live issue in the late 80's and I used them many a time to great effect. I'll keep looking and I'll dig out my CII folders later and see if there is any mention in there.

Hopefully we'll come up with a solution.

Mossycat · 5th March 2008, 19:50

Quote:

Originally Posted by revolting peasant

I think it's a problem with my ageing memory and the spelling. Why can't these people have simple names?

I couldn't find them last night but I know they exist as CDW was a very live issue in the late 80's and I used them many a time to great effect. I'll keep looking and I'll dig out my CII folders later and see if there is any mention in there.

Hopefully we'll come up with a solution.

OMG the phrase CII takes me back, bet you remember Donoghue V Stephenson or The Granary Wharf case then.

I remember dealing with CDW's as well, we used to pay them if the third party didn't have an excess on their own policy but that was back in the early 80's and I left the Insurance Industry mid 80's.

Maybe things have changed since our day but if you do find the cases I would really appreciate it.

Mossycat

revolting peasant · 5th March 2008, 20:32

My CII folders are well out of date, in fact I don't even know why I've still got them - I got my ACII in 1987:o I've been married twice and moved house 7 times since then but they always seem to come with me.

I do remember that the presiding judge in the appeal court case was Justice Llewellyn and I think it was 1984.

I can recall the details but I can't find the cases. I hope I'm not just having a really wierd dream!

revolting peasant · 5th March 2008, 21:57

Gone all spozzy eyed now and still can't find them. There must be someone out there who can tell me I'm right but until then, it's time for Torchwood!

gyzmo · 6th March 2008, 18:52

Gone through my CII files (circa early 2000's) and haven't found anything on the matter. Have done searches on the legal databases I have access to (6 of them) and still cant see anything.

Methinks revolting peasant had a bad dream!

Mossycat · 6th March 2008, 19:50

Quote:

Originally Posted by gyzmo

Gone through my CII files (circa early 2000's) and haven't found anything on the matter. Have done searches on the legal databases I have access to (6 of them) and still cant see anything.

Methinks revolting peasant had a bad dream!

Gyzmo I really appreciate you looking. When I was a claims handler (1980's) we would pay out for CDW's provided the claimant didn't have an excess on their own policy or if it was significantly lower than that which the CDW was averting.

To my mind it is a reasonable item of claim because the risk averter doesn't want to be responsible for a big excess on a vehicle that is temporarily in their charge.

Seems I may have to issue proceedings to recover it and argue my case in court.

Thanks again

Mossycat

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