Pursued by insurance company for uninisured losses

[Glitch]

My son had a minor RTA whilst over the drink/drive limit. He has quite rightly been convicted of the DD offence and the stigma and impact of his actions will have repercussions for many years.

 

The insurance company have paid the third party costs and they are now going to pursue my son for the costs. He was a named driver on my policy.

 

The car was 10 years old and valued at £1800. It had rear bumper damage and was written off as uneconomical to repair. It was being used as a minicab and carrying passengers. I did a vehicle check and this is the 3rd time it has been written off.

 

The insurance company want £25,000. £5k for the car and associated losses and £20k for personal injury and solicitors costs.

 

It is reasonable to pay for the damage to the car and reasonable associated costs but the personal injury claims are just a money making [problem] which IMO the insurance companies collude on.

 

My son has no assets and a low paid job so his ability to pay off £25k is somewhat limited. No matter what you might think about drink drivers he has already been sentenced once through the courts. I will help my son reduce the liability to a minimum and hopefully agree a fair settlement. The alternative is personal bankruptcy.

 

I wondered if anyone has been in this position and want the outcome was.

[raydetinu]

If he was on your policy and had a full driving licence on what grounds are they seeking to be reimbursed?

the fact that he has commited a motoring offence should not make any difference! that happens all the time.

[Glitch]

If he was on your policy and had a full driving licence on what grounds are they seeking to be reimbursed?

the fact that he has commited a motoring offence should not make any difference! that happens all the time.

 

He was a named driver with full licence, fully entitled to drive my car.

 

However an accident whilst under the influence of drink or drugs invalidates the policy for that driver.

The insurance company are obliged to pay the third party costs (damage to my car therefore not covered) and they pursue the driver (not me the policyholder) to repay the whole lot.

[BazzaS]

I am sympathetic to the fact that the 25k is outside of his ability to pay.

However, I'm not sympathetic to the idea that because he has been dealt with by a criminal court for his offence, that somehow that should absolve him of any civil liability.

 

What if your family had suffered at the hands of a different drink driver?. Would you not want fair compensation from them, and if the insurers you claimed from were able to go after the drink driver, as the policy doesn't cover drink driving, why would you want your and/or their other policy-holders premiums to go up because they wen't able to recover their losses?.

 

However, bearing that in mind, the civil liability should be reasonable. Ask for a breakdown of the costs, so that you can challenge any artificially inflated costs. My view? He should be liable for those costs / damages which are reasonable, but not for any unreasonable nor inflated costs.

Edited August 14, 2011 by BazzaS

[raydetinu]

admit that does sound reasonable. make sure they substantiate all their costs.

does it actually say that in your policy? not seen that before.

[raydetinu]

well I have checked my policy docs and read all 30 odd pages, with about 3 pages of when they wont pay or it is void and nowhere does it mention anything about not paying out if you are drunk or are on drugs; or in fact in guilty of any traffic offence.

when you think about it if you are tired and have an accident or take a corner too fast, go through a red light knowlingly, you are guilty of something, but you would be covered wouldnt you.

have you actually checked your policy! or ask them to confirm what clause applies.

Now I was informed that unless a clause is expressly in the policy, the only conditions it would not be valid, save for riots, nuclear war etc., is if the driver does not hold a UK licience or told porky pies in obtaining such.

[Conniff]

Don't let your son pay a single penny until he has all the paperwork in his hand that shows:

 

All the medical records and doctors reports for that 'personal injury'.

 

Who decided on the amount for that injury and how they came to that decision.

 

A true valuation for the car.

 

A breakdown of their costs.

 

There is stupidity like driving under the influence and there is crass stupidity mixed with greed like solicitors and insurance companies trying to make a fast buck. Well don't give them anything until they have proved the sums.

[Glitch]

Thanks all.

 

Just to be clear. I absolutely agree that my son has some liability. Principally for damage to the other car, plus reasonable other losses by the driver. The car was worth £1800.

 

I am convinced that someone is maximising the opportunity to make a few quid.

 

Whiplash is usually impossible to prove as it is a soft tissue injury so with a bit of encouragement from personal injury solicitor - no win no fee, no fees up front, etc.

 

The solicitors fees are £10k. Personal injury payout is £7k. We have not been consulted at any point of the process. My car has not been looked at to understand what type of impact there was. I have replaced a headlight, very small dent on bonnet and the front grill is cracked.

 

The insurance company do not carry out their own medicals and typically make a pre-medical offer. This apparently "saves cost".

 

Admiral are pretty clear about Drink and Drugs in their policy. I don't know if this has been tested in law.

 

I have asked them for a breakdown of the costs.

[eeyorebob]

Hi,

As an ex insurance company worker, I can state that reasonable expenses should be requested and as you say you have no issue with that. £25k seems a bit odd, i'm going to stick my head out here and say that its PROBABLY the FULL amount that the other parties insurance cover for legal expenses on the policy. Do you have legal expenses on your policy? as this will apply to ALL named drivers or should. Have you checked your policy that it actually STATES they will NOT cover you or named drivers if you are under the influence? It sounds very much to me that your insurance company have used the Drink driving as their "get out" and it will probably fall under the "we reserve the right to refuse cover blah blah" - breakdown of costs is a must in this case, and if you DO have legal expenses on your policy, call on it! as it can be used to "fight" actions such as these

[raydetinu]

you can string this out for quite a long time, just keep asking questions, invoices, details of loss, medical records, etc.

Your insurers may just accept what the TP say but you dont have to.

If they take you to court they would have to substantiate everything with back up docs.

Also if it did go to court and your son is on a low income a inventory would have to be done and a low repayment set anyway.

Take them all the way.

[sailor sam]

Hang on a minute! Isn't the damage done to the car an INSURED loss? So, the OPs insurers should sort that out. Un-insured losses would be the TP's insurance excess, car hire costs and any other 'subsiquential losses'.

 

Please Note

 

The advice I offer will be based on the information given by the person needing it. All my advice is based on my experiences and knowledge gained in working in the motor and passenger transport industries in various capacities. Although my advice will always be sincere, it should be used as guidence only.

 

I would always urge to seek face to face professional advice for clarification prior to taking any action.

 

Please click my reputation 'star' button at the bottom of my profile window on the left if you found my advice useful.

 

[Glitch]

Many thanks again for your support and advice.

 

@eyorebob - yes the policy does have legal expenses covered but I suspect because my son invalidated the policy it may be impossible to claim. I will look into it. A bit ironic if I use my policy to fight my own insurers? He may qualify for legal aid as I believe he needs some form of legal defence other than me! I will also check my household policy to see if there is any cover.

 

@raydetinu - absolutely this is my initial reaction. I have a load of questions about how my insurers could have reached agreement for such high figures. I hope I can expose that fact that insurers act almost as a cartel and go have a reciprocal arrangement to pay up pretty easily. I am sure it is a basic admin process and not one that required special skills and training. My boy has no assets and a low wage so £25k is impossible for him to pay back.

 

@Sailor Sam - I will look into this. Under the Road Traffic Act I was led to believe the insurer is obliged to pay TP costs.

 

The risk is surely factored already factored into the premiums and this is a way to improve profits.

 

Admir@1 sent me letter months ago stating that my son was no longer covered following the incident. Funnily enough they didn't refund any premium which was only 2 or 3 months into the policy. At least a grand donated toward the debt.

 

11 Drink and drugs clause (from Policy document)

If an accident happens whilst you or any person entitled to drive under Section 5 of your current Certificate of Motor Insurance is convicted of an offence involving drink or drugs, or was driving under the influence of drink or drugs, no cover under the policy will be provided and instead, our liability will be restricted to meeting our obligations as required by the Road Traffic Act. In those circumstances, we reserve the right to recover from you or the driver, all sums paid (including all legal costs), whether in settlement or under a Judgment, of any claim arising from the accident

Edited August 15, 2011 by Glitch

[Mossycat]

Hate to say this but it looks bad for the OP's son.Driving a vehicle whilst under the influence of drugs or alcohol is something that most (if not all insurers) have a condition in the policy that allows them to recover any and all costs that they have to pay out.Personal Injury is sadly one area that gets abused, both by the 'injured' party and those involved in the process of getting compensation. The figure of £25,000 isn't actually that high in terms of a 'typical' claim, and as has been said £10,000 of that is the costs of the TP solicitors.Basically, the OP's son is liable for ALL costs that the insurer has had to pay out, and that includes the damage to the TP car, or it's write off value. Even if the TP has comprehensive cover, the TP's insurers will have paid out for that directly to the TP, then the TP's insurers will have requested reimbursement from the OP's insurers, so it's correct that that item is included. It's not just uninsured losses that are recoverable, it's ANY and ALL losses, whether paid for by the TP directly or by someone on their behalf.Mossycat

[Glitch]

As far as I can make out most insurers pay the TP costs and leave it at that without pursuing the debt, although they may reserve the right. My insurer seems to have a more aggressive approach.

 

It is acceptable that they don't pay up for damage to my car however it is somewhat perverse that because he was over the limit he has saved the insurer the cost of replacing my headlamp and grill.

 

I will help him play this out and wait and see how far they take it. They have to get a court judgment in their favour before they harass him for payment. My son has no assets and a low wage so they have zero chance of getting all the money. He won't be driving again for years and he will have to live with the consequences.

 

Make sure you read the small print in your policies. Never, ever drink and drive and if shunted from the rear (so matter how slight) make sure you get your PI claim in. They will always payout.

[raydetinu]

I think they will just lose interest if you keep on to justify the costs etc.

just have to wait and see, keep us informed and we will help if we can.

[Glitch]

Update.

Asked the FSA to look at the term which I consider to be unfair. It disadvantages the consumer in what is a non-negotiated contract, exposing them to unlimited liability. Highest motor insurance claim i have found is £20m.

Compliant progressing with the FOS. It is now going to the Ombudsman.

 

I now understand why the insurer thinks they can get away with this term. Under UK law is it not possible to include in the contract for compulsory TP insurance any avoidance of the policy due to (amongst other things) physical and mental state of the driver. Section 148 of the RTA covers this.

 

It is written in Spanish law that the the insurer does not have to pay TP costs if the driver is intoxicated. This led to the Ruiz Bernaldez test case in the Spanish Courts http://www.mibclaim.co.uk/resources/library/cases/criminal-proceedings-ruiz-bernldez-case-c12994-1996/

 

EU courts said that insurer should pay TP but is entitled to recover costs from the driver.

 

The Bernaldez case was referred to in a UK case where a driver deliberately drove his car into a building. The building insurer took the driver to court to reclaim costs. His motor insurer asked to be co-defendant as they wanted to avoid paying. Although it backfired on the motor insurer (they had to pay even though it was a deliberate act) the reference to the Bernaldez case highlighted that under EU law the insurer could have recovered costs if the driver had been intoxicated. http://www.bailii.org/ew/cases/EWHC/QB/2011/1657.html

 

It is still not clear if the Bernaldez case and the EU Motor insurance directives will overrule the RTA in a UK court.

 

None of the other major insurers use this term in their policies which make me think they don't believe they can enforce it.

 

I have found someone in a similar position and the insurer has started court proceedings. This may be brinkmanship.

 

I still think it stinks but I appreciate some people will say a drunk driver deserves everything they get. However under our National laws the insurer should pay. People using phones whilst driving probably cause more accidents than drunks but they get away with their negligence.

 

Anyone got any views on how a UK court would deal with this?

Anyone got any access to records that show an insurer has won a similar case in court?

My son is likely to need professional legal help but cannot afford to pay - what options are there to get advice from specialists in this area?

 

Thanks in advance for any help. As you may appreciate this is rather stressful and dragging on.

[Ganymede]

Hi,

 

I missed this thread first time round. What exactly has the FSA said about the clause?

 

To be honest it doesn't look good for your son at this stage, his insurer has a right to recover their outlay from him including vehicle damage, injury and costs etc.

 

The case you quote will not override the RTA Act nor will it have any particular sway in the English County Court IMO as the EU Directive is clear.

 

Hiring a solicitor to defend your son will be very expensive as it is highly unlikely that he will be entitled to legal aid.

 

As for the costs and PI etc. How many people were in the other car and are claiming? £10k seems a lot for just one Claimant considering the award was only £7k, hence I suspect that there was more than one injured person. You really need a more detailed breakdown.

 

As for the injuries themselves, if the Claimant(s) have been medically examined by an independant medico-legal expert then his/her medical opinion will be gospel as far as the Courts are concerned and it will be very hard for you to disagree with it.

 

Thanks

[Glitch]

Thanks for the reply. Still waiting on the FSA re Unfair Term. I lodged my complaint in January! The way they operate it could take many more months. They don't look at this as an individual complaint (specific to my circumstances) but "on behalf of all consumers".

 

Are you saying that the EU preliminary judgment and EU Directive applies or, will the court only look at UK law? If only UK Law then it surely helps as Section 148 stops insurers avoiding their liability.

I am not a legal expert or used to reading these complex wordings so perhaps I have read the RTA wrongly, particularly section 148 http://www.legislation.gov.uk/ukpga/1988/52/section/148

[Bang!]

My first instinct upon reading this was that there had been a change in legislation to permit its happening.

 

If not then I would tell the insurers and their agents to F...O..

 

Here are my reasons.

 

UNDENIABLE FACTS

 

RTA 88 ?s143? states there is a legal requirement for insurance, which covers all valid claims by third parties.

 

Father has complying contract with insurers.

 

Son is named driver.

 

Son has no contractual agreement with the insurers but drives under his father's contract.

 

There was full consensus between parties in the agreement, and there were no misrepresentation/uberamae fidae issues.

 

REASONS

 

As the contract is between the insurers and the father, then there has been no agreement with the son, and the insurance company cannot rely upon a term in the father's contract to chase money from the son.

 

They paid out as the insurers, and as the law requires. They could not decline to pay out as the son was drinking as he was entirely legally covered.

 

Had the father been drinking and had the accident, as the contracting party then potentially he could be chased under the dubious term. However, the son does not have a contract with insurers at all. Had the term stated the father could be chased for the actions of those he extended the insurance to, then the insurers could also chase the father. Although this would reek of being an unfair term.

 

If the insurers claim that they are entitled damages as a tort/delict - then that is a claim against the son entirely outwith their contract.

 

This would mean an insurance company could claim damages from people they were insuring any time they had to pay out - as the claim would be independent of the contract terms. So effectively it would mean there was no longer TP cover in their policies as they sought to recover from those they insured.

Edited July 15, 2012 by Bang!

[Glitch]

Thanks Bang! you have certainly put a spin on it that I hadn't considered. I assumed the contract applied equally to the named drivers. The RTA focusses on those named in the Certificate when it comes to the insurers liability. The policy term does say the insurer may seek to recover costs from the Policyholder or the driver which is somewhat scary.

 

I am sure the insurer is just trying it on and as far as I can see it would have to be tested by the Court of Appeal and European Court. I can find no record of a successful court case but I suspect many victims agree a repayment schedule before it gets that far.

 

@Ganymede. It was a 10 year old mincab (written off twice before) with a driver and 4 passengers. All but one made PI claims, supported by medical report (no doubt a friendly Dr used by the Claims Co. Driver went straight to a Claims Management Co and had a nice new(ish) vehicle for 17 weeks. Car hire cost several times more than the £1400 value of the vehicle.

[raydetinu]

The terms of the policy DO apply to named drivers!

However as explained before, do not expect them to persue claim. As they wont have all the details to persue the claim fairly.

Watch your renewal though, they will try and get some of it back!

[Glitch]

The terms of the policy DO apply to named drivers!

However as explained before, do not expect them to persue claim. As they wont have all the details to persue the claim fairly.

Watch your renewal though, they will try and get some of it back!

 

Thanks ray. Can you explain your point "As they wont have all the details to persue the claim fairly"

[raydetinu]

Every document to cover their payout including the reports for the repairs to the car, hire, injuries etc. Which all have to be examined and checked to be fair and reasonable if it goes to court.

A lot of time for somebody to go through, and then you can challenge it all.

[Glitch]

Thanks ray. I had asked them for a full breakdown myself but they have been very evasive so if they have to provide it as legal evidence they are going to struggle. They won't share medical reports because of Data protection, although the muppets did manage to send me the claimants name and address by mistake!. They can't even supply me with a proper photograph of the damage to the other car after I received a really poor, illegible B&W photocopy. They also didn't know the car had been written off twice before, I found that out myself.

 

It just drags the whole process out. Already 18 months has gone by.

[Ganymede]

Thanks for the reply. Still waiting on the FSA re Unfair Term. I lodged my complaint in January! The way they operate it could take many more months. They don't look at this as an individual complaint (specific to my circumstances) but "on behalf of all consumers".

 

Are you saying that the EU preliminary judgment and EU Directive applies or, will the court only look at UK law? If only UK Law then it surely helps as Section 148 stops insurers avoiding their liability.

I am not a legal expert or used to reading these complex wordings so perhaps I have read the RTA wrongly, particularly section 148 http://www.legislation.gov.uk/ukpga/1988/52/section/148

 

 

 

Not sure I follow you. The insurer is not trying to avoid paying out, they have already paid out to the Claimant(s) etc haven't they?