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UK Home Insurance – Policy Types

Buildings Insurance – Definitions

We are using a particular policy from one insurer and you will probably find that the wording and order that your house insurance policy comes in will be a little different. But you should be able to translate this information across to your cover.

These are usually explained quite well although I will comment on who ‘you’ are. That is, who is covered and who is not. This means any member of your family who lives at the address shown in your policy. It includes unmarried partners provided there is clear evidence of a permanent relationship.

There will be a definition about what your building is made of. If yours does not match this, tell your insurer immediately. An example would be if you live in a little country cottage with a thatched roof. Failure to tell your insurers constitutes a ‘non disclosure of material fact’ and could mean that they would refuse to pay a claim.

Your buildings definition also includes all the outside bits and pieces within your property, such as garages walls, footpaths and so on.(How many of us enjoy swimming pools and tennis courts!!) Don’t get this definition confused with the perils you are covered for. That is a common mistake. A definition does not say what you are covered for. It is just a description of your home. The definition also includes any garages on a different site.

Buildings Insurance – Standard Cover

This is where we split up into standard cover and accidental damage (or all risks). If you have standard cover, you need to compare any loss you have with the list of ‘peril’s that you are insured for. If you can’t match the cause of the loss to one of the perils on the list, you are not covered. The ‘onus of proof’ is with you. That means it is you that has to prove the cause of loss is covered.

If you have accidental damage, you then have an ‘all risks’ type of cover. Here you are covered for any and every possible type of loss, except those listed in the exclusions (small print). The ‘onus of proof’ rests with your insurer. That means, they have to prove you are not covered.

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Standard Cover

You should have a list of perils covered with another list of exclusions that apply only to that peril. It might look something like this:
Fire, Lightning, Explosion, Earthquake, Smoke – excludes damage caused gradually
Aircraft and articles dropped from them
Impact by animals, vehicles or falling trees or branches – excludes damage caused by felling or lopping trees
Theft or attempted theft – excludes losses that happen if left unoccupied for more than 30 days or left unfurnished or caused by a tenant or lodger or paying guest.
Malicious Persons – the same exclusions as for theft
Burst Pipes – some exclude frozen pipes, others include it
Storm or Flood – excludes damage by frost and damage by storm to fences, gates and hedges
Riot, Civil Commotion, Strikes, Political or labour disturbances
Oil leakage
Television Aerials, Satellite or radio-receiving aerials, fittings and mast breakage or collapse
Subsidence – a long list of exclusions, see next section !

FIRE – Damage caused by a fire will usually only be paid for where there has been ignition. Where there was also smoke damage to your property from the fire, that is also covered. You cannot claim for the smoke damage to your decorations caused gradually by smoking cigarettes and so on. That is not a fortuitous event, it is something over which you have control. Hence the exclusion. There are some more exceptions to the rule that there must be ignition. you can find out more from the ‘home insurance – grey areas’ page of this site.

LIGHTNING STRIKES – to your buildings are no problem. If it hits an aerial, sorry but that is a contents claim! Although aerials are listed as an insured peril, they do not appear in the definition of a building. They do appear in contents. So damage to aerials constitutes a contents claim. Similarly with explosion and earthquakes. Fortunately these are few and far between here in the UK.

AIRCRAFT – This will cover anything dropped from anything that flies. Again, fortunately, a rare occurrence.

IMPACT – The intention here is that if your home is hit by a car or a wild animal, you are protected. With trees, if you have arranged to have your tree cut down or branches taken off, you need to make sure that all precautions are taken to prevent it hitting your house (or out buildings). Where you have an outside contractor doing this work, and they cause damage to your property, then you have the right to seek payment for the damage from them. But your policy will still exclude this damage so you cannot ask your insurer to help.

THEFT – Cover is very wide, in other words the exclusions do not take much away from you. Where your home is left unoccupied for a long time (e.g. 30 days or more), then cover is restricted as it is seen as a more tempting target for thieves. Indeed, if you home is left unoccupied or unfurnished you should tell your insurer anyway! Similarly with a tenant or lodger. The risk of the tenant or lodge being involved in the crime is such that your insurer does not want to take the risk on, hence the exclusion. And again, if you are doing this, you should tell your insurer.

MALICIOUS PERSONS – In many ways this is the same as for theft.

BURST PIPES – Insurers position on this has gradually changed over the years for the better. A good insurer will pay for any leak, from any pipe, tank or water apparatus, even where it has been leaking over a period of time. Some insurers will also now include damage caused by frozen pipes defrosting. When I first started working in this industry, it was strictly the case that the pipe itself was not covered, only the resulting water damage. Where there is clear evidence that the pipe has failed due to rust then your insurer might still raise this argument. If a pipe is holed by a nail, say when fitting a carpet, then you will need accidental damage cover for the pipe repair but the resultant water damage to your building is paid for under this peril.

STORM OR FLOOD – What constitutes a storm is given in the grey areas page of this site. Frost damage is excluded although damage caused by snow is covered. A common area of disappointment is that damage caused to fences, gates and hedges are not covered. Some fences seem to blow down with even the most mild gust of wind! I have seen at least one insurer offering additional cover, at a premium, for storm damage to these items.

RIOT, CIVIL COMMOTION etc. – Again, it is rare for these to cause damage to your property, but when it does, you are covered. In certain circumstances, your insurers will have a right to recover their outlay from the local police.

LEAKAGE OF OIL – For those with oil fired central heating, any damage to your buildings caused by the oil leaking is covered.

TELEVISION, SATELLITE AERIALS – As indicated above, your buildings are protected if any receiving aerials collapses and cause damage. But the items themselves are defined as contents and thus, not covered by your buildings policy.

SUBSIDENCE – You will need help with this one!

First of all, it is going to cost you. There is a substantial excess, so you will have to pay the first part of any claim. Most policies now impose £1,000 but you can shop around for less. I hope you have some savings put to one side!

Second, your claim will take months, if not years to resolve. But more about the handling of subsidence claims under household claims handling. There is a long list of exclusions. Here is a typical list. If one or more of these apply, you are on your own.

All the outside drives, paths, terraces, walls, gates and so on are not covered unless your main buildings or outbuildings are damaged.
Landslip by coastal erosion
Movement of solid floor slabs unless foundations beneath outside walls also damaged by the same cause
Bedding down of new structures or newly made-up ground settling.
Then there are the extra’s that apply to standard cover. This is where you actually get some accidental damage cover with your standard perils.

Underground service pipes and cables. Apart from wear and tear, you are pretty well covered for any damage you are responsible for as owner of the building.

Glass and sanitary fittings. Again accidental damage to your bathroom fixtures, built in ceramic hobs in your kitchen and all the fixed glass and glazing in your building. Beware, that this is a clause further on into the policy that will restrict what you can claim for. Each item is treated as a separate item, not as part of a suite. Thus, if your wash basin is accidentally damaged, don’t expect your insurer to fork out for a new bathroom suite! This part of the policy might also carry the unoccupancy clause mentioned above.

Alternative Accommodation. Very important if your home is made uninhabitable owing to serious damage. Your insurer will pay for you to be put up elsewhere. This might be a local hotel or the extra cost to family and friends if they can give you a roof over your head. At least one insurer will also pay for your pets to go into boarding kennels if necessary. Cover might also provide for either loss of rent, if you are a landlord, or payment of rent due. There is a limit, a sum insured which is usually 20% of the overall sum insured for your buildings cover.
If you sell your property, the person who buys it can enjoy the benefit of the cover up to the date of completion provided they have no cover of their own.

BASIS OF SETTLEMENT – All good policies will provide for ‘reinstatement’. That is, in effect, ‘new for old’. It will be repaired with new parts and if the whole structure is beyond economical repair, it will re rebuilt with new parts and no contribution from you (except any excess). With some buildings, meeting new regulations might mean increased costs. Not a problem – but it only applies to the damaged part of the building. Demolishing, removing debris, shoring up and so on are all covered as are reasonable architects and surveyors fees, legal fees and fees for estimates, plans and so on.

Buildings Insurance – Other Clauses

SUM INSURED – It is your duty to make sure that the sum insured for your buildings cover is correct. It must be sufficient to pay for the rebuilding cost, not the market value. If is too low, you are ‘under-insured’ and this could mean having to pay part of the claim on top of your excess. In extreme cases, your insurer might even refuse to pay a penny. Once you have established the correct sum insured, and there are leaflets available for your insurer to help you, it will be index linked so should stay correct from then on. Don’t try and save premium by under-insuring your home. You will run in to difficulty with any claim of substance. The saving is not worth it

MATCHING SETS OF SUITES – check your wording carefully. Your insurer will usually try and restrict any repair or replacement to the item damaged only. You could end up with a funny looking bathroom suite! See the home insurance – grey areas page for my thoughts on how far you could push for full replacement of a suite.

LIABILITIES – This area is similar to ‘third party’ cover for your car. It is restricted to any liability you are responsible for as OWNER of the property. The vast majority of incidents involving your property will be brought against you as Occupier and will be dealt with under your contents cover! Thus, I suggest that if someone makes a claim against you, you approach your contents insurers first.

There are a few instances where you could need a buildings liability cover. Examples would include landlords who do not occupy the property, owner/occupiers of flats that share common parts of a building and so on. Actions brought against you under the Defective Premises Act. Cover is included Free with your buildings policy so you have it if you need it.

There is a long list of exclusions which are, by and large, common sense. These include contractual agreements that impose liability on you that you would not normally have, property you own, liability for any employers, damage and injury associated with lifts, if you are running a business and so on. There is usually a limit to the cover, the policy I am looking at is £2 million. Sounds a lot! But some liability claims can exceed that! See also the liability part of the contents cover.

EXTRAS – Some insurers have now bolted on extras such as free legal help lines and emergency assistance services. These can be very useful when you do encounter a problem so are well worth having. Your policy will finish with some general exceptions and conditions. These are much the same as those applying to contents so please check out the contents insurance explained page of this site for more information.

Contents Insurance – Definitions

It is best if you have both contents and building with the same insurer – it reduces conflict! Some insurers will have different views as to what is a content and what is a building! But shop around to get the best deal. It is unlikely you will achieve this with your mortgage provider.

A contents policy will have identical definitions to your buildings for most of the terms listed. Remember these are just definitions. Do not assume that just because your contents policy defines that the word ‘dwelling’ means something built of brick or stone with tiles or slates on the roof that your contents policy covers these things.

Contents Insurance – Standard Cover 

Your basic contents policy will provide for everything within your home whilst it is in your home. It can be extended to provide some cover for certain items taken outside of your home. More about that later. Therefore your contents includes: Household goods and personal effects of every description. That is anything within your home that could conceivably be of a domestic nature and that is not part and parcel of your buildings. Not only your goods and personal effects but anything in your home that you are responsible for. e.g. you are looking after something for a social club you belong to, or your children are looking after some items they’ve brought home from school for the weekend or holiday.

Your contents include your aerials and satellite dishes for your tv and radio. Note that it does not include transmitting aerials for amateur radio. If you are in to this you should ask your insurer to extend the cover.

Telephones are included along with permanently installed domestic appliances (this is where you could have disputes between buildings and contents insurers if wordings vary). All mains supply meters are part of your contents. Exclusions are ‘property more specifically insured’, that means if there was another policy in force that specified the item, you should claim on the other policy.

Then there is the accidental damage cover. This covers you for anything and everything that could possibly happen, unless it is listed in the exclusions. The ‘onus of proof’ is with your insurer. So if they reject your claim, they have to prove that the exclusion applies to your claim. Typical exclusions are:

Contact lenses (insure them via your optician).
Damage which is normal settlement and wear and tear etc.
Rot, mildew, rust, corrosion
Insects woodworm vermin
Dyeing, cleaning, repair or renovation.
Thus if you damage your clothes because the wrong washing machine setting – tough! There is no cover. What is vermin? The policy does not define this. Perhaps it should. Is a red squirrel vermin? Is a grey squirrel vermin? Is a fox vermin or a hedgehog? Where do you draw the line.

Interestingly there was a little press on this subject a couple of years ago. One insurer accepted a claim for impact by a squirrel that had sneaked into their home and knocked over a vase. Another rejected a similar claim on the grounds that they were vermin.

Many policies also exclude damage by domestic pets, but by no means all of them. I suggest that, unless the policy wording you have is crystal clear you should push for settlement. Insurers have to obey what is known as the ‘contra proferatum’ rule. This means that as they worded the policy, they have to accept the consequences if it is not crystal clear.

Contents Insurance – Personal Effects

This is where your policy covers all those personal items you take out and about with you. Your policy will give you a definition of what it covers but essentially, anything you could normally wear or carry when you are outside of your home.

There are exclusions of course. The exclusions will be similar to those that apply to the ‘accidental damage’ part of your contents insurance.

You will find that if you have cover for your personal possessions away from home this duplicates the ‘baggage’ cover provided by travel insurers. A claim on your travel insurance policy will result in them asking about your household contents cover and seeking ‘contribution’ from your household insurers.Your household policy will usually give you a better settlement, especially if it is on a ‘new for old’ basis. In fact you end up paying two premiums for the same cover. The trouble is that nowadays when so much insurance is purchased online there simply isn’t the flexibility to pick and choose which part of the policy you want and which you don’t. My advice is to shop around, you might still find it cheaper to buy your insurances online and to duplicate part of the cover than to go to a high street broker and buy the exact policies that you want.

UK Motor Insurance – FAQs

This is a collection of the most Frequently Asked Questions on the subject of car insurance and all that it involves.

Car Insurance FAQs (A-E) 

Conditional Fee:

Q : What is No Win No Fee?

A : No Win No fee refers to agreements called Conditional Fee Agreements (CFA’s) whereby you pay an insurance premium that fully protects you against all the legal costs involved in pursuing a personal injury claim. It is governed by the Conditional Fee Agreements Regulations 2000. This came into force on 1st April 2000, Essentially any insurance premium paid and any success fee which has been agreed to be paid can be recovered from the other party in the event of a successful claim.

Crossing the Road:

Q : Can a pedestrian ever be held liable for crossing the road?

A : There has been a recent case where this happened. The claimants were pedestrians struck by the defendant’s vehicle on a pedestrian crossing at a junction controlled by traffic lights. The claimants were obscured by a stationary lorry at the pedestrian crossing. The trial judge held that the defendant was not liable since he was under no obligation to stop at a green light, and if he was wrong on primary liability he assessed the claimants’ contributory negligence at 80%. The claimants appealed. The Court of Appeal held that a reasonable careful driver would have anticipated that there was a risk of a pedestrian on the crossing as the lorry was still stationary and the lights had only just changed. The appeal was allowed upholding the judges finding of 80% contributory negligence.


Q : Can you please tell me what a CD10 conviction code is ?

A : Driving without due care and attention. A comprehensive list of motoring conviction codes can be found by following the link in the right hand column.


Q : Why do I have to pay an excess when it was the other drivers fault?

A : When you took out your policy, you entered into a contract with your insurer in which you agreed to pay the first amount of any claim you make (usually for damage to your car). This applies irrespective of who is to blame. If you are not at fault, your excess, which is an uninsured loss, can be recovered from the negligent driver or his insurer.

Car Insurance FAQs (F-M)

Jumping The Queue:

Q : I was coming out of a side road and was struck by a vehicle jumping the queue. Who is to blame?

A : This sounds very similar to a case that came before the Courts some years ago – Powell V Moody (1966). In that instance, a motorcycle was jumping a queue of traffic on the wrong side of the road and collided with a vehicle edging out of a side turning. The Court held an 80/20 split with the motorcyclist being 80% to blame. Your case might not be identical to this but it will give you an indication as to what you might achieve.


Q : My son caught the car of another driver whilst reversing over a speed bump into the space behind, to park. The damage to the car, was a very superficial mark to the door of the other car, but he still gave his insurance details. This was in September 2001. He didn’t hear any more, and assumed that the mark was so slight that it could be ‘T-cut’ out. However, this week (20th January 2002) he has received a notification of the other parties claim. Is there a limit to the length of time a party can have to put in a claim?

A : The other driver’s claim against your son arises out of the common law tort of negligence. There are time limits which are governed by legislation in the form of the Limitation Act 1980. However, they are very long! For property damage (as in this case) the limit is 6 years! (Had there been injury, it is only 3 years). This time limit starts from the date of the accident and applies to the date that civil court proceedings are issued naming your son as the Defendant. The best thing to do is put it in the hands of your son’s insurer and let them deal with it. Tell them of your reservations about the extent, or rather lack of it, of the damage to the other car.

Latent Defect :

Q : My car was parked in a Golf Course. A Council tractor was parked at the top of a slope. It slid down the slope and hit my car. The insurance company deny liability saying it was caused by a puncture they could not have foreseen and was a “latent defect” so have not been negligent.

A : If they want to prove latent defect, they will have to produce service records to show that the vehicle was properly maintained. I would have thought a vehicle with a puncture was less likely to roll than one with good tyres! What happened to applying the handbrake or putting it in gear? Or were these defective as well?

Motor Insurers Bureau:

Q : I was wondering whether you could advise me on my situation. A couple of weeks ago, one night a drunken driver hit my car full on (and is now a write off) I only have third party insurance (I am a student). The driver has no insurance and cannot pay anything towards the cost as he is also unemployed. Is there any form of compensation I can get?

A : I hope the police have prosecuted the drunken driver! The answer to your questions is a cautious ‘yes’. You can apply to the Motor Insurance Bureau for compensation. Some details of their activity is shown on my web site or you can go to their web site. However, for property damage (i.e. your claim is for your car and not personal injury) there is a huge excess to pay so if you car was quite old and not of high value, it might not be worth your while.

Q : My wifes car was recently hit by another car on a roundabout. The other driver sped off without stopping. Fortunately my wife was unhurt but the front offside wing of the car was badly damaged. My wife managed to get the first 4 digits of the licence number & the colour of the car but not the make or model. This was reported to the police who “attempted” to track down the owner of the other vehicle but without success and suggested we try the MIB. The MIB site seems to suggest only death or injury is covered. Is it worth trying to pursue a claim if the cost is likely to be close to excess or should we take the hit on the no claims?

The MIB have two separate agreements with the Govenment, the first provides compensation to the victims of uninsured drivers. Here owing to EU legislation, the compensation includes property damage. However, the second agreement – for untraced drivers, is for personal injury and death only. So I am sorry to say that in the circumstances you describe, there is no point in trying to pursue a case against the MIB. You will either have to take a hit on your no claims discount or withdraw your claim and pay for the repairs yourself, whichever is the cheapest option for you.

The cheapest prices for UK car insurance are found on price comparison websites such as Instant Online Insurance

Car Insurance FAQs (N-S) 

New Claim Notification:

Q : I was involved in an incident recently where there was no damage to my car, other than scuffmarks. Do I still have to notify my insurance company?

A : You should notify your insurer. The policy conditions say that you must report it but the choice of whether to claim is down to you. You could report it ‘for information purposes only’. That way they would at least know of it if they were approached by the third party directly. If you don’t you might breach policy conditions and your insurer refuse to deal with the third party damage.

 No Win No Fee :

Q – What is No Win No Fee

Legal Aid was replaced for personal injury litigation by Conditional Fee Agreements – the so called No Win No Fee. You ask a solicitor to pursue a claim against someone you blame for your injury. They evaluate how good your case is and enter into a Conditional Fee Agreement. You will need to ask your solicitor for full details of the agreement and how it works. Some schemes will deduct a fee from your damages some will not.

Police – reporting to:

Q : If you have an accident in which someone is injured, do you have to report this to the police?

A : The answer is ‘yes’. You should report it at the time of the accident but it must be reported within 24 hours. They will also check your RTA certificate of insurance which must also be produced to them within 7 days. (If you haven’t got it with you when you report, they will serve you with an ‘HO/RT1’ form\line demanding sight of it). However there is the new MID (Motor Insurers Database) and the police can check your insurance on this computer system at the scene of an accident. Failure to report it or failure to produce the RTA certificate could result in criminal prosecution.

 Road Tax:

Q : Is the insurance policy still effective if I haven’t taxed the car?

A : The answer to your question is ‘yes’. There are no standard terms or conditions in your motor contract that says you must tax your car. They might not be that happy though! However, if you use the car on the road without tax that is a criminal offence for which you could be prosecuted. If you do not plan to use your car on the road for some time, i.e. it is ‘laid up’ and kept off the public highway, then not only could you save money on not taxing it but you could also ask your insurer to reduce cover to ‘laid up fire and theft’. This would mean returning your certificate of insurance and then you would not be covered if you took the car out on the road.

Smoke damage:

Q : There was a lot of smoke but all that was damaged was the wiring loom. Why will you not pay my claim?

A : Where the wiring loom has sustained damage by an electrical breakdown, but there were no flames as such, there has been no fire. Just an electrical fault. These are excluded by the policy. So, sorry, but you will have to pay for the repairs to the wiring yourself. If the wiring loom has set the rest of the car on fire, then that damage can be paid for by the policy (assuming you have at least ‘third party fire and theft cover’). Strictly the wiring loom should not be paid for but it might not make any difference if the rest of the damage renders your car a total loss.

 Same Insurer:

Q : I was hit by another car and although the other driver was clearly at fault and I have a witness, the other driver denies liability. The trouble is, we are both covered by the same insurer. So I think it is impossible for them to represent me impartially.

A : When I have been in this position, I have relied upon the witness evidence, when available, to make an impartial decision between the two clients. However, if you feel you are not being treated fairly, then you have the option of using the Financial Services Ombudsman or commencing an action in the “Small Claims Court”.


Car Insurance FAQs (T)


Q : Perhaps you can help me with a specific theft claim I am dealing with at present. Do you know of any recent motor theft cases where the keys were left in the vehicle and the claim was won by the claimant? Also what constitutes unattendence of a vehicle – what is the distance from the vehicle where it is considered to be unattended? I would really appreciate any cases you can throw up and advice you may have.

A : Richard Leighton Haywood V Norwich Union Insurance (1999). This one is bad news. Originally, the Court ruled in favour of the claimant but it went to the Court of Appeal in 2001. They held that the clauses were clear and that the claimant had breached the policy wording about leaving the car unattended etc. My advice is NEVER EVER leave your car unattended, unlocked and with the keys in it! Previously, an insured failed to take reasonable care only if he was reckless, and not if he was merely negligent (Sofy v Prudential Assurance Co Ltd (1993) In my view, each case will be looked at on its merits. You need first to check out the precise wording in the policy. This one had a specific exclusion relating to leaving keys in the vehicle. Some do not and you might only have to battle a ‘reasonable steps to safeguard’ condition. Then you have to look at the facts of the case, where did he leave the vehicle (e.g. on his driveway? on a public road? in a petrol station?) How far away was the insured? Did he have his back turned or was he inside a building? How long had he left it? Was the engine running? Thus you might manage to succeed if he had just stopped at a post box. But if your client had left it for some minutes on a public road, unattended, unlocked and with keys in ignition, then I doubt you will overcome the policy conditions and exclusions.

Q : My car has been stolen, Will it affect my Bonus?

A : This depends on three factors. One, do you have a ‘protected’ bonus? If yes, you are okay provided you make no more claims. Two, is the thief caught and does he have the means to pay for your car? Probably Not! Three, is your car found undamaged – hence no need to claim? REMEMBER – your bonus is a ‘NO CLAIM BONUS’, not a no blame bonus. In general if you make a claim and your insurer pays out, it is recorded on your record as a claim. In the vast majority of theft cases, the claim will affect your bonus.

Total Loss – there are many questions about total loss claims and salvage

Q : My car was a total loss, can I reclaim part of my premium? I do not intend to replace it.

A : The answer is NO. When your insurer pays out your total loss claim they have discharged their contractual obligation to you. The phrase they might use is that your policy has ‘discharged by performance’ Basically your side of the deal is you pay the full annual premium, their side of the deal is to provide you with the protection specified in the contract. They have kept to their part of the deal. To keep to yours, you must pay the full annual premium.

Q : What happens if you disagree with their value?

A : This is probably the single most common problem with a total loss claim. Do insurers quote a lower value expecting to be negotiated upwards? They certainly used to. Some might still do so. But many insurers now give you the value that they genuinely think is correct for your car and do not expect to negotiate further. If you don’t agree their value you will have to come up with some pretty convincing evidence to prove their engineer is wrong. I suggest you consider the following:
1) Buy a guide in a shop (there are usually one or two in the stationers) and look up the quoted pries for your car. Make sure you look up the right model! These figures will be close to those available to the insurers engineer.
2) Check out the ads in your local papers and car magazines. See what similar cars are being advertise for.
3) Check out your local dealers and see what they claim to be selling cars like yours for.
4) You might have to consider appointing your own independent engineer to value the vehicle.
5) Talk to your insurers (without losing your ‘cool’). Ask them to justify their value and how they calculated it. Then use your evidence to throw doubt on their value and justify your own value. REMEMBER – car dealers put excessive prices on the windscreens of the vehicles they have on their forecourt. This gives them some room for negotiation with both the price of the car they sell and the trade in, if any. So don’t start with an inflated opinion of your own cars worth!! And remember, your insurers will only pay the market value of the car, not all the extras your local dealer will throw in such as the cost of the ‘free’ warranty.
If you are still not happy with any revised value given to you, you can complain to your insurers General Manager or submit your complaint through your insurers complaints procedure. With most insurers this will be the Insurance Ombudsman Bureau. The insurers will weigh up the cost to them of a case being reviewed externally against the disputed values. The chances are that, unless you are being unreasonable, you will win. Any review will again look at the ‘book values’ so don’t expect to receive more than the guides quote.

Q : I kept the vehicle documents in the glove box – can you deal with the claim without them?

A : You must obtain duplicates. The V5 (registration document) can be obtained from the D.V.L.A. Forms are at your post office. The garage who did your MOT can supply a duplicate upon request. Needless to say there will be a charge for these. Without a V5 your insurer will not settle your claim. Without a current, valid, MOT, your insurers will still settle but will reduce your value. Would you buy a car over 3 years old that had no MOT and expect to pay the full price for it? Come on! Of course you wouldn’t – so don’t ask your insurer to. What if they won’t pay you more than the ‘insured value’? When you took your policy out, your insurer will have asked you for the value of your car. With the vast majority of cars that figure will not have influenced your premium. But it does influence the value you might receive for a total loss or theft claim. If you have undervalued your car so that the ‘insured value’ is less than the true value, your insurers will only pay out the ‘insured value’. My advice, if they do this, and provided the difference is not that great, kick up some fuss – assertively but gently. If you can show that the notified value was an error either by them or by you; there was no attempt to deceive them and that they have not been prejudiced in anyway by this ‘nondisclosure’ the chances are they will relent. If they don’t, you have learnt a lesson and you should change insurer to a more customer friendly one. Of course, if you are insured via an insurance broker then you can ask your broker to do all this for you. It is one of the advantages of having a broker – when you have a dispute with your insurer, they will usually take your side and can pull favours for you that you can’t pull when you insure with one of the direct insurers.

Q : I want to keep the salvage. How can I do this?

A : My advice is DON’T. Most insurers are very reluctant to do this these days. You will cause yourself a lot of unnecessary hassle and difficulty. If you do so, what will you do with it? Will you repair it yourself or get a friend to make a ‘dogs dinner’ of repairing it with parts from a scrap dealer? What will you gain? I would suggest a car that has seen some serious ‘action’ and probably a bodged up repair on the cheap? Is your life that cheap? Where the damage to the car is such that it does not fall into the ‘break it up’ categories of salvage, Insurers will assume you to settle the claim by way of cash with the salvage, will then get a friend or local garage to fix it up on the cheap and pocket the difference as profit. They do not like their customers trying to make a profit out of them! Further, there has been a lot of criticism in the past by the consumer media of the insurance industry for letting seriously damaged cars back on the road. Insurers only deal with registered salvage dealers and some now have their own salvage companies.

Q : What if my car is old, I am on a pension and can’t afford to buy another one?

A : In theory the value you receive from your insurer should be enough for you to find a car of the same make, model, mileage, condition for the money they pay you. You and I know that, in practice, this does not always work out. I have had conversations with insurance motor engineers where they have stated quite openly that they like to get the old cars off the road. So when looking at the cost of repairs V value of the car, they take into account new parts at full manufactures list price and labour rates from the main dealerships. EXPENSIVE. I propose two possible solutions.
No 1: Go to a local reputable garage and ask them to quote a ‘contract repair’ figure using non-standard parts (e.g. Halfords brand) or decent second hand parts. This price might well make it a viable repair and your insurer can then be persuaded to authorise this contract repair for you. A contract repair is where the garage agree to repair a car for a fixed sum, say £1000, rather than repair it based on an agreed labour charge plus parts at list price and VAT. e.g. £250 labour. The parts and labour and VAT are all included in the £1000.
No 2: is to pay the extra yourself if the difference between the total loss value and the repair is not that great. This second option will cost you some money but at least you will retain your car, properly repaired, and perhaps at less cost to you than buying a newer car.

Q : My car was ‘written off’, you kept the salvage and the other day I saw it drive past my window. Please explain!

A : Insurers are a business that want to make a profit. To do so they need to keep a check on the cost of claims settlements. Thus, even with the criticism of the consumer media they allow their salvage dealers to pass cars on for repair and resale. They get a better deal on the sale of the salvage. Whilst a few brave insurers have declared they will break all salvage with so many motor insurers in the market, this will not become standard practice without legislation, strictly enforced code of conduct from the ABI, or a means by which the insurer sees this option as being better value in some way to them. Until then, you can expect this to happen from time to time and there is nothing you can do about it.

Q : You kept my salvage, against my will when you settled my claim the other week. I have now received a notice of a parking fine not paid. What do I do?

A : This follows on from above, where the salvage has been repaired and the car has found its way on to the road again. Fortunately, it does not arise very often! On the back of the form you receive, there are some fields you can fill in to say that the car is no longer yours, that it has been sold on to your insurers. Fill this form in and return it. Keep a copy. You might even persuade your insurers to fill it in for you!

Car Insurance FAQs (U-Z) 

Uninsured Losses:

Q : Have looked at your site with great interest and have a question to pose for your FAQ section. My car was a total loss after an accident and was not my fault, is it possible to claim (under uninsured losses) for the further expenses incurred in replacing the car? Eg time off work, vehicle history checks, inspections, hire car.

A : You can reclaim any reasonable expense that a court would award you. Assuming you are making the efforts to replace the car whilst awaiting the settlement cheque, the costs involved in finding a replacement for your car could come under ‘general inconvenience’ and car hire is certainly claimable. Where you can produce a receipt or documented evidence of a loss, such as an invoice for car hire, you should not experience any difficulty. Where you are claiming for general inconvenience, the figure is usually negotiable. Some third party insurers will be more generous than others.The problems start to arise when you claim for costs incurred after you have been sent the cheque for your total loss value. Insurers seem to think that you can then wave a magic wand and a replacement car just appears. i.e. they are more reluctant to pay up for losses incurred at this stage. At the end of the day, if you don’t get what you think you should, go for a hearing in the small claims track of your county court.

Q : I am writing with regards to claiming for Loss of Vehicle use resulting from a Road Traffice Accident. I would appreciate it if you could provide information as to the rates at which u can claim, for loss of vehicle use per day.

A : The rate is usually negotiable. In my experience, most reasonable insurers would settle at £10 a day/£70 per week for short term loss of use. If you are looking at longer term then £50 a week would seem reasonable. If you want more, you would need to be able to justify it.


Q : Why do I have to accept a total loss when my car could be repaired for more money?

A : This question was considered in the Courts some years ago. Darbyshire V Warran (1963) held that an owner of an old car cannot expect to have it repaired at a cost greater than its market balue unless the car is uniquie and irreplaceable and where the car is readily replaceable, the measure of damage shall be the vehicle’s market value.

UK Motor Insurance – In The Event Of An Accident

What To Do In The Event Of An Accident

If you have an accident there are some things you must do by law. They come from the Road Traffic Act(s) These are set out in the Highway Code and also in many road atlas’s and other publications for drivers. You should also check your car insurance documentation to see what exactly your insurer requires of you when you are involved in a road traffic accident.

Just to remind you, the Highway Code says:

If you are involved in an accident which causes damage or injury to any other person , or other vehicle, or any animal (horse, cattle, ass, mule, sheep, pig, goat or dog) not in your vehicle, or to roadside property you MUST:

  1. Stop
  2. Give your own and the vehicle owner’s name and address and the registration number of the vehicle to anyone having reasonable grounds for requiring them;
  3. If you do not give your name and address at the time of the accident, report the accident to the police as soon as reasonably practicable, and in any case within 24 hours.
  4. If another person is injured and you do not produce your insurance certificate at the time of the accident to the police or to anyone who with reasonable grounds has requested it, you MUST also:
  5. report the accident to the police as soon as possible, and in any case within 24 hours;
  6. produce your insurance certificate to the police either when reporting the accident or within seven days at any police station you select.
  7. The conditions in your policy say that you must not admit liability. Even saying ‘sorry’ can be taken as admission of guilt. IT IS NOT UP TO YOU TO DECIDE WHO IS TO BLAME.

Leave that to your insurers and if necessary the law courts. Also, the police do not decide who is to blame. If they are involved they will be collecting evidence to determine if a criminal offence has taken place and if so, reporting this to the Crown Prosecution Service.

If they have evidence to prosecute someone for a driving offence the chances are that the same evidence proves an act of negligence in a civil court.

 What To Do In The Event Of An Accident (When It’s Your Fault !)

Some people have difficulty accepting that they could possibly be to blame for an accident. This is especially true of older drivers who have ’40 years unblemished record’ or those who have passed an advanced driving course. I recall a claim form which said ‘ this accident was not my fault – I am an advanced driver and he should not have stopped in front of me!’ (This driver had just hit a stationary car.)

But the truth is that even the best of us can have a momentary lapse of concentration. And of course there are those with an aggressive driving style or a very timid driving style which is just asking for trouble on today’s overcrowded roads.

When you report to your insurers, tell them the truth! It is OK to admit to your insurers that it was your fault. They will not thank you if you bend the truth to try and make out it was not your fault as they might try and defend claims made against you, lose and ultimately increase they outlay. They would much rather you told them simply and clearly what happened than make up a story that might make you feel better but will set them on a long and expense dispute they can’t win. e.g. ‘ I drove out of the side road without looking and was hit by the other car’ is much better than ‘ I stopped at the junction and looked both ways, nothing was coming so I started to cross when he hit me. He must have been going so fast and it was all his fault’

By being honest, holding you hand up and telling your insurers exactly what happened, you give them a much better chance of making the right decisions about how to deal with the third party aspect of your claim. If they know they will have to pay the other drivers claim, they can start to take steps to limit and control the amount of money they have to pay out.

You will probably receive loads of letters from the other drivers insurance company, his brokers, his legal expense insurers or his solicitors, possibly his employers (if using a company car) and so on. Just send them all off to your insurer, unanswered. They will look after this for you. Some solicitors in particular can be very threatening and intimidating with the style of letter they use. They says things like ‘you must tell us the name and address and policy number of your insurers or you will be in breach of the Road Traffic Act and we will report you for a criminal offence’ ‘You must admit liability in writing within 7 days or we will issue proceedings against you’ and so on. Just ignore it! Don’t get worried. Let your insurers deal with it. I have had numerous telephone calls from my customers who have become very frightened by this sort of letter. There are some very aggressive solicitors out there today who have found a ‘gravy train’ by doing this sort of work. Since the implementation of the ‘Woolf reforms’ in April 1999, solicitors should now use a standard ‘letter of claim’ but this is still somewhat intimidating and I would urge Lord Woolf to ‘tone it down a bit’.

You could also receive a Summons through the post. There are two possible Summons you might receive (for my dear readers in Scotland, this bit applies to English Law but similar action happens in Scottish Law)

– A summons to answer a criminal prosecution in the magistrates court (or Crown Court if the alleged offence is very serious)
– A county court ‘claim form’ (or possibly a high court writ) seeking payment of ‘damages’ for a civil action.

In either case, send this immediately to your insurer. They will look at it to see what the summons is for and decide what action to take. They might appoint (and pay for) a solicitor to defend you or if it is a civil matter, they might just decide to pay up.

If you feel the need to talk to your insurer, please do so but do not delay in letting them have the Summons. That is the worst thing you can do. There are time limits in which action must be taken.

The best prices for UK car insurance are to be found online on price comparison sites such as Instant Online Insurance

 What To Do In The Event Of An Accident (When Both Parties Are To Blame)

Accidents frequently happen where more than one driver is partly to blame.

Quite often one or more do not accept any fault and some heated exchanges have been known to take place.

The civil courts deal with this under the ‘Law Reform (Contributory Negligence) Act 1945’ It is necessary to calculate the full cost of the damage caused and then reduce it by the % of blame between the drivers.

There is no precise or scientific way to do this. And the % is negotiable. But it is a method that works quite well and until someone comes up with something better, that is what happens.

The classic example is the narrow road collision. In a road just wide enough for one car, two cars approach each other and one or both fail to stop in time. Both drivers blame the other for failing to stop. There are no witnesses. No evidence to show who is right. Both could be right – perhaps they both failed to stop in time. Cases like this are usually settled with each driver taking 50% of the blame for the accident. The insurance claim is settled on a 50/50 basis. The total cost of all the damage to both cars and associated losses is calculated. Each insurer then pays a half. You would get half of your uninsured losses back.

There are legal text books full to the brim of cases that have gone before the courts where there has been an apportionment of contributory negligence. They cover just about every eventuality you can imagine. Your insurers have access to all this ‘case law’ in their office.

If you find your self in this position, talk to your insurers about what they feel is a satisfactory position to adopt. They will often be right, if you have told them the truth! Then get negotiating with your opponent. As a last resort consider the small claims procedure.

Some people think that insurers share all claims on a 50/50 basis. This is not so, all claims these days are dealt with on their merit. Some years ago insurers had agreements with each other to resolve cases quickly and amicably. They did not impact upon the issues of liability! The most well known agreement was called ‘the knock for knock’ agreement. It has all but died a death. So you have no need to be worried about it!

UK Motor Insurance – Third Party Claims

Third Party Claims – Credit Hire

If you are in need of a hire vehicle owing to an accident that was someone else’s fault then this page will be of interest to you. There are gaps in the motor insurance policy cover you can buy and the losses you might sustain in an accident. Those losses not covered are called ‘uninsured losses’ because they are not insured. A few years ago, one of these gaps in cover was plugged by the hire car business.

If you go back to the 1980’s or earlier, and you wanted to hire a car and recover the cost from a negligent driver’s insurer, you had to pay for it up front, obtain a receipt and then spend weeks, if not months waiting to get your money back.

Now you can go to a credit hire firm and obtain a car on credit. They will supply the car hire to you on credit and pursue recovery, not only of the cost of the hire, but also your other uninsured losses as well from the negligent third party and their insurers.

Sounds simple, but the insurance industry was not happy.Why? Because the cost of the credit hire was significantly higher than the cost of a normal car hire rates. So there were many legal disputes’ between the new credit hire industry and the insurance industry with thousands of court cases clogging up the system. Indeed, many credit hire firms found themselves with cashflow difficulties and went bust or were taken over.

During 2001, following a landmark hearing in the House of Lords, insurers and credit hire firms have largely resolved their differences. I have little sympathy for the insurance industry, this has arisen through their own fault. Instead of listening to the needs of their customers, they have their heads buried in litigation. Even now, it is seen as a claims problem. WRONG!

If senior managers and underwriters of all the major insurers redesigned the concept of a comprehensive policy, and provided the cover and services now demanded by the insurance market, they could have avoided all this difficulty and expense in the first place.

Third Party Claims – Personal Injury

If you have sustained an injury, even of a minor nature, I really do urge you to seek professional help from a good solicitor. You can in some instances, pursue a claim yourself but you really do need to know what you are doing!

A claim for a minor injury can take a long time to resolve and anything of note will take years. This is partly due to the length of time mother nature takes to heal up injuries and partly to the wrangling of solicitors against insurers.

From an insurers viewpoint much of the blame for these long delays can be laid at the feet of the legal profession but I dare say, they would blame claims handlers!

Things have improved since the introduction of the ‘Woolf Reforms’ in April 1999. These reforms made major changes to the civil court processes and, of particular importance, set rules for the first time, called ‘personal injury pre-action protocols’ that apply before litigation begins.

Sadly, there was a Court of Appeal decision in 2001 that suggests their Lordships still have their heads buried deep in the pre-Woolf confrontational days One could write a whole new book on this subject alone and it is really outside the scope of this web site to start looking at some of the issues.

Third Party Claims – The Motor Insurers Bureau

If you have a right of claim against another party but they are uninsured, or untraced, you might be able to make a claim on the M.I.B.

I would strongly suggest you contact a solicitor for help! The Motor Insurers Bureau has been set up to safeguard the interests of the victims of uninsured and untraced motorists. The Motor Insurers Bureau consists of all insurers who are authorised to underwrite motor business in the UK and Northern Ireland and under the terms of the Road Traffic Act(s) all such insurers are required to be members.

The Motor Insurers Bureau also administers the Green Card scheme.

The Motor Insurers Bureau has a small permanent secretariat which deals with the initial approaches from claimant’s or their advisors. The day-to-day handling and investigation of claims is done by the insurers forming the Council of the Bureau.

The Motor Insurers Bureau is paid for by levies on all motor insurers, the amount of an individual insurer’s levy being determined by the motor premium income for the previous financial year. The number of cases allocated to an individual insurer is in proportion to their premium income for the previous year.

This is seen as a very socially desirable objective of the Motor Insurers Bureau.

The market’s involvement in this area is considered by others outside the insurance world to be the motor insurer’s best piece of public relations.

The Motor Insurers Bureau undertaking and obligations are contained in Agreements with the Government. One agreement relates to the victims of uninsured motorists and the remaining two are concerned with the victims of alleged untraced motorists.

Victims of uninsured drivers can claim for personal injury and damage to their property (subject to an excess of £300 on property claims).

Victims of untraced drivers can only claim for personal injury.

Third Party Claims – The Motor Insurers Database

The Motor Insurance Database (MID) has been developed by the motor insurance industry to capture the insurance details of every driver in one central database, through unified IT systems.

The new database of insured drivers allows the police to check instantly whether a driver is insured or not.

The move is an attempt to reduce the high number of uninsured UK drivers who cost the motor industry more than £600m per year.

The police can access the database from the roadside either by calling through to a police station or by using a hand held computer.

Apart from allowing the police to target offenders more effectively, the system is expected to be an aid to insured drivers who are not carrying their documentation.

They will no longer have to report to a police station within seven days.

The new database should act as a deterrent to uninsured drivers are they are likely to be caught more often.

UK Motor Insurance – Making A Claim

Most people regard an impact on the road as an ‘accident’. There are those who will say that bad driving is not really an accident in the true sense of the word. There are all sorts of other reasons why you might need to make a claim on your motor insurance. For example, your car might have been stolen, broken into, caught fire, had its windscreen chipped and so on. For this reason, I shall refer to the loss or damage that might arise and that can be claimed upon your policy as the ‘claim event’

So what do you do to make a claim once you have been unlucky, or careless, and had a claim event happen to you?

Let us suppose your car is struck by another vehicle. In the past, you used to have to go and see your insurance broker. Your broker would have given you a claim form or accident report form to fill in. You would be asked for two or more estimates for the repairs to your car. After filling in the form and running around town obtaining estimates, you went back to the broker. He would post them off to the insurance company. They would take 2 or 3 days to set up the claim on their (paper) records. They would reply to the broker, possibly requesting an inspection by their motor engineer. By the time the broker received this, it was a week passed the date of the claim event. You would need to take the car to the chosen repairer (always the cheapest) and wait a few more days before the engineer could see it and approve the work.

There has been a bit of a revolution! This is due in part to the computer and due in part to the introduction in the 1980’s of ‘direct’ insurance. The result is that the speed of service, whether you have bought by telephone or internet, from a ‘direct writer’ or via a broker has improved dramatically.

Let us assume you have all the benefits of a comprehensive policy plus all the ‘add on’s’ discussed in the the section on policy cover.

You can summons help from the scene of the accident, via a mobile phone or nearest pay phone, get your car towed to the nearest approved repairer of your insurer where authorisation for the repair is automatic. A courtesy car or hire car is provided so you can keep mobile whilst the work goes ahead. The chances are that if the repair is not too extensive you will have your car back within a few days. So your car could be repaired and back on the road in the time it took just to get an engineer out to look at it, in the past. And you have been mobile the whole time.

Having returned home, telephone your insurer. they might already know of the accident. Both the recovery service and the approved repairer are instructed to report it to them.

Some insurers will still require an accident report form and will post this to you. Others will partially fill one out on their computer screens whilst you tell them of the accident. Some insurers have done away with the need for claim forms. Instead, they record your telephone conversation. And the recording constitutes your claim form.

Reporting via the Internet is now happening but insurers are slow to adopt this new medium for claims activity. If you do need to go and visit your broker, many of them now have ‘e-mail’ links to their insurer, or they will pick up the telephone to report it for you. Brokers have had to improve their service to their customers to keep pace with the new ‘direct’ companies.

Car Insurance – What To Do When Claims Go Wrong

Things don’t always go that smoothly or quickly!

Many customers cause problems for themselves. They just don’t seem to realise that things are geared up to provide this fast and efficient service to them.

For example, there is the customer who insists on having a claim form to fill in. The customer who does not want to give the details of the claims event over the telephone. O. K. fine, but don’t then expect such a speedy service. You are causing delays for your claim.

There is the customer who wants to use his own garage. So he has to go and obtain an estimate and post or fax it to the insurer. In effect this claim has reverted to the old fashioned and slow way of dealing with things.

Then there is the customer who wants a hire car delivered outside the parameters of the policy cover or who does not like the courtesy car supplied by the approved repairer. Some keep their hire/courtesy car longer than their policy permits and get upset when you ask them to return it or pay the extra costs. Some start off in a hire car with a full tank of fuel, return it empty then complain when they are charged for re-filling the vehicle. (Hire firms charge a very high price for fuel!)

My advice is simple. Follow the instructions of your insurer or broker. They are trying to provide you with the best service in your best interests. Why cause problems and hassle for yourself?

Policy excesses cause a lot of problems. Many people still think that if an accident is not their fault, they don’t have to pay their excess. NOT TRUE. Your excess payment is your share of the loss or damage and you have entered into a legally binding contract with your insurer in which you agreed to pay the first £X amount irrespective of blame for an accident. You might be able to recover this as an uninsured loss. But that does not mean you do not have to pay it in the first place.

Remember that the vast majority of claims are dealt with quickly and without problems

The Total Loss or Write-Off

What is a total loss or write off? It arises where the cost of repairs to a car exceed the value of the car, taking into account the salvage value.

So lets say your car is badly damaged. This could have arisen from an accident, a fire, or theft damage. And it costs, say £5000 to repair it. If the value of your car is , say £5,500 and the salvage is worth £600 then it is cheaper for your insurer to total loss the car rather than repair it.

Suppose the salvage is only worth £400. The chances are they will still total loss the car. The estimated cost of £5000 to repair is based on a visual inspection and assessment of the damage. There could be more damage discovered if it were stripped down. So it would be regarded as a border line total loss.

Total loss procedure. As soon as it is clear that your car is going to be a total loss, your insurer will want the following things to happen.

1) They will want to move the damaged car into ‘free and safe storage’. This is usually at a salvage dealer. The reason is simple. Garages have discovered there is easy money to be made. They won’t get the repair job but they can charge your insurer just for keeping your car on their premises. Some charge extortionate daily rates that make car clamping fees seem like peanuts! Even the cheapest rates are similar to car parking fees in Central London. Insurers pay out millions of pounds each year for storage charges so they want to move your car FAST!

Because a few policyholders have caused problems and cost them unnecessary money they might even tell you they are going to move it in 48 hours rather than asking your permission. What has happened on occasion is that the salvage teams move so quickly that the salvage truck is collecting the car before they’ve even told you it is a total loss! Naturally this can be upsetting to some people.

But taking into account the reason, please be understanding! They are not disposing or your car, just moving it to save money. You might ask why you should worry about saving your insurer money? The reason is simple. The more they pay out on claims, the more you pay out on premiums. It is in your interest to help them save money.

My advice is – help them. Always agree to have it moved from a garage. If you refuse, they can insist you pay the storage charges from the point of your refusal.

Sometimes with an older car, it can be a total loss yet still be safe and legal to drive. It might have a low value and only some minor cosmetic damage. Often insurers will let you keep this at home whilst the next steps in the procedure take place, provided it is not incurring any charges.

2) They will ask you for the vehicle documents. That is the V5, registration document; MOT certificate if your car requires one; and possibly purchase receipts, service records, keys and details of any outstanding finance. They will ask for your Certificate of Insurance to be returned. They will need the original documents before they settle your claim. Copies to start with will suffice but will delay the process.

If you ask them why they want these documents, they will probably tell you they need to check they have the right model of the car, that it had a valid MOT and proof of service record to establish that is has been maintained. These are all valid reasons. But they also want to check out your claim for fraud. Official documents have several anti-fraud measure built into them by the issuing Government agency. A careful check on the originals will enable the claims official to establish quickly that these are genuine documents and not fake. If there is doubt, they can use forensic science equipment to validate the documents. You would have to be a very clever fraudster to forge successfully all these documents.

My advice is – let your insurers have the original documents as soon as they ask for them. Just sending copies delays your claim.

3) Whilst you are waiting for your settlement proposals, your insurers will be doing other things as well. They will record the claim on the ‘motor insurance anti fraud and theft register’. (MIAFTR) This is a national data base that has been recording all insurance total loss vehicles and stolen cars since the early 1980’s. It checks your car against all the information in the database to see if it has ever been the subject of an insurance total loss before, or whether it has been previously stolen and not recovered. It checks against your name and address; post code; your vehicle’s registration number and VIN (vehicle identification number). If there is a match further questions will be asked of you and your insurer might go into ‘fraud investigation’ mode.

MIAFTR also automatically checks your car against the HPI (Hire Purchase Information). If you took out finance to buy it and you still owe money, it will be on this database. And your insurer will find it. So be honest and tell them about your finance. The finance company is the legal owner of your car. Any settlement must be made to them until the loan is paid off. Anything left over goes to you.

Similarly, your claim will be recorded on CUE (Claims and Underwriting Exchange). This happens automatically on all motor and household claims. Not all insurers subscribe but the vast majority do.

Problems arise where the outstanding loan exceeds the value of the vehicle. The insurance policy does not pay off the loan in full.

I recall a scheme for motor cycles. Young people went into a shop, bought a new motor cycle plus all the leathers, helmets and so on with finance against the vehicle. The interest on the loan was very very high. A few days later there was an accident and they would total loss it (or it was stolen). The value of the motor cycle was much less than the total purchase price plus the interest. It caused a lot of upset which was blamed on the insurer and not the stupidity of the motorcyclist for entering into such a bad deal with the shop.

4) Your insurer will be obtaining bids for the salvage. The more they can get, the less the final cost of your claim. There has been a lot of controversy about cars which have been written off finding their way back on to the road. Or being purchased by the criminal fraternity to aid their disguise of a stolen vehicle.

The Association of British Insurers (ABI) have issued a code relating to the disposal of vehicle salvage that meets current legislation as well. All member companies adhere to this code. The result is that most salvage is sold by insurers to reputable salvage dealers. If it is damaged to an extent that meets certain criteria, it will be issued with a code that requires the vehicle to be broken up or scrapped. Cars with less damage could still be repaired and put back on the road. See the section on retaining the salvage.

5) Once all these hurdles have been overcome your insurers will make a settlement proposal to you.

Their engineer will have looked up the trade publications to value the vehicle, amending these figures for the age, condition and mileage of your car. And his knowledge of the local car market. The final figure he comes up with forms the basis of the settlement value given to you. An excess might have to be deducted along with any outstanding finance.

Your insurer should make it clear to you precisely how much you will receive and explain any adjustments to you. If you pay your premium by Direct Debit, the chances are that any remaining premium will also be deducted from the settlement cheque. We shall come back to the subject of premiums in a moment.

6) When you have accepted the value (some insurers might require your signature to a document called a ‘form of discharge’) you will be sent a cheque.

7) Your insurers then own the remains of your car and, subject to legislation and those ABI codes, can do what they want with it. This will inevitably mean they will sell the salvage.

Car Insurance – Variations Of The Total Loss

HP interest. Where there is outstanding finance on the car, or it is on a lease, the settlement cheque goes to the finance company that owns the car. If there is anything left, you will receive this. If the finance exceeds your vehicles value (and this could happen if your loan has a high % APR or it is leased, you will have to send your cheque for the excess to your insurer, they will pay the value of the claim to the owner and you will be left to settle any outstanding debt with your finance provider afterwards.

Personalised Number Plates. You can usually keep these. And transfer them to your next car. Tell your insurer your intentions and then contact the D.V.L.A. to arrange the transfer. It will take time!

Tax Disc. Your road fund licence is yours, not your insurance companies or their salvage dealer. You should remove the disc, obtain a form from the post office and cash it in.

Premium Refund? Suppose you decide not to buy another car. Can you have a refund of premium? The answer is NO. When your insurer pays out your total loss claim they have discharged their contractual obligation to you. The phrase they might use is that your policy has ‘discharged by performance’ Basically your side of the deal is you pay the full annual premium, their side of the deal is to provide you with the protection specified in the contract. They have kept to their part of the deal. To keep to yours, you must pay the full annual premium.

Some common questions and answers regarding total loss can be found on the FAQ pages.

Car Insurance – Third Party Claims

When an accident happens that involves someone else, you have a ‘third party’ aspect to your claim. This could include another driver, a pedestrian, a cyclist, a passenger, or the owner of a house you hit.

Who is at fault ?

That is not a question you or the other third parties (there could be more than one) have to decide or worry about. Give your insurers all the facts and information that you can. If anyone witnessed the accident obtain their name and address and pass this promptly to your insurers. They will consider all the facts given to them and decide if any further investigation into the circumstances is needed. For example, they might want to ask you some more questions to clarify what you have told them. They will send questionnaires to witnesses. They might arrange for an outside investigator to examine the scene of the accident, take photos, produce a sketch plan. They might arrange for you and the witnesses to be interviewed and more detailed written statements to be taken. THEY ARE COLLECTING EVIDENCE – help them as much as you can

Once they have done all they can they will re-examine all the facts and decide whom they believe to be negligent. In other words they will form a view of who is to blame and proceed with the claim accordingly. In the event of a dispute with the other party and their representatives the matter might have to be decided by a judge in the civil law courts .

Please remember – the civil legal system in this country (and I include Scotland here) is adversarial in nature. You ‘take sides’ and enter a battle with your opponent. Your insurer is on your side and looking after not only their interests but also yours as well. I have come across many instances where you, the customer, take issue with the insurer over what they should be doing regarding the third party claim. I would make the following observations

Your insurers staff are professional,trained, experienced people and have a much better appreciation of how the case should be handled than you do
The terms of their policy mean they can take whatever steps they think appropriate irrespective of what you think

Car Insurance – The Blame Culture

We could write a book here about the ‘common law tort of negligence’. There are plenty of legal text books available which when deciphered tell us that it basically boils down to ‘use your common sense, and that is a good way to form an opinion of who is to blame.

Let’s just qualify that a little. In order to be negligent you must:

1) owe a duty of care – e.g. you owe a duty of care to other road users. But do you owe a duty of care to the man half a mile away on a bus, which gets held up in the resultant traffic jam, not to make him late home from work? No – it is too remote. So your duty of care is to the road users around and about you.

2) you have to cause a breach of that duty.

3) the breach of duty has to flow from the duty of care

4) your breach of your duty of care has to cause damage/injury.

In a recent case the third party had already had his car written off in a previous accident. But he was still driving it when along came our customer and crashed into him. Our customer had been negligent and the first 3 of the above rules were met. But was the damage caused in the crash? There was certainly damage to the third party car but there was no loss in value because the car was only worth scrap value to start with.

Car Insurance Claims – Apportioning Blame

If you blame someone else for an accident, you must have proof that shows ‘on the balance of probability’ that they owed you a duty of care, breached that duty, and that what you claim for arose out of that breach.

First of all , let us assume that another driver is to blame for damaging your car. You have comprehensive cover. What should happen?

Your insurers will deal with the damage to your car under the terms and conditions of your policy. They will then want to recover their money from the negligent driver and his insurers.

You will now find out that a comprehensive policy is anything but comprehensive. You will probably have to pay an excess. This applies even though you were not at fault. The number of times I have had people say to me: ‘why must I pay my excess it was not my fault’. Your insurer is dealing with the damage to your car UNDER THE TERMS AND CONDITIONS OF YOUR POLICY. At this stage, fault is not a question on their minds. When you purchased your policy you agreed in the contract to meet the first £X of each and every claim for damage to your car. You are contractually obligated to pay the excess. So now that you understand this, no matter how unfair you think it is, please do not waste your insurers time arguing with them about it!

You will have to make telephone calls, that will cost you money. A cost not covered by your so called comprehensive policy. You might need to write letters and post documents to your insurers. Again, that is not covered by your so called comprehensive policy. You will be without your car whilst it is being repaired, or until you receive settlement of a total loss claim. This means, bus fairs, train fairs, taxi fairs or hire car costs. Again, with few exceptions this is not provided for by your comprehensive policy.

Perhaps you have been injured in the accident. At the very least this is all going to cause you lot of hassle, stress and inconvenience!

These are all ‘uninsured losses’. Losses that are not insured by your comprehensive policy. It is when an accident happens that you find out the hard way how important it is to have legal expense insurance or Uninsured Loss Recovery added to your policy!

You are entitled to recovery all these losses from the negligent driver and his insurance company.

Car Insurance Claims – Uninsured Losses

If you followed my advice on buying insurance, you will have legal expense insurance. They will undertake recovery of these losses for you, where you have reasonable prospects of winning – but without a guarantee of success. Some now offer a retrospective type of cover but it is expensive.

If you do not have this extra cover but purchased your policy via an insurance broker, they might agree to recover your excess for you. This was a task all insurance brokers used to undertake for their customers but most will now try and sell you legal expenses insurance. (They get extra commission for doing so)

If you have bought your policy from a direct insurer and did not take out legal expense insurance – tough. You are on your own. You might have a go at uninsured loss recovery yourself – talk to your insurers claims staff as they can ‘pave the way’ for you; or you could approach one of the many firms that have sprung up in recent years who will undertake this for you. Some of these include ‘credit hire’ and ‘credit repair’. This is where you are provided with a car hire on credit or a repair on credit. They will then pursue recover of these losses, and quite often your other uninsured losses, from the third party insurer. If they fail you will eventually have to pay for the hire costs and repair work yourself. But they will usually only undertake work where there is a clear chance of winning.

There are now solicitors who operate on a ‘no win no fee’ basis. They will take a share of your payment when you win your case. If you have no legal protection insurance, a lot of uninsured losses, perhaps an injury and a case where who is to blame that is not very strong, then it might be worth looking at this option. But will then take you on? The higher the risk of losing, the greater the increase in their fees. They will try to gauge at an early stage what the risk of winning the case is. If it is less than 50%, they probably will not want to help you. Remember, that under English Law, the party that loses an action pays all the costs (except for ‘small claims track’ where fixed costs apply). Thus, if you have a good case, why give away part of your compensation to a lawyer or one of the new “After The Event” insurance providers? (You cannot have failed to see their advertisements on television!)

If you find yourself without legal protection insurance and need to have a car to keep you mobile – my recommendation is to try speaking to the third party insurers first. If necessary, tell them you are considering credit hire. All sensible insurer now have deals with hire car companies so that they can provide you with a car, at their expense, for the duration of repairs. If they will not assist you, then you could go to one of the credit hire firms

If you have only third party fire and theft cover, then the damage to your car is also an uninsured loss. Again my recommendation is to talk to the third party insurers. They will probably arrange for your car to be repaired by their approved repairer network at their cost. This is of course provided you have a clear cut case to pursue.

Third Party Losses – The Small Claims Court

There will be a few occasions where you have a very good case to pursue but your opponent won’t play ball with you. What can you do?

If your claim against the third party , including the insured losses, is less than £5000 and there is no injury element or the injury element is very small (say a bruise or two) and worth less than £1000, you could try the small claims track of the County Court.

Where you have legal expense insurance your legal expense insurer will appoint, and pay for a solicitor of their choice to deal with this for you.

In the absence of that, unless you have an insurance company that is willing to fork out more money for a solicitors bill, you will have to do this alone. Some insurers have special deals with solicitors for small claims – the County Court arbitration procedure.

I would not recommend you to instruct a solicitor yourself for this reason: under the small claims procedure, the Court will not award legal costs to the winner. So if you appoint a solicitor, you will have to pay your own legal bill whether you win or lose. But as the intention of the Courts it to let ordinary people obtain justice in an informal procedure there is no need to have a solicitor represent you.

In fact this might even give you a tactical advantage over your opponent if they have a solicitor and you do not. The judge is likely to bend over backwards to help you put your case clearly and fairly. Also you might not have to go that far. Your opponents insurers will always have an eye on the bank balance. It might be cheaper for them to give in to you than fight on. On the other hand, the third party might also feel he has a good case and decide to run a defence all the way to a hearing. But at least you will have had your day in Court. And a chance to convince an independent judge that you are right.

If you want to know more, or you are in this position now, your local county court have leaflets that will help you follow this procedure. You can also obtain more information from the Lord Chancellors web site. There are also some excellent books, written in a friendly style available at your local library. Please check these out, talk to your insurers (they might want to include their outlay) who can probably give you a lot of support, and go for it. Try not to get too stressed up. Plan, prepare and document your case carefully and if you have a good case you should win.

Depending on what happened, it would be worth taking a few photos of the scene of the accident that show your view, the other drivers view and which help to explain your version of what happened. Prepare a sketch with some measurements showing road markings, signs and any identification points. (Please be careful that you don’t cause another accident when running around trying to measure the width of a road. Pace it out and take an approximation if the road is busy – it will usually be enough). If there is a dispute over road markings (e.g. the lane arrows on a road approaching a roundabout) then the sketch with photos will prove to the judge what the road really looked like and prove your point. If there is no dispute then this sketch and photos will help the judge understand what happened.

If there were witnesses, try and obtain a detailed written statement as to what they saw. Try and exclude opinions and hearsay. You just want them to comment on the facts, not who they thought was to blame.

Make sure you have estimates, receipts invoices for the amount of money you are claiming. Don’t forget to add in your postage, incidental losses and interest.


UK Motor Insurance – Policy Exclusions

There must always be exclusions in any car insurance policy. No policy can cover every possible event that might arise so insurers put exclusions into a policy to limit their exposure to the risks being run so that they can measure and quantify the risks they are accepting.

The exclusions at the end of the policy will apply to all sections of the policy. Again, the order and wording will vary from one policy to another.

The following list is typical of the exclusions you might find in your policy.

The first one excludes any driver not covered by the policy. This is a ‘belt and braces’ job. Your certificate of insurance and your schedule tell you who can drive the car. This exclusions tells you that no one else can drive the car and your claim will not be met except: when the car is stolen being used by a motor trader or where you did not know the driver was not licensed to drive a car

The next batch of exclusions are standard to all property types of policy. These are the nuclear or radioactivity exclusion; the war risks exclusion and so on. Such risks are the responsibility of government and not the insurance industry.

Finally there is a geographical exclusion to ensure you only use your car in those parts of the world your insurers are prepared to cover you.

Policy Exclusions – Policy Excess

Most policies now carry a compulsory excess and you might have volunteered for a higher excess to save some premium. YOU MUST PAY THIS NO MATTER WHO IS TO BLAME FOR THE ACCIDENT, LOSS OR DAMAGE. Hardly a day goes by in a claims office but there is a telephone call from an irate customer saying, ‘why do I have to pay an excess when it was the other drivers fault?’

Policy Exclusions – Loss of Use

Another likely exclusion in your car insurance policy is ‘loss of use’. This section of the policy does not provide you with any means of alternative transport.

Some insurers have a network of approved repairers who will supply you with a courtesy car if one should be available. A few insurers have a hire car scheme added to their policy whereby they will book a car for you from their chosen hire car company. Most do not have either of these things.

Most insurers offer a hire car extension to their comprehensive policies. The extension is expensive and the policy cover is quite limited. You must decide if you need to buy it. It is not an essential ‘add on’ for everyone. Ask yourself these questions:

If my car was off the road would I still be able to :
– get to work (by bus, train, cycle, walk)?
– take the children/grandchildren to school?
– go shopping
– go on holiday?
– pursue my social interests, hobbies, sports etc?
If you could cope without a car for a few days, you do not need to buy this cover. If you can’t then you should check that you have this cover.

Remember, if an accident is your fault, or your car is stolen, you won’t be able to recover any hire car costs from another person. You won’t be able to go and see a ‘credit hire’ firm. You can’t rely upon the prospect of a courtesy car from the garage. So this extra cover becomes valuable to you.

Equally, if you do not want to use the recommended repairer of your insurance company, or your car is a total loss, your hire car cover will come to the rescue. Let us look at what you might expect from a typical policy.

You can only hire a car if yours if off the road for more than 2 days, but the maximum hire period is 14 days. If you need it for more than this you will have to pay the hire firm yourself.

You can’t have a hire car for a windscreen or glass only claim.

There is usually a delivery maximum so if you live out in the sticks and the hire firm is some distance away from you, expect an additional charge if you arrange them to deliver it to you. Can you get to the local depot yourself?

Your own motor policy will cover the hire car for comprehensive benefits. That helps your insurer to keep down the cost of the hire car cover but if you have an accident in it, the claim will be on your policy.

The car can only be hired from the date your car goes in for repair if the damage to your car is such that it is still safe and legal to drive. If not, you can have the car from the date of the accident.

Policies might impose a maximum period of hire, such as 14 days. If your car is repaired prior to this date, you must return the hire car as soon as you have your car back.

The car supplied is likely to be a small, manual gearbox vehicle no more than a year or two old. If you need something a bit bigger you might have to pay extra. If you need an automatic efforts will be made to locate one for you within the vehicle groups specified in the cover. The hire car will usually come supplied with a tank full of fuel. You must return it with a full tank of fuel. If you don’t you will be charged by the hire firm for a fill up. And they charge a very high price per litre!

Some hire firms will want to collect your credit card number, if you have one, against the possibility of having to fill up your car or bumping it whilst out and about.

Finally the cover under this section only applies to the UK.

Also make sure you know what your excess is, and remember that young or inexperienced drivers have additional excesses to pay. It should be clearly shown in your policy book or schedule.

There have been many heated discussions by telephone with people who did not know what their excess was or that they had to pay this in the event of a claim, irrespective of blame. The reason you have to pay this first is because you have entered into a legal contract with your insurers in which you have agreed to pay the initial amount of each and every claim.

So you are not insured for the amount of your excess and furthermore, it is the first layer of the financial loss that has been incurred. If you are not at fault for an accident, you have the right to claim it back. See the chapter dealing with Third Party Claims for more about ‘uninsured losses’

Policy Exclusions – Fair Wear & Tear

Obviously your insurer does not want to pay for the normal maintenance, servicing or wear and tear to your car. So suppose your accident dented panel is rusted through, your paint work is faded or you damaged exhaust pipe was near the end of its life anyway. This is the exclusion your insurer will rely upon when getting your car repaired. Your insurer will tell the garage to charge you for ‘betterment’ or a ‘contribution’.

When the garage fit new parts to replace parts worn out or rusted, you are having the car improved. That is contrary to the principle of ‘indemnity’ and you will be asked to pay the value of the improvement. A good quality insurer will nowadays only ask this for parts you normally expect to replace during the life time of the car, e.g. tyres, battery, exhaust and so on.

Standards vary from one insurer to another. You should expect a good insurer to:

– tell you in writing what you are being asked to pay, in advance, and why
– be prepared to discuss and negotiate your share of the repair cost, if any (but don’t you be unreasonable either!!)
– only charge for parts replaced you would normally expect to replace during the life of the car

Policy Exclusions – Mechanical & Electrical Faults

The next exclusion is for mechanical or electrical faults. These faults are a matter of maintenance, or lack of it, and are not claim-able. It is not the intention of a motor policy to protect you from the cost of looking after your car. You can buy ‘extended warranties’ when you purchase a car. It is a separate area of insurance.

Similarly, cuts, punctures and bursts to your tyres are not covered unless it was the accident that caused the damage to the tyre. So if you have a puncture, which leads to an accident, the damage to your car will be repaired but you will have to buy a new tyre yourself.

Policy Exclusions – Deception

The next exclusion deals with deception. If you are tricked into parting with your car to a thief then you can’t claim. For example, suppose you are selling your car and the buyer gives you a defective cheque. The moral of this is’ for goodness sake, be careful when selling your car!’

Similar advice applies when buying a car. There is a ‘confidence trick’ that sells you a car for cash (a stolen car) then two or three days later, the ‘seller’ returns and steals the car back. They have the money, the car and what have you got? You did not obtain good ‘title’ to the car so had no ‘insurable interest’ in it. You can’t claim on your policy, so be careful.

There are several services available to the general public that do a check on the history of a car. They will tell you if it has been reported stolen or if it has the subject of a total insurance loss (a write-off). It’s a small price to pay for peace of mind.

Policy Exclusions – Depreciation

When your car is returned to you after repair, it should be as good as it was before the claim event happened. But if you tried to sell it and the mere fact it has been accident damaged is known to the potential buyer, you might not get the value you would have if the car was not the subject of accident damage.

This is more of a problem with higher value upmarket models. It has never been the intention of insurers to pay for a reduction in the value of a car that has been repaired properly following an accident. As an insurer was forced to pay out a few years ago on this very point, insurers now have this exclusion in the motor policy to make the position clear. They will not pay.

Policy Exclusions – Replacement Cars

Most but by no means all motor insurers have a replacement car clause in their loss/damage section. Usually they will supply you with a new car if yours is damaged to an extent of 50% or 60% of its value, or if is stolen. You must have owned the car from new, with no previous registered keepers, and it must be less than 12 months old when the claim event happens. A new car will only be supplied if the same model and specification is available.

This is a brilliant clause for all who own a new car and for the insurers as well. If you are thinking of buying a new car, check out your policy carefully to make sure it has this clause. If not find another insurer. Many new cars these days are sold with ‘free’ insurance. Check out carefully if it provides the cover you require. You might be better of with your current insurer, paying a premium.

I really do not understand those insurers who fail to put it in their policy. It gives the insured a valuable benefit – those that don’t have it lose sales – and the insurer can often make savings on claims. Owing to the purchasing power of motor insurers and their connections in the motor trade, they can usually buy new cars for a lot less than you or I. So it is sometimes cheaper for them to supply a new car than to pay you a fair ‘market value’ on a car just a few weeks old. Outstanding finance is not usually a problem. The loan company will substitute the new car on the agreement for the old car.

Policy Exclusions – Audio and Electronic Equipment

This part of the loss/damage section varies quite a lot from one insurer to another. Some will pay out unlimited amounts for your audio equipment, others impose limits. Some impose limits if you do not use the insurers chosen supplier. Over the last 10 years or so this type of equipment has become very sophisticated. 10 years ago the best you had was a stereo radio/ cassette player and a couple of speakers, or an ‘8 track’. Now, the radio cassette is the bottom end of the market, feeding multiple loudspeakers. Then there is CD players, CD auto changers amplifiers, loudspeakers, and of course mobile phones and GPS navigation systems.

As with windscreen claims, insurers prefer to use specialist suppliers who stock large supplies of all the latest gear and charge insurers a lot less than you or I pay for it. Indeed, where audio equipment is damaged in an accident, the insurers will delete it from the repair estimate and arrange for specialist suppliers to fit it after other repairs have been completed. It saves them money which in turn helps to keep all our premiums down.

If you have special, non standard equipment fitted to your car, check that your policy gives you enough protection!

Policy Exclusions – Personal Effects

A comprehensive policy will usually provide some limited cover for your personal possessions. This cover might have its own special section in your policy.

Important points to watch out for are:
Look for the exclusions in the ‘small print’. You won’t be able to claim for money or valuables. It is not the intention of a motor policy to cover valuable items in your car. You can obtain cover under your household contents policy.

There is usually a limit of £100 or £150. This has not changed for many years! So if you have more personal effects than this in your car, your policy limit will apply and you will receive the limit. From where I sit, it is amazing how many people have just about £100 worth of personal effects in their car all the time!!

It is not ‘new for old’ cover. Insurers can deduct for fair wear and tear. If you have a tatty worn out coat you can’t expect to be paid the cost of a new one. You would be getting better than you had before and that is contrary to the principles of insurance. Again from where I sit, nearly everyone who claims have new or almost new personal possessions. And of course, no one keeps receipts to prove that.

Many insurers now apply your excess to this part of the policy. So if you have just had your personal effects stolen and there is no other claim for your car, forget it. Don’t bother to report it to your motor insurer. If you have adequate cover on your household contents claim on that instead.

Also, don’t try and claim for the same loss on both policies without telling them you are doing so. You cannot be paid out by two insurers for the same loss in such a way as to make a profit. There are sophisticated computer database’s that insurers subscribe to for the very purpose of catching people who try this sort of fraud.

Buying Car Insurance – Your Obligations

Yet more ‘small print’. This time it is setting out the rules that you must obey to keep to your side of the deal. They tell you that:

You must look after your property properly. You can’t expect your insurer to bail you out if you don’t.

You must pay the premium when asked for it. Your side of the financial transaction. If you pay by instalments and make a claim, you must pay off the remaining instalments for the rest of the year.

You must report accidents promptly. It is very important that your insurers have the chance to investigate whilst evidence is still ‘fresh’. Changes to the civil law took place in April 1999 with the ‘Woolf Reforms’ and these require insurers to complete investigations very promptly.

Even if your car has not been damaged, you must report the accident. If nothing comes of it, your claim file will be closed without affecting your no claims bonus. So many times car drivers think they can get away with it themselves only to end up with a nasty shock. There are many sharks out there waiting to rip off the insurance industry and you are playing into their hands. That is bad news for you, not your insurers, as your premium (and everyone else’s) will go up. So please don’t bury your head in the sand, report any accident no matter how trivial you think it is to your insurers immediately.

Remember, when it comes to a third party claim, your insurer is on your side. Your insurer makes the decision on how to pay your claim. For example, by repairing your car.

If there is outstanding finance on the car then your insurer must pay off this debt first when your car is stolen or written off.

You must not pay any third party claim or make any admissions of liability. That is quite difficult to do, I’ve been there. Accidents put you into a state of shock. So you can’t think clearly. But consider this, any comments you make might put your insurers in the position of having to pay the other drivers claim when it wasn’t your fault. And that might hit your no claims bonus! It is difficult for them to wriggle out if you say ‘I’m sorry’. And you would be surprised how much other people will twist around what you say to their advantage.

Your insurers have the right to stand in your shoes for the purposes of civil court action. This is called ‘subrogation’ It means they can defend any claim made against you, and use your name in the court proceedings or vice versa – recover from someone else in your name.

Don’t worry about it, they will usually talk to you about what they are doing. After all, you are their ‘star witness’. But very occasionally I have found some arrogant people who think they know better than the claims professional dealing with the matter on their behalf. Then the condition has to be called into effect. A recent example is a lady who drove out of a side road, across give way lines and collided with a car on the main road. She was adamant it was not there when she moved off – chances are she did not look properly! She insisted on going to court despite the advice of her insurers who wanted to settle the third party claim. Owing to her agressive attitude, they did not invoke this condition but let her go ahead on her own. She lost!

Sometimes insurers are forced by legislation to pay claims that are not covered by the policy. The next condition in the policy allows for this. It will only arise where you have failed to keep to your side of the policy terms and conditions or lied to your insurers when you took the policy out. For example you allow someone to drive your car who is not covered by your policy. They cause an accident and owing to the existence of your policy, legislation forces your insurer to pay the third party claim. They can then ask you to reimburse them.

Then we have cancellation clauses. These set out the rules by which you can cancel your policy and how your insurers can cancel it. You can only ask for part of your premium back if you have not made a claim. You must always send back your Certificate of Insurance. If you don’t then your insurer might well remain on risk for third party claims and will not cancel your policy.

Disputes of amounts to be claimed form the subject of the next condition. Usually customers take advantage of the complaints procedure rather than an arbitration service. You must make your car available at any reasonable time for your insurer to inspect it, even if you have not made a claim. For example they might be investigating a possible fraud and want to check out your car. By and large, the only time they will inspect your car is after an accident has arisen or after it is recovered following a theft.

Finally, there is the fraud condition. If you make a fraudulent claim, your policy will be of no effect, and they keep the premium too! So don’t do it.

UK Motor Insurance – Policy Clauses

The clauses within your car insurance policy document are the place where the insurer typically limits or lessens their liability within your policy. You should read them carefully in order to understand what is covered and what might not be.

Policy Clauses – Trailers & Caravans 

The purpose of this section is to cover you for your liabilities when towing a trailer or caravan. In other words it is ‘third party only ‘ cover irrespective of the cover you have on your car.

Caravans are usually provided for on this basis. So if, through your negligence, your caravan comes adrift from your car and causes other damage or injury this policy will protect you for those sums of money you have to pay as compensation.

Needless to say, the type of cover here varies from one insurer to the other. Some will give you ‘comprehensive’ cover for your small, single axle trailer for a small extra premium. Make sure your trailer meets the specification in this area of cover.

Policy Clauses – Emergency Treatment Fees

Under current UK legislation, you must pay fees to the first medical practitioner to give you treatment in an accident. This is incorporated in the Road Traffic Act.

Some people call this a charge for an ambulance. Strictly speaking this is not correct but in practice it is usually the ambulance paramedics that provide the medical treatment and the account comes to you from the N H S Trust that supplied the ambulance and its crew.

YOU MUST PAY THIS BY LAW irrespective of who was to blame for the accident. Your insurer will meet the cost under this section. Just send the account into them and they will pay it directly to the N H S trust. Or pay it yourself and ask your insurer to reimburse you.

Occasionally in a busy insurance office, the claims staff can overlook the account if you have sent it in with other papers. Indeed you might receive a reminder from the N H S trust. Tell the N H S Trust who your insurers are and telephone your claims office. Be firm but please don’t be angry.

Payment of this account in itself does not affect your no claims bonus. It is not regarded as a claim. So, in the unlikely event your insurers were to pay this and nothing else your bonus remains intact. But in an accident where someone is injured, it is unlikely there is no other types of claim to be met.

Technically, if someone else is to blame for the accident you can send this account on to their insurer but you are just asking for unnecessary hassle. My advice is, don’t bother. It makes no difference to you either way.

Owing to recent changes in the law, hospitals now also charge insurers for treatment given to victims of accidents, with certain limits applied. These are paid to the hospital in cases where you have been negligent and someone else has had treatment for the injury you caused. THIS HAS PUSHED UP THE COST OF CLAIMS SETTLEMENTS AND CONSEQUENTLY YOUR PREMIUMS.

Some insurance professionals consider that this is a further case of “stealth tax” taxation by the Government.

Policy Clauses – Personal Injury and Medical Expenses

This is limited personal accident insurance and is very similar to those free certificates you sometime now receive with the ‘junk mail’. It is very simple. If you, or your partner are killed in an accident, or lose a limb or an eye whilst in your car, you (or your estate) will receive a lump sum, irrespective of who is to blame for the accident.

The amount you receive is specified in the policy wording. There is ‘small print’ relating to self inflicted injury, drugs and drink and so on. If you need this sort of protection then I suggest you look into a proper personal accident policy or find out about a suitable life assurance product.

Claims staff sometimes forget about this part of the policy. So if you are entitled to claim on this section, remind them!

Some comprehensive policies provide for limited private medical expenses. Very few claim, but then the amounts covered are so small that you would not be able to buy much treatment for the cash available. If someone else was responsible for the accident then you could obtain private medical treatment and submit this as part of your uninsured losses.

Policy Clauses – No Claims Discount

Often called a no claims bonus, the NCD is very popular. It has been around for decades and some people can get very upset about it. Indeed, there can be a lot of money at stake.

All insurers have scales which make your premium cheaper the longer you go without making a claim, until you reach the maximum on the scale. This is often 65% or sometimes 70%. Every insurance company scale is slightly different. The bottom line is: what is the premium I have to pay? A 65% discount with one insurer might work out a better bet than a 70% with another insurer.

A few years ago, free ‘protection’ was introduced but if you want to protect your bonus now you have to pay an extra premium. Whilst the scales and the details of the schemes might vary from one insurer to another, the claims aspect is essentially the same. It is a No Claims discount, NOT a no blame discount.

Claims staff will ‘allow’ your bonus, that is, keep it intact, if they make a full recovery of their outlay. It is as simple as that.

So if your car is stolen and no money is recovered from the culprits, tough! You will lose your discount – you have made a claim and received the benefit of your policy.

If your car is damaged by a ‘hit and run’ driver, tough!

If the accident was partly or entirely your fault, tough. Your insurers will have paid out and protected your interests but you lose your bonus.

Subject to any protection you have on your bonus and how this works on your policy, one claim will usually step back your bonus rather than reduce it to nil. But make more claims and……….you’ve guessed the rest.

One final point to bear in mind, when your renewal comes up and you receive the bad news about your renewal premium, most insurers will allow you to repay the claim if this is a cheaper option.

Policy Clauses – Driving Abroad 

This part of your policy tells you what cover you have when you go abroad. Usually, if you are going to the European countries listed, you do not require a ‘green card’ and you will have the full policy cover without additional premium.

For other countries, a Green Card is still required and you will need to pay additional premium. Before setting off, speak to your insurer and make sure you are covered.


UK Motor Insurance – Policy Add-Ons

Most UK car insurance products have a number of optional extras that can be purchased with the policy, We list below the most common ones :-

Car Insurance Add-Ons – Protected NCD

We consider this to be an essential. No matter how careful you are, no matter how good a driver you think you are, the chances are that one day you will have to make a claim that will affect your entitlement to a no claims bonus.

Here’s just a few examples :

  • your car could be stolen or broken into
  • your car is hit whilst parked, by a ‘hit and run’ driver
  • you have an accident that was not your fault but your insurer fails to recover, for any number of reasons. For example, the other driver gives you false information and all attempts to trace him fail
  • you have a momentary lapse in concentration and have an accident. Yes it happens to the best of us, even those who have passed the advanced driving tests – indeed they can be the most difficult sometimes as they can’t accept they did something wrong!. In fact we’ve seen a claim form where the driver has said ‘..I hit the car in front but it was not my fault because I am an advanced driver with the Institute of Advanced Motorists’

NCD protection lets you get away with one of these claims. Without it a serious financial penalty will be encountered at the time of your next renewal. And the renewal after that.

Car Insurance Add-Ons – Legal Protection

ULR stand for Uninsured Loss Recovery. Even with a so called fully comprehensive policy you will suffer financial losses that are not covered by your policy. Here is a list of some of the more common losses you might suffer, but there are plenty more. Any loss you suffer not covered by your policy is called an uninsured loss, such as :

– your policy excess (or damage to your car if not comprehensive cover)
– postage and telephone calls
– alternative transport – e.g. bus/train fairs hire car
– injury
– loss of income
– inconvenience

For legal reasons, if you buy this cover it will be supplied by a different insurer, or different division of your insurer to your main motor policy cover. In the old days nearly everyone bought their insurance cover through an insurance broker. Your broker would undertake recovery of these losses for you or refer you to a solicitor.

Since the advent of the legal expense insurer, this has become a boom industry with all sorts of firms springing up to cash in. A legal expense insurer will provide the legal costs of recovering your uninsured losses. Some will do it in house with their own staff, others have a panel of solicitors who will undertake the work. Some insurers provide a free legal help line attached to this cover. It will give you 24 hour telephone advise on any legal matter to do with your car.

The cost of this cover is actually very cheap. The only trouble is that where you buy it off a broker, they take commission which pushes up the cost to you. But it is another of those essentials in my view.

I’ve lost count of the number of times that people involved in an accident have found out the hard way how foolish they were in not taking up this cover when they had the chance.

To cater for this, the legal protection industry is now supplying a product you can buy, at a price, after the event. Whether they have their own in-house teams of staff or use out-sourced solicitors they will only attempt recovery where there is clear evidence that someone else is at fault. But it can take time. You have to be patient. It can take several weeks, if not months, to prize money out of another insurer.

Where there is an injury, you are looking at months, perhaps years before you receive anything. This is mainly due to the length of time it takes nature to heal injuries. If necessary, your legal expense insurer will pay for your case to go through the civil law courts. But there is a limit to how much they will pay in legal costs. This is the sum insured. Have a look and see what this is on your policy. You will find that you can get a lot of legal help for the amount involved. There are several conditions and exclusions attached to this add on policy. Surprise Surprise.

Some insurers provide a free legal help line attached to this cover. It will give you 24 hour telephone advise on any legal matter to do with your car.

Car Insurance Add-Ons – Hire Cars

Some insurers have a network of approved repairers who will supply you with a courtesy car if one should be available. A few insurers have a hire car scheme added to their policy whereby they will book a car for you from their chosen hire car company. Plenty of others don’t have either of these things.

Hire car extensions are expensive and the policy cover is quite limited. You must decide if you need to buy it. It is not, in my view, an essential ‘add on’ for everyone. Ask yourself these questions: If my car was off the road would I still be able to

– get to work (by bus, train, cycle, walk)?
– take the children/grandchildren to school?
– go shopping
– go on holiday?
– pursue my social interests, hobbies, sports etc?

If you could cope without a car for a few days, you do not need to buy this cover. If you can’t then you should check that you have this cover.

Remember, if an accident is your fault, or your car is stolen, you won’t be able to recover any hire car costs from another person. You won’t be able to go and see a ‘credit hire’ firm. You can’t rely upon the prospect of a courtesy car from the garage. So this extra cover becomes valuable to you.

Equally, if you do not want to use the recommended repairer of your insurance company, or your car is a total loss, your hire car cover will come to the rescue. Let us look at what you might expect from a typical policy.

You can only hire a car if yours if off the road for more than 2 days, but the maximum hire period is 14 days. If you need it for more than this you will have to pay the hire firm yourself.

You can’t have a hire car for a windscreen or glass only claim

There is usually a delivery maximum so if you live out in the sticks and the hire firm is some distance away from you, expect an additional charge if you arrange them to deliver it to you. Can you get to the local depot yourself?

Your own motor policy will cover the hire car for comprehensive benefits. That helps your insurer to keep down the cost of the hire car cover but if you have an accident in it, the claim will be on your policy.

The car can only be hired from the date your car goes in for repair if the damage to your car is such that it is still safe and legal to drive. If not, you can have the car from the date of the accident.

Policies might impose a maximum period of hire, such as 14 days. If your car is repaired prior to this date, you must return the hire car as soon as you have your car back.

The car supplied is likely to be a small, manual gearbox vehicle no more than a year or two old. If you need something a bit bigger you might have to pay extra. If you need an automatic efforts will be made to locate one for you within the vehicle groups specified in the cover. The hire car will usually come supplied with a tank full of fuel. You must return it with a full tank of fuel. If you don’t you will be charged by the hire firm for a fill up. And they charge a very high price per litre!

Some hire firms will want to collect your credit card number, if you have one, against the possibility of having to fill up your car or bumping it whilst out and about.

Finally the cover under this section only applies to the UK

Car Insurance Add-Ons – Breakdown Recovery

Under a basic comprehensive policy, your insurer will pay for recovery to the nearest competent repairer. You can add to that and have full motoring assistance on your policy. If you have separate membership of a motoring club for breakdowns, consider this as worth looking at.

The cover provided might be adequate and cheaper than that which you can buy separately. But read through the ‘small print’ so make sure you have enough cover for your needs. You will not receive a membership card or a membership number.

I strongly recommend calling the emergency breakdown number a couple of weeks after going on cover to make sure they have your details. Whilst these are sometimes passed on by electronic means, I also know that they are sometimes sent on tapes and diskettes in the post. Errors in computer data have arisen and caused difficulty at the time of a breakdown or accident. The last thing you want. So check it out first!


UK Car Insurance – Policy Types

UK car insurance policies start as one of the following:

Third Party
Third Party Fire & Theft
Fully Comprehensive

On top of that there are various different options available to you, such as legal expenses insurance (or uninsured loss recovery), breakdown cover, protected no claims bonus, car hire, personal accident and so on.

Price comparison websites such as will get you a huge selection of quotes from different insurance companies whilst only asking you to fill in your details once. They make buying insurance a very simple, relatively painless process, thank goodness for that.

Third Party Car Insurance

Third party insurance gives you protection for any claim made against you, your driver (if someone else was driving) or the person responsible for your car. You must by law (the Road Traffic Act(s) ) have a certain minimum amount of cover. All policies in the UK giving ‘third party cover’ or more, will provide greater protection than the law requires. Whether you just have ‘third party only’; ‘third party fire and theft’ or ‘comprehensive’ you will have this section.

Should you be to blame for causing an accident your insurer will pay for all sums of money that you must pay by law to those victims you have injured or killed. Or whose property you have damaged and so on. This includes any legal costs you have to pay to the victims solicitors and any legal costs your own insurers incur looking after your interests.

In practice what happens is that your insurer will deal with the third party claim and you should not have to worry about it.

This whole question of third party cover becomes very confusing when you are a passenger in your own car and it is being driven by someone else. Provided that the other person is allowed to drive it, then it is the driver who is protected by this section and not you. Your policy wording will list those who are insured to drive the vehicle, for example, named drivers, passengers, employer. Thus if you, as the passenger, were to be injured owing to the negligent driving of the person driving your car, you have the legal right to claim compensation from that person. So your policy here would ‘indemnify’ the driver, not you. You would end up with the money. Unfortunately you cannot claim for damage to your car under this section.

If a thief takes your car and causes an accident (an all too often occurrence!) this section of the policy will protect you, as owner of the car, against any claim for damage or injury caused by the thief. This might seem unfair – after all it was the thief who was to blame! Remember, we are concerned here with the law. The intention is to make sure that innocent victims of otherwise uninsured drivers who are injured or who have some sort of damage caused by an uninsured driver’s negligence should be compensated. How many thieves have the money to pay for that? So it is possible, in practical terms, for the victim to make a claim on your policy. Claims can be very complicated where a thief causes damage or injury.

Third Party Fire & Theft Car Insurance

A ‘third party fire and theft’ policy provides some further protection compared to basic Third Party Insurance. Where your car is stolen, or damaged by theft, or attempted theft, or damaged by fire, then you can pursue a claim. Thus, if someone tried to break into your car and damaged the locks and scratched the door you could claim. But you would of course have to report the attempted theft to the police.

Many insurers now impose an excess for theft claims, often £100. This means you will have to pay the first £100 of each and every claim. In effect you insured yourself for the first £100 of every theft loss. Some insurers will not charge this where your car was in a locked garage.

You have to pay your excess whether the thief is caught or not. Although some people think this is unfair, by sharing the cost of the loss with your insurers, they hope to make you more responsible for your possessions. It is amazing how irresponsible some people are with their possessions. It also helps to reduce slightly their claims outlay and thus helps to keep premiums down.

Fully Comprehensive Car Insurance

With ‘fully comp’ cover, you have all the benefits of third party insurance plus it provides you with ‘all risks’ type of cover for your car. That means if the car is damaged by any cause whatsoever, you can claim, except for those ‘small print’ exclusions. More about those later.

So you know you can claim for any damage to your car caused in an accident.

But did you know you can also claim for damage caused by such things as

– paint spray that wafted over from a careless paint sprayer/decorator working on next doors house;
– paint stripper poured over your car by the local thugs;
– pollution raining down on your car from the local factory (provided you can actually prove that they did this);
– things falling off lorries and hitting your car;
– damaged caused to your tyres and suspension when you drove over a high kerb and so on.

So you can see, if your car is damaged by some fortuitous event, subject to the exclusions, you can claim. Whether you would want to claim, and thus lose your precious no claims discount is discussed in another chapter.

UK Motor Insurance Information

Car Insurance Information

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All motor insurance policies are not the same. In the past the cover you could get from one insurance provider was much the same as any other. Today there are wide variations available in the market. Companies compete to try and obtain a slight edge on their competitors, on price, quality, extent of cover and so on.

If you ever have any queries about your cover, get in touch with your insurer or your broker. Make sure that you obtain the name of the person you speak to and immediately after talking, write down a note of the conversation and the date that the conversation took place. All you need is the ‘bullet points’. That way, if there is ever a dispute you have good evidence to back up what you said.

Follow the information links on the right to find a whole library of information on the subject of car insurance.