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.