The Insider s Guide volume V Your Guide to Making Your Own Vehicle Damage Claim Your Guide to Making Your Own Vehicle Damage Claim Liam Crowley
1 Your Guide to Making Your Own Vehicle Damage Claim By Liam Crowley Solicitor Contents Introduction... 2 Some General Principles... 4 What do I do if the accident wasn t my fault but the other guy s insurers won t pay out?... 6 What if the insurance company say they will not pay for repairs to the car as it is uneconomical?... 7 My car had valuable modifications made but the insurance company are only offering to pay for a replacement car without these specifications.... 7 The guy who crashed into me drove away before I could get any details!... 7 The guy who crashed into me was driving a foreign registered car... 8 The insurance company is insisting that I use their mechanic... 8 The insurance company has made an offer to settle my claim which is far below the cost of putting things right!... 8 The insurance company has made an offer but has said they need an answer by close of business today!... 9 I bought my car under a hire purchase agreement and the car is a write off. The insurance company is only offering me the market value of the car but the remaining balance on the hire-purchase agreement is far higher.... 9
2 Liam Crowley Solicitor Introduction Hi, This guide is designed to help you to navigate through the maze that is the insurance business, or those aspects of it that stand between you and getting paid what you re owed in your vehicle damage claim after you ve had a road traffic accident. When I first thought of writing this someone said to me I wish you every success, but you will have to be more than a lawyer to achieve that: I believe you ll have to be an actuary, an absolute forensic expert in the English language, and a master at dealing with big business Of all the situations where the guidance of a solicitor is essential, dealing with insurance companies is to my mind the most critical. Come to think of it, he had a point But there are things you can do for yourself and this guide is designed to help you in doing so. However, bear in mind the limitations inherent in a guide like this: Firstly, this guide is designed for circumstances where liability is not in issue, what that means is that the other party is clearly at fault for the damage suffered by you and is openly admitting this; Secondly, this is a brief guide designed to tell you the basics in plain English, so there s a limit to what I can cover here, and
3 Thirdly, everything in this guide is general information only. Nothing in this guide is legal advice. If you want legal advice, consult a qualified professional. I hope you find it useful. All the best, Liam 4 th June 2013
4 Some General Principles If you have been in a car accident (or crash) which was not caused by you then you may be entitled to be compensated by the person who caused the accident for any damage you sufferred. The damages you may have suffered generally fall into two broad categories: personal injuries and property damage. This guide only applies to property damage where neither you nor anyone else in your vehicle suffered ANY injury. If you or anyone else in your vehicle did suffer any injury you should seek appropriate medical attention without delay and obtain separate legal advice on your particular circumstances. However, if the only damage which you suffered as a result of the accident was property damage to your vehicle, then this guide is intended to help you to ensure that you recover what you are properly entitled to. Please bear in mind that this guide is general information only and is not legal advice. If you require legal advice on any aspect of your particular circumstances, you should consult a solicitor before going any further. In theory the insurance company should put you back in the position you were in before the accident happened i.e. if the repair work costs 2,500.00 to put your car back in the condition it was before the accident, and if you have had to rent a car while it was being repaired which costs 150.00, then the insurance company should reimburse you 2,650.00. However, it s important to remember that you also have a duty to mitigate your losses. This means is that you must avoid incurring unnecessary costs while your car is being repaired. You can t rent a Lamborghini Aventador for six months while you wait for your car to be repaired. Likewise, you can t have your car repaired at an inflated price. The other party s insurance company will only pay out reasonable costs and in most circumstances mechanics are aware what reasonable costs are. It is advisable to have a mechanic itemise the work to be done and the cost of doing same in writing and submit this to the other party s insurance company for approval. You should notify the other party s insurance company of your intention to carry out the repairs before you do so and request them to have their assessor assess the damage
5 before you proceed. This should be done in writing so that if there is any dispute about the matter afterwards you can clearly show that you provided the other party s insurance company with a reasonable opportunity to carry out an assessment. Depending on the value of your vehicle and the nature of the damage it may be worth considering having your own independent assessor assess the damage so that you are in a position to argue your case fully with the insurance company if there is any dispute about the value of the work requiring to be done. Bear in mind also that depending on the value of your vehicle before the accident and the extent of the damage done to it, the vehicle may be beyond economic repair which I deal with below in a bit more detail. In relation to renting a car while your car is being repaired, you should rent a car which is equivalent in size to the car which is being repaired. If you have particular requirements or specifications which you need which might cause the rental value to be increased (i.e. you may need a hitch on the car to tow a trailer for work) then this should be communicated to the insurance company. As a rule of thumb, most insurance companies will consider two or three weeks rental as being reasonable, depending on the extent of the damage caused to your vehicle and how long it might reasonably be expected to repair it. The accident may also have caused your car to depreciate in value and you should also receive compensation for that. As a rule of thumb some insurers will pay 10% of the price of the repairs (exclusive of VAT). However, if the car is less than a year old then this rule of thumb may be ignored and an actual assessment of the value of depreciation may be conducted. If the vehicle is more than four years old insurance companies will resist paying anything towards deprecation. After an accident you should exchange insurance details with the other side. You should also call the local Garda station and report the incident. The Gardaí might decide that the incident is a minor one and that they are therefore not required to attend the scene but they should still provide you with an incident report number and record the accident in the incident report book which is kept at each Garda station. You should also ask for the name and number of the Garda you speak with.
6 Even if you believe that the other party was completely responsible for the accident (and even if he or she admits it at the scene) you should ALWAYS notify your own insurance company of the fact that an accident occurred involving your vehicle. If you are not at fault for the accident you should make it clear to your own insurance company that you are not making any claim on your own insurance policy and you are simply informing them of the accident for noting only. This will ensure that if the other party changes their tune or tries to allege that you have some responsibility for the accident afterwards your own insurance company will be obliged to indemnify you and can t say that you were late in notifying them. What do I do if the accident wasn t my fault but the other guy s insurers won t pay out? This may happen where there are ongoing investigations into who caused the accident. As stated above, you have a duty to mitigate your losses. This means that if you have comprehensive insurance you cannot rely on the fact that the other side won t pay out and continue to rent a car until such time as they do. Instead you must either pay for the repairs yourself or claim off your own insurance, making it clear that you hold the other side responsible. Your insurers should in turn seek to pursue the other party s insurers for the amount that they have paid out to you. Unfortunately, if you do claim off your own policy in these circumstances, this will mean that you will lose your no claims bonus while the claim against the other party remains unresolved. This will affect your premium unless have no claims protection. However, once your insurance company has successfully secured compensation from the other insurance company your no claims bonus should be reinstated and any excess premium you have paid should be refunded to you. Bear in mind that if you claim off your comprehensive policy you will have little control over how hard your own insurance company decides to pursue the other side for the loss. Your insurance company may be willing to settle the claim on an apportionment of blame between both sides at their discretion no matter how strongly you feel on the issue. Therefore, depending on the extent of the damage to your vehicle and the value of your no claims bonus etc, it may be worth considering paying for the
7 work and pursuing the other party yourself where you will have complete control over this process. However, this will almost certainly involve legal costs and you will are unlikely to recover the full amount of these costs from the other side s insurance company. If you don t have comprehensive cover then you will be expected to mitigate your losses as much as possible out of your own pocket (i.e. paying for the repair work to get your car back on the road as soon as possible). What if the insurance company say they will not pay for repairs to the car as it is uneconomical? If the cost of repairing the car is greater than its pre-accident value then the insurance company will most likely refuse to pay for repairs. Instead you will be paid the amount for replacing the car less its scrappage value. You will be expected to take the car to a salvage yard and recover the scrap value yourself. In some case the insurers will advise you of a salvage yard and the amount that they will pay for your car. My car had valuable modifications made but the insurance company are only offering to pay for a replacement car without these specifications. If this is the case you should bring the additional modifications and the cost of installing them to the attention of the insurance company. The general principle is that you are entitled to be put in the position you were in prior to accident. The guy who crashed into me drove away before I could get any details! If this is the case then you should notify your claim to the Motor Insurers Bureau of Ireland (MIBI) (www.mibi.ie). They deal with claims where the responsible driver is uninsured or unidentified. However, the MIBI primarily covers personal injuries and will not always cover property damage. The most recent MIBI agreement (2009) provides for compensation for vehicle or property damage against an unidentified vehicle where there are significant personal injuries arising from the same accident.
8 If you have comprehensive insurance then you should claim through your own insurance and you insurance company will seek to be refunded from the MIBI. The same procedure as outlined above also applies in this case (i.e. your premiums will temporarily increase). It is important to note that where a claim is being made to MIBI for damages to property you must report the accident to the Gardaí within two days of the accident and you must notify the MIBI within 12 months of the claim arising. You must also give the MIBI at least 28 days notice prior to obtaining a judgment which may have to be paid out by the MIBI. If you are successful in bringing your claim against the MIBI it is important to note that there is an excess of 500 which will not be paid. Therefore if your claim is valued at 2,500 you will only receive 2,000. The guy who crashed into me was driving a foreign registered car Again, the MIBI deals with claims from parties involved in accidents caused by foreign registered vehicles. The insurance company is insisting that I use their mechanic Insurance companies can insist that you use one of their own mechanics if the claim is off your own insurance. However, if you are claiming off somebody else s insurance then they cannot force you to use a particular mechanic. But if your own mechanic s costs are expensive they may not be considered reasonable and you will not recover all of the costs. The insurance company has made an offer to settle my claim which is far below the cost of putting things right! Clause 7.15 of the Central Bank s consumer protection code is of interest:
9 7.15 A regulated entity must ensure that any claim settlement offer made to a claimant is fair, taking into account all relevant factors, and represents the regulated entity s best estimate of the claimant s reasonable entitlement under the policy. If you feel that an offer is grossly unfair then you may threaten to complain the insurance company to the Financial Services Ombudsman (www.financialombudsman.ie). In 2012 the Ombudsman reported a total of 4,064 complaints against insurance companies, an 18% increase based on 2011 levels with over a quarter being upheld or partly upheld. 495 such cases were motor insurance complaints. The insurance company has made an offer but has said they need an answer by close of business today! Clause 7.17 of the Central Bank s Consumer Protection Code states that you must be given at least ten business days to accept or reject an offer. Again, if you are put in this position you can threaten to complain the insurance company to the Financial Services Ombudsman. I bought my car under a hire purchase agreement and the car is a write off. The insurance company is only offering me the market value of the car but the remaining balance on the hire-purchase agreement is far higher. This is a complicated situation without a straightforward answer. Under a leasing or hire purchase agreement you are not the owner of the vehicle and you should not settle any claim regarding damage to it without the direct involvement of the leasing or hire purchase company. You may face being left in a situation where the vehicle is destroyed and you still have a liability under the leasing or hire purchase agreement even after the insurance money has been paid. Much will depend on the exact nature of your leasing or hire purchase agreement and on what deal you may be able to conclude with them in the context of an overall settlement. You really need to take specific advice on this
10 based on your personal circumstances, but don t just assume that the insurance will cover it and that you ll be cleared. I hope that you found this guide useful and that it helped you in bringing your property damage claim. However, if you have a question which isn't answered in the guide or if any of the answers which I ve provided is unclear to you, I would love to hear your feedback. Please contact me by telephone on 023 888 0088 or by email at liam@mccarthy.ie