How to claim from your insurer after an accident

When you have an accident or need to make a claim on your motor insurance, it can turn into a very stressful process. So we're here to help...

Claiming through your insurer

When you claim through your insurer, you are bound by the terms and conditions of the contract you have entered into. There are a few exceptions to this, but we will not get into them here.

The contract of insurance is there to indemnify you, this means you should be put back into the same material position you were in prior to the loss occurring. You should be in a no better or worse situation.

The original premise of insurance was to provide 'pecunary compensation' in other word financial monies, for the loss that occurred. Insurer's have now manipulated this under the guise of customer service by offering to repair your car, when what they are actually doing is saving themselves money.

On the one hand you may get your car repaired fantastically well as approved repairers have had to jump through many hoops to attain the British Standard most insurers require. Though you do need to be aware that this standard approves the use of second-hand and non-original parts in the repair of your vehicle.

Using your insurer you are putting them in control of what happens to your car. They often forget the most important person - and that is you.

An insurer will provide indemnity by either repairing your car, providing a cash settlement at the cost of repair (this is not necessarily what it would cost them to repair your car) or dealing with your vehicle as a total loss.

It is very important you read the contract of insurance along with the terms and conditions of that contract prior to making a claim.

You might find clauses you were not aware of. For example, a lower level of glass cover for your windscreen should you have it replaced somewhere other than the insurer's choice of supplier. This can very important on new cars where advanced driver assistance systems (ADAS) are fitted.

Or the insurer may try to add an additional excess should you wish to have your car repaired at your own choice of repairer. You can have your car repaired wherever you wish, but insurers try to restrict this.

If the accident is not your fault, you will have more entitlement than what you would claiming through your own insurer. Your insurer is legally bound under the Financial Service and Markets Act 2000 that it cannot act in conflict to your interest.

Pros

• The insurer generally acts quicker and pays out faster. This is important if you have an accident with someone else and liability is in dispute. They can sort the liability issues later while ensuring your vehicle is either repaired, or you are compensated for the market value.

• The insurer should be advising that they will repair your vehicle up to the market value. You can force them to do this.

• You do have the right to use your own repairer - do not let the insurer tell you otherwise.

• It should be relatively hassle free. But it may be that you want your vehicle to go in to a manufacturer's bodyshop to ensure original parts and the warranty is maintained by being repaired using a manufacturer's repair process.

• Insurers will usually advise that these repairers are too expensive. This is completely incorrect. These repairers are charging the true market rate, where the insurers approved repairers offer discounted rates to insurance firms for volume and fitting non-original parts. 

• Should things go wrong, you have the right to complain and you have rights to arbitration. You can complain to the Financial Ombudsman Service. 

Cons

• Unless you really need to, we would have this as the last alternative. If you have no one else to claim from, use your insurer. If the accident is not your fault, you have a lot more entitlement than what you may get from your insurer.

• Using your insurer you are putting them in control of what happens to your car. They often forget the most important person - and that is you.

• Your insurer will charge you your excess if you have agreed to one. They may charge an increased excess if you want to use your own choice of repairer.

• Your insurer may wish to use second hand parts or non original equipment on your vehicle. By doing this you may invalidate the manufacturer's warranty.

• When you do have your car repaired by the insurer's repairer, it is the repairer not the insurer that guarantees the repair. A lifetime guarantee, or ten year guarantee, then becomes useless if the repairer is no longer in business.

• Your insurer may wish to constructively total loss your vehicle at a very low repair cost. This is due to the salvage contracts they have negotiated.

• It will affect your claims history and your no claims bonus, plus your future premiums, even if you have protected no claims.

• You may find that the insurer does not have your interest at heart. And will put its own commercial interest in front of yours....

The moral of the story?

I recently dealt with a recent case of an aircooled Porsche 911. This car has dramatically gone up in value over the last five years. The customer had the car on an agreed market valuation policy as it was a classic. This means the car is insured for a pre-agreed sum.

Unfortunately the car was going up in value quickly and the value had jumped from £40,000 to £60,000 in a year. He had insured it for £40,000. The owner had an accident that was not his fault and he had the entitlement to claim off the at fault party directly.

His broker advised him to claim through his own insurer, but was then extremely upset to only get £40,000 when he believed it was worth £60,000.

He complained to the Financial Ombudsman, who found against him. They were happy his insurer had met their obligations by paying out the agreed market value. Had he claimed via a claims management company, a solicitor or directly through the at fault insurer, he could have successfully claimed the £60,000. 

The moral of the story? Make sure you carry out your own research. And take advice from more than one reputable qualified source...

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