I suppose I had better nail my colours to the mast, before I make a comment here. I was a police traffic officer and collision investigator for 30 years I am also a qualified vehicle engineer. After my police service, I spent over 10 years in the insurance fraud industry. Before I retired completely last year, I was recognised for many years as an expert witness in both the criminal and civil court systems.
I will start by saying that insurance companies are in business to provide cover to the paying customer based upon the notified risk. If the risk has been properly declared and the terms of the contract are honourable, then they will happily indemnify the insured in accordance with the terms of that contract.
Unfortunately, the 'claims culture' fuelled by certain sections of society has placed a huge burden upon insurers and the thousands of honest people who pay their premiums year in year out. Policy premiums in all areas of insurance cover have increased massively (and will continue to do so) to offset the cost of fraudulent and/or exaggerated claims.
This behaviour has created a whole sub industry based upon false, exaggerated or fraudulent insurance claims. It is not just confined to the motor insurance section. You will probably have read recently that attention has been turned to those who are making false claims on holiday insurance.
The rewards for those promoting and organising such claims are significant, but the risk to them is relatively low. It the vast majority of cases, it is the claimant who is taking the risk.
As far as motor insurance cover goes, once a policy is issued and until such a time as it expires or is otherwise revoked, the insurers have to honour the terms of the policy in respect of any genuine third party claims. However, this does not always extend to the policyholder or loss to the insured vehicle.
If the insurance company believes (on a balance of probability) that the terms of the original policy were not met by the insured, then it is highly likely that they will refuse to pay out for any losses relating to the policyholder or the insured vehicle. They may also seek to recover losses paid out to any third party claimant.
General insurance policy terms are that the insured vehicle should be maintained in a roadworthy condition at all times during the term of the insurance and that it was being used legally at the time of the claim.
This means that the driver is authorised and licensed to use the vehicle. The vehicle must be roadworthy, have a valid MOT and have a current Vehicle Excise License.
It should be noted that an MOT is not a certificate to prove that the vehicle is roadworthy.
Road traffic legislation is complicated and it is based upon EU directives that are underpinned by the national laws of each member state. In the UK, this is largely covered by the Road Traffic Act, The Road vehicles (Construction and Use) Regulations and the Road Vehicles (Lighting Regulations). The Highway Code is a road users guide to good behaviour it is not law. However, courts often refer to the Highway Code when applying the burden of responsibility that might apply to a particular road user.
The issue of an insurance policy will also assume that you have been truthful with the insurance company when you took the policy out. This burden lies solely with the person taking out the policy. You should always remember that the contract of insurance is between the policyholder and the insurance company.
Any misleading declaration, omission, or a failure to notify them of a material alteration to the risk, can invalidate the terms of the policy.
Insurance brokers and accident claims management companies are advisors only. They are not responsible for submitting accurate information to the insurers, YOU ARE!
So telling porkies about that speeding endorsement you got last year, or the fact that you have had the vehicle chipped to produce more bhp is a big no no.
A lot of insurers also take exception to any after market alterations that might make the vehicle more attractive to a thief, or otherwise alter the manufacturers specification.
Believe it or not, this can even extend to the type and wording of any sticker you might place in the vehicle. Parking your pride and joy in Liverpool with a Manchester United sticker in the rear window is just asking for trouble!
If the broker or accident management company says, 'No need to mention that wink wink', should have your alarm bells ringing.
As far as injury claims go, this is more complicated, but understand that the insurance company has the right to demand medical examinations by it's own doctors to assess your injuries. You can of course refuse, but that would be up to you!
The vehicle must also have been 'fit for purpose' at the material time the claim arose. (What this means is that the vehicle was not being used for an unsuitable purpose) eg carrying more people that it is designed to accommodate, overloading etc. This also means that seat belts and other appropriate restraints must be available for use by all occupants of the vehicle.
If you are prosecuted for an offence relating to the vehicles use at the time of the claim, then the insurers will consider those circumstances as evidence when considering the validity of your claim.
Even if you are not prosecuted, the insurers or police (serious collision) are highly likely to have your vehicle examined by a qualified engineering assessor to establish damage and it's pre collision roadworthiness. A copy of those assessments will be made available to any of the insurers involved in the matter.
Now here's the scary bit!
If the insurers believe (on a balance of probability) that you have failed to comply with any of the terms of the policy and/or that your claim might be either exaggerated or fraudulent, then have the following options.
Refuse to honour your first party claim.
Pursue you for any third party losses they have incurred.
Take civil proceedings against you for insurance fraud.
Report you to the police for criminal fraud.
Believe me, the criminal fraud option would be the least of your worries. if they think you have tried to pull a fast one and they decide to make an example of you to deter others, they may take action against you for making a fraudulent claim and they will spare no expense to defend their position. If they win and particularly if your claim is found to be fraudulent, then the cost to you can be staggering.
If you are unfortunate enough to have to make a claim, then by all means do so, but be absolutely honest with your insurers. Above all, never ever allow anyone to encourage you to make any false or exaggerated claim no matter how insignificant or well intentioned it might appear.
One of the biggest problems is that people automatically think they are entitled to a replacement vehicle if theirs is off the road. This is not always the case. Many claims management companies encourage these claims because they make a fortune out of vehicle leasing. The small print in the contract usually has a clause that make you responsible for all unpaid lease charges.
It is not unusual for lease claims to run into tens of thousands of pounds. I have dealt with many claims where lease hire costs alone were over £100,000.
CHECK ANY LEASE HIRE CONTRACT WITH A FINE TOOTHED COMB!
You as a claimant are responsible for making sure that your claim is reasonable and that you have mitigated losses to the insurance company as far as reasonably possible.
Example:
You are generally entitled to a suitable replacement vehicle if you don't have ready access to an alternative, or if temporary repairs cannot be made to your vehicle.
If you have ready access to use another vehicle that you either own or can borrow whilst yours is being repaired, then insurers might refuse to pay for a lease car. This is because you may not have suffered a material or financial loss.
Cosmetic damage is not a reason to declare a vehicle as unfit for use and the insurers are within their rights to authorise a temporary repair to make your vehicle roadworthy.
The choice as to whether a lease car is provided lies with the insurance company, not with you. If you disagree with their decision then you can appeal.
Be very careful if you take out a lease car without first checking with the insurers because in the vast majority of cases, you will be liable for part or all of those charges if your claim is not upheld.
In essence, the whole system is an absolute minefield where people are badly advised by people who probably have a financial interest in the claim.
Ultimately, the buck stops with you as the policyholder and/or claimant for the honesty of your claim. If it goes pear shaped, you will be shocked at how fast your 'advisors' leave you to carry the can.
Costs amounting to well over £150,000 for a simple low consequence collision are not unusual, to an insurance company this is just part of the risk, what is it to you?
The last case I dealt with at Manchester civil court involved a relatively minor shunt in a supermarket car park. The insurers alleged fraud against the claimant(s) and won their case. The judge awarded all costs which came to over £178,000 against the claimant and ordered a sequestration order on his assets along with a demand for a 28 day payment of £28,000.
Have a nice day and drive carefully!
ChrisB
