A constant problem with motor insurance is the loss or reduction of no-claims discount. This happens when a company pays out for circumstances where one driver believes himself/herself innocent. Policies require policyholders to inform insurers about an accident. However, they are not required to file a claim. Insurers should make it clear to policyholders that they have this option if there has been no damage to the other side. In 1982, the ombudsman announced his intention to investigate the possibility of having insurers make it clear that policy holders had the option. The insured cannot dictate the way the third party claim should proceed once he has submitted it to the insurer.
Third parties that agree to pay the damage but then renege upon being presented with the bill is another area of concern. According to the ombudsman, there is a partial solution. The registry of insurance coverage would help the claimant locate the insurers. The UK does not have a central register of this type.
Two drivers may be insured by the same company. This can lead to disputes over the apportionment or the effect on no claims discounts. One driver may be held responsible for the accident, while another may be held accountable. In this case, both drivers could lose their discounts. The ombudsman described it as an unfavorable state of affairs. It is difficult to find a solution. In one case, counsel was requested to provide an opinion which led to the claim manager’s incorrect assessment of liability. The Bureau would have to spend a lot of money if counsel’s opinions were requested on more than one occasion. Important is that insurers are alert to the potential conflict and take the matter seriously, rather than treating it as an internal matter.
Numerous motorists have complained about the ‘Knock for Knock” agreements. These agreements are primarily used to facilitate accounting between insurers, in order to reduce administrative costs. These companies are likely to accept the counter accusations of blame by policyholders and subtract from the no-claims discount. The Ombudsman admitted that this is a common occurrence and asked that insurance companies guard against unfair implementation of these arrangements when one party can prove that he was not to blame. Insurers must remember that they are responsible for protecting the rights of their insureds, and not accepting blame just because it may be easier administratively. It is not worth asking witnesses for their opinions if they are not being taken seriously. Knock for knock agreements between insurance companies have been rescinded in recent years because they didn’t result in administrative cost savings like they once did.
Car insurance policies, and all motor insurance policies generally require that vehicles be maintained in a roadworthy state. The insured may choose to fix his own car. This could lead to problems. Insurers will reject a claim if the cause of the subsequent crash is found to be poor home servicing. The ombudsman recommended that if an expensive car or other special vehicle is insure, it might be worth thinking about a’special policy endorsement’ which requires professional servicing.
Another area of dispute is the value of a “write-off”. Because third-party insurers are a contentious area, the Ombudsman understood that there might be rejections, offers and new offers. However, if it was a claim against one’s own insurer, the proposal should not be subject to further negotiation. It should be genuine and based on all available evidence. This evidence has been determined by the Ombudsman as the cost to the insured to purchase a similar vehicle on the open marketplace.
Motor insurance can be confusing because of the coverage that covers driving. Two problems are present. Two problems arise when other drivers are named on the certificate. This does not provide them with coverage to drive other cars unless that other car is insured for them. Because the certificate provides coverage for the policyholder only, it does not give cover for the other driver. This leads to the second problem. An extension to drive another vehicle doesn’t usually provide complete coverage, but only meets the Road Traffic Act 1988’s basic requirements, which is third party liability. Although the Ombudsman does not criticize insurers for doing this, it is an aspect of motor insurance law. However, he suggests that certificates should clearly express this important point.