My vehicle was uninsured in an accident, how does the claim process go?

Question

Recently i was in a car accident, i was in my mums car and this is uninsured as was recently purchased and recently put on road. Unfortunate as this may be, it is the case. I rear ended another vehicle, police saw the incident, and is my fault. How does the claim go, i went on her insurers' website and see they cover for accidents involving uninsured drivers. If that is the case, what do i pay, do i pay her excess or not? She decided to involve the company, it only needs a new bar, i told her to ring me and she did not, now i got a letter asking what my intentions are. Which are good, but I am seeking advice on my options.

Answer 1

i work in insurance claims in australia.

you are responsible for the WHOLE LOT, not simply reimbursing her her excess.

her insurance clause stating she will be covered by her insurer when an uninsured vehicle hits her is a benefit on her own insurance policy and has nothing to do with the dollar amount you are legally obligated to pay.

she will lodge a claim through her insurance company, they will assess the damages, negotiate the repair costs with the repairer and pay the bill.  usually, she will pay her excess to the repairer and the repairer bills the insurance company the balance.  however, some insurers will waive the payment of the excess if their client has supplied third party (ie your) details and if their client is not at fault.

she does not legally have to contact you or involve you in this process of repairing her vehicle.  nor, do you have any rights to dictate to her or her insurer which company to use.  

by mindful that an insurance company is a business, not a charity.  they aren't in the habit of paying more for repairs than they are obligated to.  In actual fact, insurance repairs usually come in cheaper than private repairs, simply because companies using selected repairers negotiate LOWER labour and paint rates than private work, due to the volume of work sent their way.  just the same way every other business works ie the more work the insurer buys, the cheaper standard rate the repairer gives.

you do not legally have to pay her excess either.  what she does or does not have to pay is part of the contractual agreement between her and her insurer.

once her car is back on the road her insurer will then write to you seeking recovery of the amount in full, including her excess.  they will usually include the repair invoices, justifying the amount they are seeking.   if and when you pay that back to her insurer, they will reimburse her excess to her.  

you can usually pay an insurer back by instalments, if you cannot pay them a lump sum all at once.

*************what i mean is - it's up to her to pay her excess initially to the repairer.  you don't have to be involved in that.  it's her contract with her insurer stating SHE needs to be pay the first $300 towards damages.  BUT you will be responsible for reimbursing the full amount of damages at the end of the day.  

I'll try give you a written example:

invoice for damages from repairer = $2,000

invoice is split in two.  one bill for excess goes to the owner $300 - she is responsible for paying it.  bill for balance is sent to the insurer $1,700

insurance company then writes to you and demands you pay insurance co $2,000.  when the insurance co receives $2,000 from you, then will reimburse their client the excess. so it all balances out at the end of the day.

i think you may be confusing the matter somewhat.  regardless of what level of cover insurance she has or what excess she has to pay etc etc - you would be responsible for the damage bill to her car in full.

Answer 2

Basically, because you went in to the back of her, her insurer will not deal with the claim at all, as you are solely responsible for all costs incurred.

If she approaches her insurer to make a claim, they will advise her of this, but will refer her to an organisation called M.I.B. that deals with uninsured motorists. All policyholders pay about £30 to this organisation when they pay their insurance premium, and the money is then used to compensate victims of uninsured drivers. They do not always pay the full amount, but they are there so that victims are not left with nothing at all.

If M.I.B cannot trace the driver, the money raised from the £30 each policyholder pays to them is used to fund the cost of the claim, but where they can trace a driver, the M.I.B. often prosecute the uninsured driver and sue them for whatever they have had to pay out. Even if you don't have the money to pay M.I.B back, they will get it in the long run as you will have to go to court and prove how much you earn, and how much your outgoings for absolute essential items are. The courts will then work out how much you can afford to pay them each month until the debt is cleared, and they will legally enforce it so that if you don't pay, they can summons you back to court.

It is also likely that when you do take out insurance in your own right, you will find it very hard to get. Most insurers wont touch drivers who have driven uninsured as they are seen as a high risk. Usually, there are insurers who will take you on, but they will charge silly prices for doing so. After five years from the date of the conviction, you no longer need to declare it though.