The Perils Of Privatisation - Part X
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Car Insurance Excess
My sister in law had an accident recently, which was her fault.
To reduce the premium she had a high volutary excess on a comprehensive policy. The car was pretty old and not worth much.
The insurance company are saying that the car was worth less than the excess and they are demanding the difference be paid, presumably to put towards the cost of repairing the other persons car.
Can they do this?
To reduce the premium she had a high volutary excess on a comprehensive policy. The car was pretty old and not worth much.
The insurance company are saying that the car was worth less than the excess and they are demanding the difference be paid, presumably to put towards the cost of repairing the other persons car.
Can they do this?
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I must say I'll be surprised if I can find an insurer that will sell a third party only policy, but I bow to your greater knowledge. I'll have a search tomorrow. But if I do find one, and it transpires that they are offering a third party excess, then I can assure you that the policy will be illegal. In the meantime, if you can give me an example it'd be much appreciated. Cheers.
Right - I've stooped to the depths and read my policy (Aviva).
Excess is defined as:
The amount the principal policyholder or the vehicle policyholder must pay towards any claim.
It also says:
We will insure the persons insured for all amounts which they may have to pay as a result of being legally liable for an accident etc
This, to me, means that:
1) they will satisfy the conditions of the RTA in that they will pay the 3rd party's claim in full
2) you will have to pay your policy excess.
Excess is defined as:
The amount the principal policyholder or the vehicle policyholder must pay towards any claim.
It also says:
We will insure the persons insured for all amounts which they may have to pay as a result of being legally liable for an accident etc
This, to me, means that:
1) they will satisfy the conditions of the RTA in that they will pay the 3rd party's claim in full
2) you will have to pay your policy excess.
EDDIE51 The Aviva wording is misleading and anyone could be forgiven for thinking that the excess applies to TP claims. If you look at Section 2 of your policy it states that they will pay TP property damage up to the amount in your Schedule. There is no mention of this being subject to an excess. Might be worth checking with Aviva.
Turning to the RTA 1988, an excess is in effect an uninsured loss. S.143(1)(a) states that we must have insurance against TP risks. S.145 defines what the policy must cover. S.145(3)(a) states that the insurance must cover both TPPI and TPPD (so far without mention of any limit). However, s.145(4)(b) states that the policy is not required to cover more than £1 million in respect of TPPD. In other words the policy must provide cover at least for any amount up to £1
million in respect of TPPD, without an excess. If it doesn't, it fails to comply with the RTA. The insurer cannot require the policyholder to be responsible, out of their own pocket, for something they may be liable for in respect of a liability under the Act. I do hope that this clarifies the position. If not, do get back to me.
Turning to the RTA 1988, an excess is in effect an uninsured loss. S.143(1)(a) states that we must have insurance against TP risks. S.145 defines what the policy must cover. S.145(3)(a) states that the insurance must cover both TPPI and TPPD (so far without mention of any limit). However, s.145(4)(b) states that the policy is not required to cover more than £1 million in respect of TPPD. In other words the policy must provide cover at least for any amount up to £1
million in respect of TPPD, without an excess. If it doesn't, it fails to comply with the RTA. The insurer cannot require the policyholder to be responsible, out of their own pocket, for something they may be liable for in respect of a liability under the Act. I do hope that this clarifies the position. If not, do get back to me.
Nationwide
Do I have to pay the excess towards a Third Party claim?
No, you only need to pay the excess towards your own repairs.
http://
Direct Line
With Direct Line Car Insurance, you only pay the excess amount when you make a claim under our Comprehensive and Third Party Fire and Theft Car Insurance policies. Excess does not apply to Third Party Only.
http://
From Defaqto
For third party, fire and theft insurance, be aware of the excess that is applicable for fire and theft claims.
Policy excesses are the costs you may have to pay towards the repair of your car.
https:/
The AA
What is a policy excess?
An excess is the first portion of a claim which you have to pay, regardless of blame, when your vehicle is repaired or written off, and is individual to each policy. You will only have to pay your own excess and not the third party's excess.
https:/
Honest John
If you have comprehensive insurance then you only pay the excess on your own claim, not the third party's. Your insurance has to completely indemnify the third party. These days, even being involved in a claim can hike your insurance, whether you have no claims discount protection or not.
http://
Adrian Flux
What is an excess?
An excess is an amount payable by you in the event of a claim against your policy for your own damage/loss. Details of specific excesses relating to your policy can be found on your policy schedule.
http://
There is only one reason for the existence of either voluntary or compulsory excess - it is discourage the insured person from claiming for minor damage, such as broken windscreen mirrors.
If you are involved in an accident and it is your fault but there is no damage to your own vehicle but you have caused damage to another vehicle, property (such as a lamp post), or person you will not pay the excess, even if the claim is £1m.
Do I have to pay the excess towards a Third Party claim?
No, you only need to pay the excess towards your own repairs.
http://
Direct Line
With Direct Line Car Insurance, you only pay the excess amount when you make a claim under our Comprehensive and Third Party Fire and Theft Car Insurance policies. Excess does not apply to Third Party Only.
http://
From Defaqto
For third party, fire and theft insurance, be aware of the excess that is applicable for fire and theft claims.
Policy excesses are the costs you may have to pay towards the repair of your car.
https:/
The AA
What is a policy excess?
An excess is the first portion of a claim which you have to pay, regardless of blame, when your vehicle is repaired or written off, and is individual to each policy. You will only have to pay your own excess and not the third party's excess.
https:/
Honest John
If you have comprehensive insurance then you only pay the excess on your own claim, not the third party's. Your insurance has to completely indemnify the third party. These days, even being involved in a claim can hike your insurance, whether you have no claims discount protection or not.
http://
Adrian Flux
What is an excess?
An excess is an amount payable by you in the event of a claim against your policy for your own damage/loss. Details of specific excesses relating to your policy can be found on your policy schedule.
http://
There is only one reason for the existence of either voluntary or compulsory excess - it is discourage the insured person from claiming for minor damage, such as broken windscreen mirrors.
If you are involved in an accident and it is your fault but there is no damage to your own vehicle but you have caused damage to another vehicle, property (such as a lamp post), or person you will not pay the excess, even if the claim is £1m.
Well, it looks like I was wrong - interesting discussion though.
I'm just about to renew my policy so, for fun, I got a quote for 3rd party only with varying excesses. They did provide me with quotes but all quotes were the same, regardless of chosen excess - backs up YOUR theory, leaves me looking like a prat.
There's one thing I'm sure we'll all agree on though - the insurance company will get its money back somehow.
I'm just about to renew my policy so, for fun, I got a quote for 3rd party only with varying excesses. They did provide me with quotes but all quotes were the same, regardless of chosen excess - backs up YOUR theory, leaves me looking like a prat.
There's one thing I'm sure we'll all agree on though - the insurance company will get its money back somehow.
I can finally report back, and am embarrassed to say that my SIL and MIL had it all wrong.
The letter was misunderstood (I haven't seen it but it is apparently confusing)
It seems that they were actually saying they valued the car at £450 (very generous valuation I have to say) and as the excess was £500 they will not be paying.
They were never asking for her to pay them any money. I am bemused that anyone can so seriously misunderstand a letter.
I must apologise for asking the question before finding the full facts.
I am sorry for wasting your time. I supect however that for at least a few I provided some entertainment.
The letter was misunderstood (I haven't seen it but it is apparently confusing)
It seems that they were actually saying they valued the car at £450 (very generous valuation I have to say) and as the excess was £500 they will not be paying.
They were never asking for her to pay them any money. I am bemused that anyone can so seriously misunderstand a letter.
I must apologise for asking the question before finding the full facts.
I am sorry for wasting your time. I supect however that for at least a few I provided some entertainment.
-- answer removed --
I have always had 'old bangers' (until we got our Motability car) ever paid more than £400 for a car, most were far less than that and several were free.
I could never understand why fully comp insurance was cheaper than 3rd party only when you knew you would never get any cash back for your own car in the event of a claim. No one was ever daft enough to steal any of my old wrecks either. I once left an old car in a town centre car park for a week with the keys in it hoping someone would pinch it so I could claim on the insurance but it was not touched.
I could never understand why fully comp insurance was cheaper than 3rd party only when you knew you would never get any cash back for your own car in the event of a claim. No one was ever daft enough to steal any of my old wrecks either. I once left an old car in a town centre car park for a week with the keys in it hoping someone would pinch it so I could claim on the insurance but it was not touched.
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