Written by Robin

‘Here We Go…Way Too Fast…’

Motor accident recoveries, the bane of our existence; perhaps that’s not entirely true, perhaps more the misunderstood teenager of insurance: The spotty-faced hormonally charged, emotional, argumentative brat that seems to interrupt your most ‘important’ tasks for any number of reasons. It’s perhaps how we treat it that determines its future. Do we perpetuate the cycle allowing it to learn from our apathy or unwillingness, or do we become proactive and supportive?

Let’s look at this in a few ways. The first and newest breed, the hipster, let’s say, of the third party approach. In this scenario our client is being held liable for the damages to another party’s vehicle. The other party is insured with a hip new brand that occasionally gives out free wors rolls to the inhabitants of random South African streets. They do this because they have the time and the money to do so; they have the time and the money to do so because they seemingly don’t entertain claims where the third party appears to be at fault. Their clients are incentivised to do their own leg-work in order to protect their premium rebate. You’ve effectively been cut-in as the middle man. It’s a bit like a prison nightmare you believe you enjoy.

The more traditional of the third party/recovery claims is when the broker’s client believes that they have been the victim of another party’s negligence. They have collected the details of the other party and handed these to their broker who will recover their excess in a few weeks. It’s not that straightforward though; assuming the details collected are in fact correct, it may take a fair amount of time for the insured to get anywhere. The insurer will first wait until the entire claim of their client has been settled. They do this in order to know what amount needs to be recovered. Once the figure is available the recover can start in earnest. There are then acceptable legal time frames which need to be adhered to, if the planets happen to be aligned all may just go according to plan and you may have your excess refunded in a matter of months.

The planets aren’t always aligned though; often the detail collected at the scene of an accident is veiled. The insurer may need the services of a tracing agent, they may need to do a licence check and eventually they may require the services of a legal expert. The decision to proceed when additional costs begin to be incurred remains with the insurer; this decision depends on both the merits as well as the cost factor. Insurers are unlikely to proceed with smaller valued claims unless all the puzzle pieces are in place. In the cases where the merits suggest that a recovery should proceed, the insurer will demand of the third party all the costs as well as the excess amount. In all likelihood this will be a scenario where there is another insurance company involved. The recovery of the excess is done as a service to the insured as this portion of the claim is actually not part of the insurer’s loss.

It is important to note that in terms of the insurance contract and the subrogation clause, once a claim is submitted and accepted the insurer holds all the rights. This means that any liability or right to recover is solely that of the insurer. If the insurer decides at a later stage to abandon the recovery they will advise the insured and the insured will at that point be able to attempt to claim back their excess portion from the third party directly.

The discussion on recoveries and third party approaches probably requires a series of articles rather than one; which in itself runs the risk of being flooded with an insurance vernacular. The discussion could move to the number of uninsured vehicles on the road and the need for a compulsory government third party insurance scheme. There could be a discussion on the natural evolution of the taxi industry and the different individual perceptions or opinions of that industry. A more detailed look at the legal procedure governing the addressing of letters of demand, final demands and the rights of individuals or insurers after a summons has been issued may be of use.

From our perspective as brokers we recommend claiming from your insurer and allowing them to recover on your behalf. From our experience we don’t believe that the client who treats themselves as uninsured for the purposes of preserving a no-claim-payout ever gets a fair settlement. We all pay premiums so that our insurance policy will operate when we have a loss, that we will receive the correct advice and, if we have had a motor accident which is not our fault, that the insurer will repair our vehicle and attempt to recover their loss in order to maintain our premiums. It’s the basic principle of motor insurance. If you’d like to receive a cash reward at some future date then we would suggest the service of an investment advisor.

What we can do, because that’s our attitude, is to make suggestions about what information to request when involved in an accident. We understand that in certain situations the other driver may be reluctant to give out the information and this will impact on the speed with which a recovery may be effected. Fortunately these days nearly everyone has a cellphone that is able to take photos or a camera that is able to take calls. Take photos of the scene, make sure you get the licence plate in the picture, take a photo of the disc and if possible the other parties drivers licence and any vehicle signage. Take down the name, address, ID number, contact numbers and if possible details of insurance broker or company. This information will enable the insurer to act quickly and increase the chances of a successful recovery. If in doubt give your broker a call.