THE PITFALLS OF DEALING DIRECT WITH INSURERS IN A ROAD ACCIDENT CLAIM

January 7th, 2010 admin

Published in Truckstop News January 2010.

In this month’s issue Steven Hinchliffe of the specialist Personal Injury Compensation firm Hinchliffes Solicitors considers “THE PITFALLS OF DEALING DIRECT WITH INSURERS IN A ROAD ACCIDENT CLAIM”

This article looks at the very beginning of road accident claims, how they are funded and the pitfalls to be aware of, particularly regarding insurance companies. However, similar issues could apply to any type of accident compensation claim.

For many commercial entities involved in the personal injury claims business, an accident is purely a commodity to be bought and sold. Despite the apparent lack of openness, almost all insurance companies will trade a claim for cash, potentially exploiting the injured party rather than protecting their interests. Many insurers may soon be launching advertising campaigns to persuade the public to deal with them direct, but concealing their real motivation.

Like all injury compensation claims, a road accident claim can only be pursued by solicitors. Adverts from claims companies on TV, on the Internet and in newspapers might suggest they will handle each case personally, but this is incorrect. They actually sell the claim to solicitors on their appointed panel, often for a price of between £600 and £800. The chosen solicitor will usually handle the matter on the basis that the injured person pays no legal costs, but some claims companies either charge a set amount or take a slice of the compensation once the case is successful, and which can amount to a substantial figure. Before responding to this type of advertising, why not do some research and find a firm of specialist claims solicitors with a proven track record, and deal with them direct.

If the injured person’s own car insurers offer to handle the claim, it is reasonable to assume that they will fight for justice on their behalf, especially as a hefty insurance premium will already have been paid. However, you are just a commodity to them. World wide, insurers spend billions on advertising, designed to promote the image that they care about their customers. Nevertheless, always remember that the insurance industry is global and the ONLY interest they have is in increased profits. People may not realise that, to assist in building a larger customer base, around 40% of each premium paid is passed on as commissions to insurance brokers. Also, like claims companies, insurers will not be able to pursue claims themselves and instead sell them to their panel solicitors for several hundred pounds.

If a road accident caused by someone else has resulted in damage to your car and injury to you or your passengers, you will of course want redress. You contact your insurers for the repairs to be arranged, and they will casually ask if you have been hurt. Before you know it their panel solicitors contact you, adamant that only they can deal with your personal injury claim. The insurers’ suggestion that to use another solicitor would mean you lose the benefit of your insurance cover is simply not true. You can choose any solicitor to handle your case and still be protected from having to pay legal costs.

The position with regard to the guilty party’s insurers is little better. In the same way that you reported the accident to your insurers, the other driver will have been in touch with their insurers and passed on your details. They then contact you direct and make an immediate offer to settle your claim, before it even gets underway. They insist they are offering a fair sum and that you will not have the bother of dealing with solicitors, ‘who everyone knows cause delay, will charge you a fortune and generally make you worse off than if you accepted their reasonable offer now’. This process is called “third party capture”.

Third party capture has been happening for years and is likely to continue to be a tactic used by insurers until the practice is regulated. The aim is to limit the amount of money paid out by the insurers thereby increasing their profit, and the injured person’s welfare is simply not a consideration. Offers of around £1,000 may be made and if accepted a settlement form must usually be signed, which seemingly prevents any further claim should the injury not settle quickly. However, this would not actually be an enforceable agreement.

Even when a claim has already commenced, insurers (including household names) continue to try and tempt the injured person to settle direct with them, and almost always on the basis of an under valuation of the true claim.

Very few personal injury claims have a full valuation of £1,000. For example, a modest whiplash injury where symptoms have resolved within 6 months could justify compensation closer to £2,000. In addition financial losses must be calculated, for example lost income for time away from work due to the accident and which could run into several hundred pounds. It is simply not possible to assess the full value of a claim straight after the accident. It is not until all the medical consequences have materialised and full financial losses investigated that it is safe to consider a settlement offer. There are many cases where people have suffered with long term injuries resulting from what initially appeared to be a minor accident, and their claims have resulted in compensation awards of £50,000 plus.

Therefore, always be wary of accepting the first offer made by insurers. Their first duty is to make a profit for their shareholders and the cheaper they can buy off a claim, the more profit is generated. It is always better to seek legal advice if there is any doubt about what to do after an accident.

To see Steven Hinchliffe’s talk about the claims process follow this link to YouTube:

http://www.youtube.com/watch?v=f_lB22sOkUk

PERSONAL INJURY CLAIM SOLICITORS:-

If you have suffered any form of accident or contracted an industrial disease contact personal injury claims specialists Hinchliffes Solicitors for immediate legal advice, to find out if you are entitled to make a claim for personal injury compensation. All cases are conducted on a Free No Win No Fee claims basis, where you keep 100% of the compensation recovered.

Call now on 0800 138 1348 to speak direct to one of our specialist claims solicitors or go to our Start Your Claim Now page to submit details of your accident compensation claim online.