NSW Uninsured Motorist Benefit - Car Insurance Wants to Tow Car Away?

[Pyroflamer]

Hi forums,

To cut to the chase: I had an accident. My car insurance QBE determined it is the third party's fault. However, the third party has no insurance, so QBE decided to pay me under their Uninsured Motorist Benefit policy, which is worded as follows:

i) Up to $5,000, or
ii) The market value of your vehicle, whichever is less, if your vehicle is accidentally damaged in a collision with another vehicle and we agree that:

a) The other driver is 100% at fault
b) The owner of the other vehicle, or its driver, didn't have insurance covering the damage to your vehicle

If we pay you the market value of your vehicle, then your vehicle in its damaged condition will become our property.

The market value of my vehicle has been assessed by the insurer at ~$7100. The insurer has agreed to pay me $5000, but says my car needs to be towed away. If I want to keep it, they say they would need to deduct 700$ from 5000$ reflecting the cars salvage value.

I'm pretty sure the interpretation of the clause means I get to keep my vehicle because the payment of 5000$ is not the market value of my vehicle, which is 7100$.

I've been escalating up with my insurer but so far they're refusing to accept my interpretation.

What is your interpretation of this? If I'm right, what should I do? Can I take my insurer to court?

 

[Zerojay]

You are correct. QBE is not entitled to your damaged vehicle or to deduct its salvage value of $700 from a payment of $5000 to you. You should continue to dispute and if QBE does not relent then take the matter to the Financial Ombudsman Service for independent review. The Ombudsman is a free service to you.

Keep in mind that your financial loss is $6400 (market value less salvage value) plus other costs such as car hire and you are entitled to chase the at fault driver for any shortfall after your insurer’s payment to you.

I do not give legal advice, just an opinion based on 20 years experience working for an insurance company.

 

[Pyroflamer]

Hi Zerojay,

Thanks for your reply.

At the moment because I still need to rely on my insurer to pursue the 3rd party in court, I don't want to be too insistent and argue with my insurer on this point because I'm afraid they might suddenly decide to stop cooperating / not pay me even the 5000$ that they currently have agreed to. Is that actually possible or am I just thinking too much here?

And also, the Senior Technical Claims officer has been calling me repeatedly and asking me if I want to have my car towed or keep the car but deduct 700 (i.e. strongly insisting that QBE still is entitled to my car). He is saying that because the term Market Value in their PDS is defined as the 'cash settlement price' of a vehicle , and the 5000$ is the cash settlement price, therefore 5000$ becomes technically the "market value" here. Should I ask to escalate further up?

He's pretty much not going to listen to me and I feel its pointless arguing with him on the phone. At which point should I bring in the Ombudsman if at all? And he keeps saying "so do you want to proceed with your claim or not?" which I interpret as kind of a threat...

 

[Rod]

lol - you might have a case!

If the contract is laid out the way you presented it above, then your argument seems sound. It is probably not what they intended, but worth a shot.

However if the layout of the contract is different then the insurance company may be right.

 

[Zerojay]

The STC officer is wrong and the reasoning given to you is ridiculous. To start with, this person is misquoting the PDS . The correct wording is the “cash purchase price” not settlement price. Also a definition should be used in its entirety, not relying on just a small part of it. Secondly, the suggestion that a policy sub-limit is market value of your vehicle is a nonsense.

If I was you I would write to QBE stating politely but firmly that you:

Will not accept less than $5000

Keep the damaged vehicle

Are requesting your dispute be escalated

If QBE does not agree you will take the dispute to the Ombudsman, and also seek compensation for unfair delay in settlement of your claim.(interest and any other expenses you incur due to the delay).

You can also request QBE to include your uninsured loss of $1400 in its recovery action against the at fault driver.

 

[Adam1user]

Hi forums,

To cut to the chase: I had an accident, my insurer QBE determined it is the third party's fault. However, third party has no insurance, so QBE decides to pay me under their Uninsured Motorist Benefit policy, which is worded as follows:

i) Up to $5,000, or
ii) The market value of your vehicle, whichever is less, if your vehicle is accidentally damaged in a collision with another vehicle and we agree that:

a) The other driver is 100% at fault
b) The owner of the other vehicle, or its driver, didn't have insurance covering the damage to your vehicle

If we pay you the market value of your vehicle, then your vehicle in its damaged condition will become our property.

The market value of my vehicle has been assessed by the insurer at ~$7100. The insurer has agreed to pay me $5000, but says my car needs to be towed away. If I want to keep it, they say they would need to deduct 700$ from 5000$ reflecting the cars salvage value.

I'm pretty sure the interpretation of the clause means I get to keep my vehicle because the payment of 5000$ is not the market value of my vehicle, which is 7100$.

Ive been escalating up with my insurer but so far theyre refusing to accept my interpretation.

What is your interpretation of this? If Im right, what should I do? Can I take my insurer to court?

Hi. Sorry to point this out, and my opinion is based on what is written above, it may change if I read the whole document;

Your policy states to pay you $5,000 or market price whichever is less, you purchased the policy, therefore you have agreed to this condition. I am not sure you would be able to argue otherwise, it will not hurt to ask around. This is my point of view.

Good luck.

 

[Clancy]

Hi. Sorry to point this out, and my opinion is based on what is written above, it may change if I read the whole document;
Your policy states to pay you $5,000 or market price whichever is less, you purchased the policy, therefore you have agreed to this condition. I am not sure you would be able to argue otherwise, it will not hurt to ask around. This is my point of view. Good luck.

I had to read the OP post a few times before i understood that you actually missed the point of contention entirely!

People are agreeing with the OP based on this line of the contract "If we pay you the market value of your vehicle, then your vehicle in its damaged condition will become our property."

They are not paying the market value, therefore the vehicle remains the property of the OP and therefore a 'salvage' claim of any kind by the insurer is clearly in error.... not withstanding any other clauses in the contract we dont see here which may be relevant to this matter.

 

[Adam1user]

I had to read the OP post a few times before i understood that you actually missed the point of contention entirely!

People are agreeing with the OP based on this line of the contract "If we pay you the market value of your vehicle, then your vehicle in its damaged condition will become our property."

They are not paying the market value, therefore the vehicle remains the property of the OP and therefore a 'salvage' claim of any kind by the insurer is clearly in error.... not withstanding any other clauses in the contract we dont see here which may be relevant to this matter.

I don't think I missed it, the condition of the agreement is to pay up to $5,000 or market value if less, so if the market value is more than $5,000, the max they pay is $5k, if the market value is less than $5k, then they pay that amount. If the insurance company paid out an amount (either the market value (which is less than $5k) or up to $5k) then the vehicle becomes the property of the insurance company. If the market value is more than $5k and the policy holder accepts the $5k payment, then this amount becomes the "market value" of the vehicle for this transaction only.

This is what I understood from what was written. I am not a lawyer but this is my point of view, the OP can ask a lawyer (who will read the whole insurance policy) and better not rely on what is written in the forum for the following reasons: we are expressing the view based on a section of the insurance policy where other sections in the policy can provide more info, and we don't know the whole story. My opinion was based on what the OP provided.

 

[Clancy]

I don't think I missed it, the condition of the agreement is to pay up to $5,000 or market value if less, so if the market value is more than $5,000, the max they pay is $5k, if the market value is less than $5k, then they pay that amount. If the insurance company paid out an amount (either the market value (which is less than $5k) or up to $5k) then the vehicle becomes the property of the insurance company. If the market value is more than $5k and the policy holder accepts the $5k payment, then this amount becomes the "market value" of the vehicle for this transaction only.
This is what I understood from what was written. I am not a lawyer but this is my point of view, the OP can ask a lawyer (who will read the whole insurance policy) and better not rely on what is written in the forum for the following reasons: we are expressing the view based on a section of the insurance policy where other sections in the policy can provide more info, and we don't know the whole story. My opinion was based on what the OP provided.

I do not know where this line came from? "If the market value is more than $5k and the policy holder accepts the $5k payment, then this amount becomes the "market value" of the vehicle for this transaction only."

 

[Adam1user]

I do not know where this line came from? "If the market value is more than $5k and the policy holder accepts the $5k payment, then this amount becomes the "market value" of the vehicle for this transaction only."

I wrote that, I was saying from the wording the OP written which is taken from the insurance policy: payment up to $5k or the market value, whichever is less, this was my understanding of that section, but as I mentioned, my understanding and opinion would change if I read the whole insurance policy.