SA Uninsured Mum Hit My Car - Insurance Law Recourse?

[jack107]

Hey - wondering what the best way to go about my claim is.

My mum reversed into my car and has left a pretty large dent. The car door is broken, and panels will need to be replaced. My mum was uninsured, and I have full comprehensive. I have read and it appears I have the ability to claim Uninsured Motorist Extension.

My question is what is the best way to go about this under insurance law? I don't want Mum to be chased up for thousands of dollars, but also will suck if it raises my premium in future, etc. Any help or opinions would be greatly appreciated

Thanks!

 

[Zerojay]

Hello Jack,

You did not say who you are insured with so my answer is in general terms. If you name your insurer I may be able to be more specific.

Firstly you do not have to worry about your insurer chasing your mum for their costs as it is illegal for them to do so. There is protection against any such action set out in section 65 of the Insurance Contracts Act. Basically if you would not sue the person at fault due to a close personal or family relationship, then the insurer is unable to seek recovery from that person. When you lodge a claim make clear to them it is your mum who caused the damage.

Uninsured Motorist Extension is a benefit only for Third Party Fire and Theft and Third Party Only policies. It does not apply to Comprehensive policies because you don’t need it - you are fully covered for damage to your vehicle.

Most policies include in the terms and conditions that the usual excess will be waived and the claim will not affect your future premium if you are deemed not at fault and you provide the details of the person who caused the damage. This is because the insurer hopes to recover costs. It is a bit of a loophole that you still should receive these concessions even when recovery cannot be attempted because of the law stated above.

Good luck.

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

 

[jack107]

Hello Jack,
You did not say who you are insured with so my answer is in general terms. If you name your insurer I may be able to be more specific.

Firstly you do not have to worry about your insurer chasing your mum for their costs as it is illegal for them to do so. There is protection against any such action set out in section 65 of the Insurance Contracts Act. Basically if you would not sue the person at fault due to a close personal or family relationship, then the insurer is unable to seek recovery from that person. When you lodge a claim make clear to them it is your mum who caused the damage.

Uninsured Motorist Extension is a benefit only for Third Party Fire and Theft and Third Party Only policies. It does not apply to Comprehensive policies because you don’t need it - you are fully covered for damage to your vehicle.

Most policies include in the terms and conditions that the usual excess will be waived and the claim will not affect your future premium if you are deemed not at fault and you provide the details of the person who caused the damage. This is because the insurer hopes to recover costs. It is a bit of a loophole that you still should receive these concessions even when recovery cannot be attempted because of the law stated above.

Good luck.

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

Hi,

Thank you so much for that reply! I’ve been a little confused around this as another forum told me CGU would go after mum if I were to go through them, and the best option was to try and settle it with her directly.

Mum doesn’t have the money, and it is a pretty rocky relationship as is so trying to resolve in best manner for both parties!

For reference I’m with CGU insurance so hopefully that doesn’t change anything!

Thanks again for the info!

 

[Zerojay]

I had a quick look at the PDS and I think what I said about Premium and excess will apply. Let me know if you have any problems.

 

[Adam1user]

Hello Jack,
You did not say who you are insured with so my answer is in general terms. If you name your insurer I may be able to be more specific.

Firstly you do not have to worry about your insurer chasing your mum for their costs as it is illegal for them to do so. There is protection against any such action set out in section 65 of the Insurance Contracts Act. Basically if you would not sue the person at fault due to a close personal or family relationship, then the insurer is unable to seek recovery from that person. When you lodge a claim make clear to them it is your mum who caused the damage.

Uninsured Motorist Extension is a benefit only for Third Party Fire and Theft and Third Party Only policies. It does not apply to Comprehensive policies because you don’t need it - you are fully covered for damage to your vehicle.

Most policies include in the terms and conditions that the usual excess will be waived and the claim will not affect your future premium if you are deemed not at fault and you provide the details of the person who caused the damage. This is because the insurer hopes to recover costs. It is a bit of a loophole that you still should receive these concessions even when recovery cannot be attempted because of the law stated above.

Good luck.

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

Hello Zerojay,

This is good information to know, I always appreciate when you write this type of info (say insider information )

Some time ago, my car had a break in, and I claimed on my comprehensive insurance. The company informed me as I could not provide the details of the person who did it, it would be considered as "at fault" and paid the excess, I think is was unfair, as I think it caused my insurance premiums increase (too hard to prove as they increase anyway).

My question, isn't the case above similar? can't I say that I don't want person X charged and then I'm off the hook from it? this happened long time ago, not intending to back to claim on it (the excess I paid) but can I do it? [This is for future if anything happens like this].

Thanks a lot,

 

[jack107]

I had a quick look at the PDS and I think what I said about Premium and excess will apply. Let me know if you have any problems.

Thank you so much for this info - really helpful.

I’ve done some further reading, and according to my PDS everything seems to line up, accept for his curly section.

In addition, you also give us your rights to claim from
anyone else:
• if you have a right to claim from anyone else for an incident covered by us, you give us your rights to make that claim, to conduct, defend or settle any legal action and to act in your name – you must not do anything which prevents us from doing this and you must give us all the information and cooperation that we require.

The section “you must not do anything which prevents us from doing this“ worries me the most. Sounds like this may be where they cover themselves?

There was also a lot about not covering immediate family members, but that’s only if you live with them, so I’m all good there.

As the above poster mentioned, say all goes not as expected, can I just cop an at fault claim, pay the excess and take higher premiums?

Thanks again!

 

[DMLegal]

It wouldn't be an 'at fault' claim since from what I gather you were not at fault. Premium increases typically only happen where you were in your mums situation, and she claims off you. I.e. where you pay for an innocent parties repair. They probably will chase your mum up, at least from working at an insurer (albeit not CGU) that was common practice. It could also have happened at a car park?....

 

[Zerojay]

I will try to answer your questions succinctly. The outcome can vary from one insurer to another but generally...

Adam, if a stranger damages your car and you claim on your insurance but do not have any details of the person responsible, then the insurance company will not waive your excess and the claim will likely affect your future premium. This is because the insurer will bear the full costs as no recovery is possible. So although you are not at fault, it is treated in the same manner as an at fault claim. If you can and do provide the details of the stranger, then your excess will be waived and the claim will not affect your premium, regardless of whether the insurer makes a subsequent recovery of costs or not.

If it is your mum who caused the damage, the law says that the insurance company, after paying your claim, cannot recover from her. However if you provide her details to the insurer, it is likely the insurer will waive your excess and not increase your premium. This is because they are bound by the policy wording which says this is what happens if you are not at fault and you provide the required details of the person who caused the damage.

If you try to prevent the insurer from seeking recovery from a stranger, then the insurer, relying on the clauses Jack has quoted in his last post, can refuse your claim entirely. So you cannot gain any advantage from such a tactic.

Jack, you do not need to be concerned about giving your recovery rights to CGU. Statute Law, in this case the Insurance Contracts Act, overrides anything the insurance company puts in the policy wording. CGU cannot recover from your mother.

The bit about not covering family members is in that part of the policy dealing with your liability to others. That is where you for example, driving your car, damage mum’s property. If she was someone living with you then you are not covered for the other property damage. This is like the other side of the coin to the insurer not being able to recover from a close relative.

I am confident you can claim for your repairs, provide your mum’s details (making sure they understand it is your mum), not pay an excess, not have your premium affected and not have CGU chase her. My only slight doubt is in respect to excess where the policy clause says you must also provide her insurance details. They may try to put their own interpretation on this to mean they only waive the excess for insured third parties. But let’s not worry about that until it occurs.

 

[Adam1user]

Hello Zerojay,

Thank you for clarifying this for me. I really appreciate taking the time to write your comment, as I stated before, I enjoy to read your comments as I am learning for you experience.

Thank you.