Posts Tagged ‘Car Insurance policyholders’

Not all cars are written off in an accident – Many of these can be repaired by professional vehicle mechanics and repair shops! This often presents a dilemma to the vehicle owner. What can he do if these repairs were not performed to his satisfaction and the vehicle is simply not in the shape it is used to?

Nature of the repair complaint

The complaint usually is either that the repair work done is inefficient or defective or that the vehicle has not been restored to its pre-accident condition, or a combination of both.

This necessitates a closer focus on the relationship between the insured vehicle owner, his car insurance company and the vehicle repairer. The best advice is always to return to the terms and conditions of the car insurance policy!

What does the car insurance policy stipulate?

To ascertain whether you have a valid complaint against the Insurer under the policy, you must first appreciate its rights in regard to repairs. In nearly all comprehensive policies the Insurer has a choice – it can either pay your loss or damage, i.e. the reasonable costs of repair, or at its expense reinstate the vehicle to its pre-accident condition.

If your insurer decides to pay your loss, then usually the legal position is that you may appoint the repairer and that you are responsible to pay the repair costs. You also have legal rights against the repairer if he does not do the job properly. Your Insurer has no part in the dispute, and its obligation is simply to pay you what it costs to repair the car. In practice it sometimes pays the repairer, but it has no right (unless the policy says otherwise) to do this without your permission.

If the insurer decides to it decides to reinstate the vehicle to its pre-accident condition, the legal position is different. The Insurer may and usually does nominate the repairer, and consequently the Insurer, and not you, must pay the bill and approve the work.

If you are not satisfied that the vehicle has been properly “reinstated” then your remedy is against the Insurer, and if the Insurer will not get it done properly, the Insured may get it done himself and claim the cost from the Insurer.

Car Insurance Policy should provide the answer

It might however not be as simple as one of two options! Some policies contain provisions that seem to “mix up” the two choices, for example, that the Insurer may nominate a repairer even where it does not choose to reinstate, or that the Insured is always primarily liable for repairers’ costs. It needs a careful look at the policy and the facts, therefore, to determine which of the two routes the Insurer has adopted.

Who decides that the repair is defective?

You will need independent and expert opinion to show that the repairs are defective, or that there has not been proper reinstatement. A competent check and report by an organisation like the AA could be useful, or a qualified opinion by your usual servicing garage that the condition is not what it used to be or ought to be.

Do you sign release documentation?

On the Car Insurance Blog [carinsurance.arrivealive.co.za] we have urged policyholders to be cautious of the fine print in policies!

Beware of the signature of the “discharge” form which might be placed under your nose when you call for the vehicle. There is no legal obligation on you to sign a form which discharges the Insurer or the repairer from all liability before you have been given any real opportunity to check the quality of the repairs. If they won’t hand the car over without it, put a big “UNDER PROTEST” next to your signature, which will support an argument later that you only signed because they refused to return your property unless you did.

Although it is often practically speaking a sensible thing to do, there is no legal obligation on you to pay your “excess” to the repairer. If the Insured is reinstating, then your obligation is to pay your Insurer the excess when it has complied with its obligation to reinstate, and if it is paying out your loss, then it is entitled to deduct the excess from that payment. Either way, legally speaking, the repairer has nothing to do with your excess. Only pay the excess to the repairer if you are satisfied that the Insurer has appointed the repairer as its agent to receive the payment on its behalf.

Summary and Advice:

1. Find out if your Insurer is paying you your loss or reinstating the vehicle.

2. If it is paying your loss (less excesses) you deal with the repairs and the repairer. Your loss is usually the fair and reasonable cost of repair.

3. If it is reinstating, the repairers are Insurers agents and should look to Insurers for payment; you are entitled to the repaired vehicle in as good a state as it was prior to the accident, and you are obliged to pay any excess to the Insurer.

4. Read your policy conditions to check whether there is anything which affects the basic positions set out above.

5. If you are satisfied that you can prove that what the Insured is offering you in money does not represent your proper loss less excess, or that the vehicle has not been properly restored, then object, and if you cannot achieve satisfaction, approach the Ombudsman if you want mediation, or your Attorney for advice as to whether you should assert your rights in a Court of Law.

[Information from the Office of the Ombudsman]