Company avoiding insurers

ItsFelicia

Hi all,

Just looking for a bit of advice.

My mates mother was in a minor crash yesterday, a van of a major British company went into the back of her and caused damage to the car. The guy took full responsibility and they assumed the next steps would just be dealing with insurers.

The legal department of this company have since called and said they'll take the car away for a few days to fix it and sort her a replacement car in the mean while and that she doesn't have to call her insurance etc

All sounds well and good for an easy life but doesn't about it isn't sitting right with me. Is this typical practice or should she call her insurer anyway?

If this company don't fix the car right and it just messes up further wouldn't it mean she's not covered because her insurers weren't aware?

Any advice welcome!

wgl2014

She will have to inform her insurers regardless of who the claim is processed by.
The third party will be happy to sort as they avoid all sorts of inflated costs for hire cars etc.

securityguy

"The third party will be happy to sort as they avoid all sorts of inflated costs for hire cars etc."

They also probably have a massive excess on their policy, and effectively self-insure all non-injury claims. Up until fairly recently some large companies (BT, certainly) didn't carry any insurance, but posted a bond and effectively acted as their own insurance company for cars, in the way that they don't carry insurance for buildings or equipment; they're big enough that the premiums before margin would balance the claims over short periods of time, so all insurance does is pass money into the accounts of the insurance company. I can't recall the reasons, but that's apparently now harder to do for motor insurance, so large companies carry policies with massive excesses which are effectively RTA-only, and then self-insure all property damage claims.

dannyrst

I'd suggest declining the offer, given they aren't offering her the option of taking the car to a garage of her choice.

They could let any Tom, Richard or Harry work on the car.

EDIT - Apparently cannot use the common 4 letter abbreviation of Richard.

Mercdriver

securityguy wrote: »

"The third party will be happy to sort as they avoid all sorts of inflated costs for hire cars etc."

They also probably have a massive excess on their policy, and effectively self-insure all non-injury claims. Up until fairly recently some large companies (BT, certainly) didn't carry any insurance, but posted a bond and effectively acted as their own insurance company for cars, in the way that they don't carry insurance for buildings or equipment; they're big enough that the premiums before margin would balance the claims over short periods of time, so all insurance does is pass money into the accounts of the insurance company. I can't recall the reasons, but that's apparently now harder to do for motor insurance, so large companies carry policies with massive excesses which are effectively RTA-only, and then self-insure all property damage claims.

No company would be having their vans and cars out with no insurance as this would be illegal. They might however be using high excesses to keep the price down and paying for damages without claiming of their own insurance. They will be insured, though as that is what the law requires.

Johno100

Mercdriver wrote: »

No company would be having their vans and cars out with no insurance as this would be illegal. They might however be using high excesses to keep the price down and paying for damages without claiming of their own insurance. They will be insured, though as that is what the law requires.

Wrong!

From the Road Traffic Act 1988

Section 143
Users of motor vehicles to be insured or secured against third-party risks.

(1)Subject to the provisions of this Part of this Act—

(a)a person must not use a motor vehicle on a road [F1or other public place] unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act, and

(b)a person must not cause or permit any other person to use a motor vehicle on a road [F2or other public place] unless there is in force in relation to the use of the vehicle by that other person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act.

See my underlined sections above.

Nobbie1967

Mercdriver wrote: »

No company would be having their vans and cars out with no insurance as this would be illegal. They might however be using high excesses to keep the price down and paying for damages without claiming of their own insurance. They will be insured, though as that is what the law requires.

As stated above, big companies can post a security against third party claim and don't need an insurance policy.

Here the relevant information from the RTA unless it's been changed recently.

(a) a person must not use a motor vehicle on a road unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act, and

force_ten

Mercdriver wrote: »

No company would be having their vans and cars out with no insurance as this would be illegal. They might however be using high excesses to keep the price down and paying for damages without claiming of their own insurance. They will be insured, though as that is what the law requires.

large fleet operators often self insure their fleet so rather than pay aviva they manage their own fleet insurance and often employ a third Party Administrator for Claims Management

Billy_Bullocks

Mercdriver wrote: »

No company would be having their vans and cars out with no insurance as this would be illegal. They might however be using high excesses to keep the price down and paying for damages without claiming of their own insurance. They will be insured, though as that is what the law requires.

You've been shown it's not, some police forces and the post office did just that.

vikingaero

It's perfectly normal for large companies/organisations and Third Party Insurers to do this. They farm this out to their preferred bodyshop who may give them discounted rates for work. That way you and I avoid the bogus claims companies, shark loan car companies etc.

Ask first who the repairer is. It may be the local bodyshop that you would have used anyway. If your car is a normal vanilla car then there is no reason not to use them and indeed they may be an approved repairer for your Insurer or car manufacturer.

George_Michael

Whilst it's certainly true that you can lodge a bond (£500,000) with the government and by doing so you do not have to have 3rd party insurance in place, section 144 of the RTA only refers to doing this for a vehicle and not a fleet of vehicles.
If it's £500,000 for each vehicle, I can't see it being done by many companies, especially if they have dozens or hundreds of motors.

£500,000 doesn't seem a great deal of money to cover 3rd party risks for a large fleet as the losses from a single accident could easily exceed this if there are multiple fatalities involved.