Auxillis/Principia Law and Car Hire Dispute

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cejsquash said:

1. A driver holds an insurance contract/policy with an insurer, but yet the insurer seems to delegate any further action to a third party legal firm, and then asks the driver to collaborate/sign to proceed with legal action against a third - at fault - party.

Your insurer is bound by the contract of insurance that you entered into.

Assuming that you have fully comprehensive insurance, then if you claim under your policy they are required by the contract to either repair your car or pay you the pre-accident value of it, less the excess written into the policy.

They will then attempt to recover what they paid out from the third party, and you are left to try and recover your excess, and any out of pocket expenses yourself, or using the legal cover add-on that you purchased with your policy. You will also lose part of your no claims discount.

If they make a full recovery from the third party, then the claim is classed "non fault" and your NCD will be restored.

If you claim from the third party, either yourself directly or via an Ambulance Chaser, then you won't lose your NCD, your excess won't apply and you might get something extra, like a "free" hire car.

Your insurer likes this because 

1) they get a fee from the Ambulance Chaser for passing you on.

2) they don't have to do any work, so it costs them nothing. (Plus they can reduce the size of their legal department, and claims handling teams)

cejsquash said:

Why is the individual driver beholden to contribute to/support legal action when it's the original insurers (who they're contracted too) versus the third party at fault driver's insurers? 

Because it is you who is taking legal action, because you suffered the loss when the careless third party ploughed into your car. (Plus you ran up that huge Credit Hire bill because you needed a car to replace the one that said careless third party rendered unusable) Your insurer or the Ambulance Chaser is acting on your behalf, so you have to fully support the action.

If you signed up with an Ambulance Chaser that is part of the contract. Fail to do it and they will lose, so they fold and simply pass all their costs back to you, as per the contract that you signed.

If it is your own insurer(because you claimed from them), then they cannot force you to co-operate, but if they lose because you didn't co-operate then they can't recover their outlay, and it becomes an "at fault" claim, and your NCD remains affected. (If they are considerably out of pocket due to legal costs that they ran up thinking that you would co-operate then they may decline to insure you again, or ramp up your premium next year)

The problem as I see it is that insurers are trying to pass any potentially lucrative claims to Ambulance Chasers, rather than doing what you paid them to do, which would ultimately save everyone money and reduce insurance premiums.

(Yes your insurer would have to do more work, and maintain a larger legal team, but when the shoe is on the other foot they would pay out less to third party claims)

MyRealNameToo

cejsquash said:

This is a really useful thread - thanks to all contributors.

We're in the same situation but, what I don't understand, is:

1. A driver holds an insurance contract/policy with an insurer, but yet the insurer seems to delegate any further action to a third party legal firm, and then asks the driver to collaborate/sign to proceed with legal action against a third - at fault - party. Why is the individual driver beholden to contribute to/support legal action when it's the original insurers (who they're contracted too) versus the third party at fault driver's insurers? 

2. Would anyone be prepared to name the insurance company that's insisting on this process please? Ours is Admiral. I acknowledge BethanyD's comment and think it seems a depressing scam from multiple 'agents'

The case is always you -v- the other driver so irrespective of if you claim under your insurance or you use a claims management company you will be contractually obliged to support the insurer/CMC in their attempts to recover the costs from the third party or their insurers (TPI). 

An insurer has more rights than a CMC because they inherit your rights when they pay the claim whereas CMC dont but even though they have your rights they weren't in the car at the time of the accident so if there is a debate on liability they need your cooperation such as providing witness statements or attending court as if all they have is your verbal description recorded when the claim was first logged they will almost certainly lose. 

Failing to do so with your insurers will make it a fault claim as "fault" in insurance terms is nothing to do with blame but purely to do with if they get their money back or not. Obviously in most bases in both scenarios things dont go to court and the TPI pays up after some negotiations. 



2. If we are talking about actual insurers, ie those authorised by the PRA, the Admiral's group of brands are the main firm here. Plenty others however will refer to CMC for credit hire when the insured doesnt have courtesy car entitlement or says the courtesy car isnt appropriate for their needs. 

If you widen it to include intermediaries that sell insurance then lots do. Commissions for selling motor insurance are tiny and the cost of advertising is very high. Secondary income streams are needed either from selling optional extras or selling passing your customers to CMCs in non fault accidents you get informed of. 

Insurers and brokers are far from the only ones doing it, most motor manufactures have a deal with a CMC company and cars they sell come with a flyer for it. Big motor repair firms similarly will suggest you use their recommended CMC firm if you come in for a quote on collision repair. 

A while back some CMC companies were sending blank appointment cards to GP surgeries to use for free which had their advert on the back but a stop was put to that one. 


At the end of the day it's not a scam, like most things in life there are pros and cons of using a CMC just as there for the insurer recommending them. Admiral absolutely will allow you to claim off of your own insurance rather than using their preferred CMC firm but they rightfully point out that means you will have to pay your excess, may or may not have a car whilst yours is in for repair and it will count as a fault claim until they are reimbursed by the TPI. 

These are not unique facts to Admiral, its the standard way insurance has worked, just Admiral use them as a method of encouraging the alternative of CMC where there is no excess, you will get an appropriate replacement vehicle and at no point a fault claim on your policy. 


The main advantages to an insurer is firstly they can only recover the allocated expenses on claims, they cannot recover the unallocated expenses like the rent on their offices, staff wages, IT systems etc. I dont know the commercial arrangement with the CMC but inevitably there is some form of benefit they get for the referral; this could be a straight forward per referral commission but it could also be a discounted rate for hire cars provided to their own policyholders or discounts when the CMC is representing a third party against Admiral