Conflict of Interest?

Apfelbaum

I was recently involved in an accident for which the other driver has admitted liability.

It turns out that we are both insured with First Central and it is my understanding that they have an obligation to treat each driver as if they were insured by two different companies.

However on the occasions I have telephoned to ask for advice or help from them as their customer they have always put me through to the third party team (ie effectively the other party's insurer). 

I have therefore been unable to get proper help or advice as a customer.

Initially the third party team wrote my vehicle off based on photographs but then said I could get quotations from independent repairers and send them the estimates. Which I did.

They then agreed to pay the submitted costs but told me that as soon as they paid me, I would have to give up the hire car they had provided. I requested that they did not pay me and that I would pay out of my own pocket and claim the money back as I believe, since I am the innocent party. However I was given no choice. It was effectively "take it or leave it".

I subsequently telephoned First Central and made it clear I was phoning as a customer, not a third party. But, once again, I was passed straight to the third party team (ie once again to the other party's insurers) where I was told "we cannot provide you with a hire car". 

When I pointed out that I was calling as their customer and that Conflict of Interest rules should mean that they are not allowed to use the word "we" (They would not say this if the insurer were Direct Line or Churchill, and it is my understanding they cannot say it even if I share the same insurer as the other party).

I also pay First Central additionally for Legal Expenses cover which explicitly states that they will assist in claiming the cost of a hire car as an uninsured loss. However, First Central have point-blank refused to pursue this on my behalf.

I have taken every possible step to mitigate third party costs. I have replied immediately with information. I arranged for my car to be with the repairer at the earliest opportunity. Looking at my car, I could easily have made a convincing, spurious claim for physical injury but I did not and yet now, for reasons entirely beyond my control, I am having to pay for a hire car out of my own pocket.

Where exactly do I stand on this matter, particularly with regard to the, at present, unwanted payout for repairs to my vehicle? Is this a "get-out" for the insurer or should they have properly advised me so that I am not, as their customer, put at considerable detriment?

Thanks in advance for any advice. x

cw8825

What is it exactly you’re expecting from them?
if the third party agrees to pay you out then yes the hire car needs to go back. 

They will be unwilling to push you into the legal cover route because they would essentially be pursuing themselves which makes no sense.

It appears like they believe the car is beyond economical repair but will bay you the cash value of the repairs. At that point they liability to you is covered so will take away the car and it is then down to you to either repair the car or replace it. 

DullGreyGuy

Apfelbaum said:
When I pointed out that I was calling as their customer and that Conflict of Interest rules should mean that they are not allowed to use the word "we" (They would not say this if the insurer were Direct Line or Churchill, and it is my understanding they cannot say it even if I share the same insurer as the other party).

It's a complex issue, and one the FCA has shown a lot of interest in in recent years. Ironic you mention DL and Churchill given they are equally the same company in recent years and sister companies for many years before.

Ultimately any "blue on blue" claim needs to be dealt with at an arms length basis. Your situation is more blurred given First Central isn't and insurer but a middleman so whilst you share the same intermediary you may have different insurers. 

We are ultimately humans and we fall into patterns. Back in my claim days the rules were simple... the handlers had to be in different offices, we couldn't access (by process rules not IT limits) the other party's file but we should send internal memos rather than posting letters to each other. Language may fail occasionally but it was still someone in another office -v- me and I still wanted to win.

In the first instance, what is the stance on liability? Sounds like the third party has conceded liability?

If they have paid cash in lieu of repairs then the right to hire car ends on payment. If they have written off the car then your hire ends 7 days after payment is received. If they are paying for it to be repaired then hire ends when the car is repaired. 

Do you have legal expenses cover on your insurance? 

Apfelbaum

cw8825 said:

What is it exactly you’re expecting from them?
if the third party agrees to pay you out then yes the hire car needs to go back. 

They will be unwilling to push you into the legal cover route because they would essentially be pursuing themselves which makes no sense.

It appears like they believe the car is beyond economical repair but will bay you the cash value of the repairs. At that point they liability to you is covered so will take away the car and it is then down to you to either repair the car or replace it. 

What I'm expecting from them is that they comply with their regulatory obligation to take every possible step, not only to avoid conflict of interest, but not act in a way would could be SEEN to be a conflict of interest.

This would involve them acting in my interest as their customer, advising me properly rather than behaving entirely as if they were the third party insurer only and properly answering my request to use the legal expenses option which I paid extra for in order to recover my uninsured losses so that I, as the innocent party, am not out of pocket. Or alternatively properly explaining why they are not even considering that option. 

The FCA does not allow them to refuse to invoke my legal expenses policy just because they are also the third party insurer. That is not my fault or my problem. It would be up to them to decide how they go about it. Again not my problem.

Any more questions?

Apfelbaum

DullGreyGuy said:

Apfelbaum said:
When I pointed out that I was calling as their customer and that Conflict of Interest rules should mean that they are not allowed to use the word "we" (They would not say this if the insurer were Direct Line or Churchill, and it is my understanding they cannot say it even if I share the same insurer as the other party).

It's a complex issue, and one the FCA has shown a lot of interest in in recent years. Ironic you mention DL and Churchill given they are equally the same company in recent years and sister companies for many years before.

Ultimately any "blue on blue" claim needs to be dealt with at an arms length basis. Your situation is more blurred given First Central isn't and insurer but a middleman so whilst you share the same intermediary you may have different insurers. 

We are ultimately humans and we fall into patterns. Back in my claim days the rules were simple... the handlers had to be in different offices, we couldn't access (by process rules not IT limits) the other party's file but we should send internal memos rather than posting letters to each other. Language may fail occasionally but it was still someone in another office -v- me and I still wanted to win.

In the first instance, what is the stance on liability? Sounds like the third party has conceded liability?

If they have paid cash in lieu of repairs then the right to hire car ends on payment. If they have written off the car then your hire ends 7 days after payment is received. If they are paying for it to be repaired then hire ends when the car is repaired. 

Do you have legal expenses cover on your insurance? 

Yes I do have legal expenses cover but they are refusing to even consider it. Whenever I have contacted them they have put me through to the third party team. This is despite my pointing out that I am THEIR customer and I want advice and I want them to look after my interests. 

I cannot envisage any explanation for this other than conflict of interest. FCA rules state that not only that they must take steps to avoid conflict of interest and act as if they were two different companies but the have to avoid being SEEN to act in conflict of interest. Which means that even if they can come up with some explanation for how they have acted they would be in breach because who could argue that any reasonable person would not see being put straight through to the third party as a conflict?

I told them specifically I did not want cash in lieu but they paid anyway. Definitely a conflict because I was contacting them for advice as their customer not a third party.

No matter how much I put my devil's advocate hat on and try a search for an explanation, it comes back to the same problem. They simply have not complied. 

cw8825

Apfelbaum said:

Yes I do have legal expenses cover but they are refusing to even consider it. Whenever I have contacted them they have put me through to the third party team. This is despite my pointing out that I am THEIR customer and I want advice and I want them to look after my interests. 

I cannot envisage any explanation for this other than conflict of interest. FCA rules state that not only that they must take steps to avoid conflict of interest and act as if they were two different companies but the have to avoid being SEEN to act in conflict of interest. Which means that even if they can come up with some explanation for how they have acted they would be in breach because who could argue that any reasonable person would not see being put straight through to the third party as a conflict?

I told them specifically I did not want cash in lieu but they paid anyway. Definitely a conflict because I was contacting them for advice as their customer not a third party.

No matter how much I put my devil's advocate hat on and try a search for an explanation, it comes back to the same problem. They simply have not complied. 

It appears you have 2 issues 1 being the settlement and the other being what you perceive to be the conflict. 

you did not want cash in lieu, and also didnt want the car to be written off.
You cannot force them to repair the vehicle if it is uneconomical to do so

Putting the conflict to one side, In terms of resolving the damage/car - What is your desired outcome?

DullGreyGuy

Apfelbaum said:

DullGreyGuy said:

Apfelbaum said:
When I pointed out that I was calling as their customer and that Conflict of Interest rules should mean that they are not allowed to use the word "we" (They would not say this if the insurer were Direct Line or Churchill, and it is my understanding they cannot say it even if I share the same insurer as the other party).

It's a complex issue, and one the FCA has shown a lot of interest in in recent years. Ironic you mention DL and Churchill given they are equally the same company in recent years and sister companies for many years before.

Ultimately any "blue on blue" claim needs to be dealt with at an arms length basis. Your situation is more blurred given First Central isn't and insurer but a middleman so whilst you share the same intermediary you may have different insurers. 

We are ultimately humans and we fall into patterns. Back in my claim days the rules were simple... the handlers had to be in different offices, we couldn't access (by process rules not IT limits) the other party's file but we should send internal memos rather than posting letters to each other. Language may fail occasionally but it was still someone in another office -v- me and I still wanted to win.

In the first instance, what is the stance on liability? Sounds like the third party has conceded liability?

If they have paid cash in lieu of repairs then the right to hire car ends on payment. If they have written off the car then your hire ends 7 days after payment is received. If they are paying for it to be repaired then hire ends when the car is repaired. 

Do you have legal expenses cover on your insurance? 

Yes I do have legal expenses cover but they are refusing to even consider it. Whenever I have contacted them they have put me through to the third party team. This is despite my pointing out that I am THEIR customer and I want advice and I want them to look after my interests. 

I cannot envisage any explanation for this other than conflict of interest. FCA rules state that not only that they must take steps to avoid conflict of interest and act as if they were two different companies but the have to avoid being SEEN to act in conflict of interest. Which means that even if they can come up with some explanation for how they have acted they would be in breach because who could argue that any reasonable person would not see being put straight through to the third party as a conflict?

I told them specifically I did not want cash in lieu but they paid anyway. Definitely a conflict because I was contacting them for advice as their customer not a third party.

No matter how much I put my devil's advocate hat on and try a search for an explanation, it comes back to the same problem. They simply have not complied. 

Looking at the LE section of at least one of their products its a separate underwriter with its own telephone number, you could always cut out 1st Central and go directly to the LE provider

Apfelbaum

cw8825 said:

Apfelbaum said:

Yes I do have legal expenses cover but they are refusing to even consider it. Whenever I have contacted them they have put me through to the third party team. This is despite my pointing out that I am THEIR customer and I want advice and I want them to look after my interests. 

I cannot envisage any explanation for this other than conflict of interest. FCA rules state that not only that they must take steps to avoid conflict of interest and act as if they were two different companies but the have to avoid being SEEN to act in conflict of interest. Which means that even if they can come up with some explanation for how they have acted they would be in breach because who could argue that any reasonable person would not see being put straight through to the third party as a conflict?

I told them specifically I did not want cash in lieu but they paid anyway. Definitely a conflict because I was contacting them for advice as their customer not a third party.

No matter how much I put my devil's advocate hat on and try a search for an explanation, it comes back to the same problem. They simply have not complied. 

It appears you have 2 issues 1 being the settlement and the other being what you perceive to be the conflict. 

you did not want cash in lieu, and also didnt want the car to be written off.
You cannot force them to repair the vehicle if it is uneconomical to do so

Putting the conflict to one side, In terms of resolving the damage/car - What is your desired outcome?

It's nothing to with "force" or "desired outcome".

For a start it's clearly not uneconomical to repair my vehicle because it is being repaired and its book value after repair will still be greater than the unrepaired value plus the cost of the repair.

With regard to outcome, that is simply for me not to be at detriment, either practical or financial, through no fault of my own. That is the purpose of insurance and that is what an insurance policy is obligated to ensure.

cw8825

the insurance policy is there to indemnify you. Which they have by paying you the value of repairs

I know you have said you didn't want cash in lieu but you also didn't want the car to be written off.
The repairs quote you may have got may not be uneconomical, but from an approved repairer, using manufacturers parts, potential delays and the cost of a hire car for you, it all will add up

Apfelbaum

cw8825 said:

the insurance policy is there to indemnify you. Which they have by paying you the value of repairs

I know you have said you didn't want cash in lieu but you also didn't want the car to be written off.
The repairs quote you may have got may not be uneconomical, but from an approved repairer, using manufacturers parts, potential delays and the cost of a hire car for you, it all will add up

I'm not sure what part of that relates to the fact that I have actually not been indemnified or that First Central have acted in a way that could be SEEN to be a conflict of interest (contrary to FCA regulations) and therefore have not advised me as their customer but just treated me as a third party. A situation for which I pay them over £1000 per year, including for legal expenses cover.

MattMattMattUK

Just because you do not like the answer you get, does not mean that answer is wrong.