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NSW Insurance company wants to tow car away after paying Uninsured Motorist Benefit

Discussion in 'Insurance Law Forum' started by Pyroflamer, 16 May 2018 at 10:11 AM.

  1. Pyroflamer

    Pyroflamer Active Member

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    Hi forums,

    To cut to the chase: I had an accident, my insurer QBE determined it is the third party's fault. However, third party has no insurance, so QBE decides to pay me under their Uninsured Motorist Benefit policy, which is worded as follows:

    i) Up to $5,000, or
    ii) The market value of your vehicle, whichever is less, if your vehicle is accidentally damaged in a collision with another vehicle and we agree that:

    a) The other driver is 100% at fault
    b) The owner of the other vehicle, or its driver, didn't have insurance covering the damage to your vehicle

    If we pay you the market value of your vehicle, then your vehicle in its damaged condition will become our property.

    The market value of my vehicle has been assessed by the insurer at ~$7100. The insurer has agreed to pay me $5000, but says my car needs to be towed away. If I want to keep it, they say they would need to deduct 700$ from 5000$ reflecting the cars salvage value.

    I'm pretty sure the interpretation of the clause means I get to keep my vehicle because the payment of 5000$ is not the market value of my vehicle, which is 7100$.

    Ive been escalating up with my insurer but so far theyre refusing to accept my interpretation.

    What is your interpretation of this? If Im right, what should I do? Can I take my insurer to court?
     
  2. Zerojay

    Zerojay Well-Known Member

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    You are correct. QBE is not entitled to your damaged vehicle or to deduct its salvage value of $700 from a payment of $5000 to you. You should continue to dispute and if QBE does not relent then take the matter to the Financial Ombudsman Service for independent review. The Ombudsman is a free service to you.
    Keep in mind that your financial loss is $6400 (market value less salvage value) plus other costs such as car hire and you are entitled to chase the at fault driver for any shortfall after your insurer’s payment to you.
    I do not give legal advice, just an opinion based on 20 years experience working for an insurance company.
     
  3. Pyroflamer

    Pyroflamer Active Member

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    Hi Zerojay,

    Thanks for your reply.

    At the moment because I still need to rely on my insurer to pursue the 3rd party in court, I don't want to be too insistent and argue with my insurer on this point because I'm afraid they might suddenly decide to stop cooperating / not pay me even the 5000$ that they currently have agreed to. Is that actually possible or am I just thinking too much here?

    And also, the Senior Technical Claims officer has been calling me repeatedly and asking me if I want to have my car towed or keep the car but deduct 700 (i.e. strongly insisting that QBE still is entitled to my car). He is saying that because the term Market Value in their PDS is defined as the 'cash settlement price' of a vehicle , and the 5000$ is the cash settlement price, therefore 5000$ becomes technically the "market value" here. Should I ask to escalate further up? Hes pretty much not going to listen to me and I feel its pointless arguing with him on the phone. At which point should I bring in the Ombudsman if at all? And he keeps saying "so do you want to proceed with your claim or not?" which I interpret as.kind of a threat...
     
  4. Rod

    Rod Well-Known Member

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    lol - you might have a case!

    If the contract is laid out the way you presented it above, then your argument seems sound. It is probably not what they intended, but worth a shot.

    However if the layout of the contract is different then the insurance company may be right.
     
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  5. Zerojay

    Zerojay Well-Known Member

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    The STC officer is wrong and the reasoning given to you is ridiculous. To start with, this person is misquoting the PDS . The correct wording is the “cash purchase price” not settlement price. Also a definition should be used in its entirety, not relying on just a small part of it. Secondly, the suggestion that a policy sub-limit is market value of your vehicle is a nonsense.
    If I was you I would write to QBE stating politely but firmly that you:
    will not accept less than $5000
    keep the damaged vehicle
    are requesting your dispute be escalated
    if QBE does not agree you will take the dispute to the Ombudsman, and also seek compensation for unfair delay in settlement of your claim.(interest and any other expenses you incur due to the delay).

    You can also request QBE to include your uninsured loss of $1400 in its recovery action against the at fault driver.
     
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