WA Car Insurance Won't Payout Until Excess is Paid?

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Leigh1967

Member
8 March 2018
3
0
1
My partner was recently sideswiped on the road by a commercial vehicle (tree lopping contractor), all caught on Dashcam so the fault was obvious. Damages to his car was assessed and claimed and accepted by the at fault party's insurer. Now the car insurance is withholding payout, stating that they can't pay out until the at fault insured pays the excess. Is this legal and what avenues in WA are there to force the insurance company to pay the agreed settlement amount?

Why should the 'injured' party be made to wait for the insurance company to receive the excess payment from the 'guilty' party? How do we escalate this and force the insurance company (CGU Insurance) to cough up so repairs can be made to the damaged vehicle? Which WA insurance governing body do we refer this to? This is on going now for nearly 2 months!

Impact:

Post Impact:
 

Zerojay

Well-Known Member
12 March 2017
95
12
319
Hi Leigh.

This situation is not uncommon.

I assume you are not insured for your own damage and your car is still roadworthy.

Normally CGU will pay the full amount once either they receive the excess from their policyholder or they have authorised repairs to the insured vehicle. In this case the tree lopper may have little damage to his sturdy trailer, or the trailer may not be insured and so is claiming just for your damage costs. Liability rests with the vehicle driver and therefore the vehicle insurance should respond.
Yes, from your perspective it is unfair that you have to wait for the tree lopper to pay the excess.

His delay may be for a variety of reasons - the most common being that it has a low priority for him. You may be able to change this by speaking to him or sending a letter of demand to him (not his insurer) explainling the situation and threatening legal action if he does not come to the party quickly. He may even be unaware you are uninsured and that he his holding up your repairs.

You can also request CGU pays the cost of your repairs, net of the excess now, and leave it to you to recover the excess yourself. They should agree as this is an easy way out for them. CGU is not obliged to pay the full cost if they have not received the excess from its policyholder.

You may also, if you are uninsured for your loss, lodge a complaint against CGU with the Financial Services Ombudsman (FOS) which can force CGU to pay you your repair cost but again, only net of the excess. FOS cannot take action for you against the tree lopper for the excess.

Keep in mind that you will be entitled to a hire car when your vehicle is in the repair shop and CGU will cover reasonable hire costs and/or taxi expenses.

Good luck.

I do not give legal advice, just an opinion based on 20 years experience working for an insurance company.
 

ingraham

Member
9 May 2018
2
0
1
Hi Leigh1967, do you have any status update that you can share?

I'm in a similar situation. I was involved in 5-cars accident 3 months ago that resulted in my car being a write-off. The accident was not my fault. I have only Third Party Insurance and am liaising with the Driver-at-fault's Insurer myself.

In one of my calls with the driver-at-fault's Insurer, they seem to accept the claim for my car and I'v even provided my Bank Account number to them. After several weeks of silence, I called the Insurer again and they claimed that they have additional questions for the driver-at-fault and they've been unable to reach him.

So they are not paying anything until they hear from the driver-at-fault. The Insurer was not willing to share what they need from the driver-at-fault. Right now, I'm thinking of lodging a complaint with the Financial Ombudsman services.
 

Leigh1967

Member
8 March 2018
3
0
1
Hi Ingraham.

The matter was resolved when the driver's employer and insured party was provided with the dash cam evidence and a threat to go to civil court. You may wish to progress it as a civil claim. I would also be pestering the insurance company on a regular basis pushing them to resolve the matter.

If they have admitted that they are liable, the only issue they will probably have is with getting the excess off the insured at fault party. You can offer to accept the agreed payout, minus the excess and take the driver to court to recover the excess amount at a later date.
 

Clancy

Well-Known Member
6 April 2016
973
69
2,289
I had no idea insurance was so fragilely dependent on the co-operation of the at fault driver? What happens if the at fault driver runs off to Tibet and becomes a monk? Or goes bankrupt and cannot ever pay the excess?

Your own third party insurance will typically cover you against the uninsured, but in the case where they are insured but cannot or will not co-operate, then your screwed?

Better to hope the people who hit you are not insured then.
 

Zerojay

Well-Known Member
12 March 2017
95
12
319
Mostly there is not a problem with the excess. If there is because the at fault driver is dead or cannot be located then section 51 of the Insurance Contracts Act comes to your rescue and the insurer must pay, but net of the excess. If the insured driver is around but does not or cannot pay his excess, then the insurer should still pay you, but again net of the excess.

Bear in mind that other costs such as towing and car hire are not covered by the uninsured driver benefit included in third party only cover, which is also limited to $5000. These additional costs and any repair costs above $5000 will be paid by the other driver’s insurance.

But Clancy is correct, under an unusual set of circumstances, you may be better off being hit by an uninsured driver if you have third party only cover.