Buying Car Insurance - Your Obligations

Yet more 'small print'. This time it is setting out the rules that you must obey to keep to your side of the deal. They tell you that:

You must look after your property properly. You can't expect your insurer to bail you out if you don't.

You must pay the premium when asked for it. Your side of the financial transaction. If you pay by instalments and make a claim, you must pay off the remaining instalments for the rest of the year.

You must report accidents promptly. It is very important that your insurers have the chance to investigate whilst evidence is still 'fresh'. Changes to the civil law took place in April 1999 with the 'Woolf Reforms' and these require insurers to complete investigations very promptly.

Even if your car has not been damaged, you must report the accident. If nothing comes of it, your claim file will be closed without affecting your no claims bonus. So many times car drivers think they can get away with it themselves only to end up with a nasty shock. There are many sharks out there waiting to rip off the insurance industry and you are playing into their hands. That is bad news for you, not your insurers, as your premium (and everyone else's) will go up. So please don't bury your head in the sand, report any accident no matter how trivial you think it is to your insurers immediately.

Remember, when it comes to a third party claim, your insurer is on your side. Your insurer makes the decision on how to pay your claim. For example, by repairing your car.

If there is outstanding finance on the car then your insurer must pay off this debt first when your car is stolen or written off.

You must not pay any third party claim or make any admissions of liability. That is quite difficult to do, I've been there. Accidents put you into a state of shock. So you can't think clearly. But consider this, any comments you make might put your insurers in the position of having to pay the other drivers claim when it wasn't your fault. And that might hit your no claims bonus! It is difficult for them to wriggle out if you say 'I'm sorry'. And you would be surprised how much other people will twist around what you say to their advantage.

Your insurers have the right to stand in your shoes for the purposes of civil court action. This is called 'subrogation' It means they can defend any claim made against you, and use your name in the court proceedings or vice versa - recover from someone else in your name.

Don't worry about it, they will usually talk to you about what they are doing. After all, you are their 'star witness'. But very occasionally I have found some arrogant people who think they know better than the claims professional dealing with the matter on their behalf. Then the condition has to be called into effect. A recent example is a lady who drove out of a side road, across give way lines and collided with a car on the main road. She was adamant it was not there when she moved off - chances are she did not look properly! She insisted on going to court despite the advice of her insurers who wanted to settle the third party claim. Owing to her agressive attitude, they did not invoke this condition but let her go ahead on her own. She lost!

Sometimes insurers are forced by legislation to pay claims that are not covered by the policy. The next condition in the policy allows for this. It will only arise where you have failed to keep to your side of the policy terms and conditions or lied to your insurers when you took the policy out. For example you allow someone to drive your car who is not covered by your policy. They cause an accident and owing to the existence of your policy, legislation forces your insurer to pay the third party claim. They can then ask you to reimburse them.

Then we have cancellation clauses. These set out the rules by which you can cancel your policy and how your insurers can cancel it. You can only ask for part of your premium back if you have not made a claim. You must always send back your Certificate of Insurance. If you don't then your insurer might well remain on risk for third party claims and will not cancel your policy.

Disputes of amounts to be claimed form the subject of the next condition. Usually customers take advantage of the complaints procedure rather than an arbitration service. You must make your car available at any reasonable time for your insurer to inspect it, even if you have not made a claim. For example they might be investigating a possible fraud and want to check out your car. By and large, the only time they will inspect your car is after an accident has arisen or after it is recovered following a theft.

Finally, there is the fraud condition. If you make a fraudulent claim, your policy will be of no effect, and they keep the premium too! So don't do it.

Next..... UK Car Insurance - Policy Add-Ons