Uninsured Losses: What to Know After an Accident

Understanding Uninsured Losses After a Car Accident

Being involved in a car accident is a stressful experience, and the situation can become even more complicated if the other driver is uninsured, untraceable, or refuses to provide their details. In such scenarios, you might find yourself facing costs that your own insurance policy doesn't cover directly. These are known as uninsured losses, and understanding them is crucial to ensuring you're not left out of pocket. This guide will walk you through what uninsured losses entail, how to make a claim, and what steps to take to get back to normal as smoothly as possible.

What Exactly Are Uninsured Losses?

Uninsured losses refer to financial costs you incur as a result of a car accident for which you cannot recover compensation from the at-fault driver's insurance. This typically happens when the other driver has no insurance, their insurance details are invalid, or they abscond from the scene without providing information. Even if you have comprehensive insurance, your insurer might not be able to recover the costs from the other party, especially if they are uninsured.

Examples of common uninsured losses include:

• Excess on your policy: The amount you pay towards your own insurance claim.
• Loss of earnings: If you're unable to work due to injuries sustained in the accident.
• Alternative transport: Costs for hire cars, taxis, or public transport while your vehicle is being repaired or is a write-off.
• Personal injury: Medical expenses, rehabilitation costs, and compensation for pain and suffering.
• Damage to personal belongings: If items in your car were damaged during the accident.
• Towing and storage charges: Costs associated with moving and storing your damaged vehicle.

Your Responsibilities After an Accident

Regardless of whether the other driver is insured, it's vital to follow specific steps at the scene of an accident to protect your interests:

• Don't admit fault: Avoid admitting liability at the scene, as this could be used against you.
• Exchange details: Get the name, address, phone number, and insurance details of all other drivers involved. Crucially, also obtain their vehicle registration number.
• Identify witnesses: Note down the names and contact details of any independent witnesses. Their statements can be invaluable.
• Notify your insurer: Inform your insurance company about the accident as soon as possible, even if you don't intend to make a claim. This is often a condition of your policy.
• Document everything: Take photographs of the accident scene, vehicle damage, and any injuries if possible. Keep records of all communication and expenses incurred.
• Show insurance certificate: If someone is injured, you must show your insurance certificate or cover note to the police. If you can't at the scene, take it to the police station within seven days.

Making a Claim: Comprehensive vs. Third Party Insurance

If You Have Comprehensive Insurance

With comprehensive cover, you can claim for repairs to your own vehicle from your insurer. However, if your insurer cannot recover the costs from the at-fault, uninsured driver, you might lose your no claims bonus. Fortunately, you can still pursue a claim for your uninsured losses directly from the at-fault driver or their insurer, if they can be identified and traced.

To claim for uninsured losses:

1. Gather evidence: Keep all receipts and documentation related to your losses, such as repair estimates, hire car invoices, and medical bills.
2. Minimize losses: Ensure that any expenses incurred are reasonable. For example, a replacement hire car should be of a similar standard to your own damaged vehicle.
3. Contact the other party: You can write to the other driver or their insurer directly, providing full details of the accident and your claim.
4. Use your insurer's help: If you used a broker or agent to purchase your policy, they may be able to assist with your uninsured loss claim.
5. Keep copies: Maintain copies of all correspondence and documents for your records.

If You Have Third Party Insurance

If you only have third party insurance, you cannot claim for damage to your own vehicle from your insurer. You must claim directly from the other driver. If they are found to be at fault, their insurer should cover your losses. If they deny responsibility or are uninsured, you'll need to pursue them personally.

When claiming from the other driver:

1. Send a letter of claim: Formally notify the other driver in writing, detailing the accident and your claim.
2. Inform your insurer: Let your own insurer know that you are pursuing a claim against the other party.
3. Check for insurance: You can ascertain if the other driver is insured by contacting the Motor Insurance Database (MID).

What if the Driver is Uninsured or Unidentified?

If the driver at fault is uninsured or cannot be identified (e.g., a hit-and-run), you may still be able to make a claim. If you have comprehensive cover, you can claim under your own policy. Additionally, the Motor Insurers Bureau (MIB) plays a vital role here. The MIB has agreements with the government to compensate victims of uninsured and untraced drivers. You can claim directly from the MIB, provided certain conditions are met. This includes situations where the uninsured driver may have broken their policy terms.

Important Note: You generally cannot claim from the MIB if you were a passenger in an uninsured vehicle and knew, or ought to have known, that the driver was not insured.

Your Vehicle: Repairs and Write-Offs

Your insurer will likely want to inspect your vehicle before authorising repairs. They may stipulate using an approved repairer or require you to obtain estimates first. If repairs make your vehicle better than it was before the accident, you might have to contribute to the cost.

When Your Car is a Write-Off

If the cost of repairs exceeds a significant percentage of your car's market value, your insurer may declare it a write-off. In this case, they will offer you the market value of the car at the time of the accident. Typically, the insurer will then take possession of the damaged vehicle. However, you can negotiate to keep it. If you do, the salvage value of the car will be deducted from your settlement amount.

If you disagree with the offered settlement amount:

• Provide evidence: Supply your insurer with proof of your car's higher value, such as recent valuations or advertisements for similar vehicles in your area.
• Independent valuation: Consider paying for an independent valuation from a qualified engineer.

Your insurer needs your consent to send a written-off car to a scrapyard. If they dispose of it without consent, you may be entitled to claim the salvage value.

Special Considerations for Older Cars and Minor Damage

For older vehicles with minor damage, you might decide it's not worth claiming on your insurance if there's a risk of the car being written off. In such cases, you might opt for private repairs. If you do claim and your car is declared a write-off, you can inquire about the insurer's write-off threshold (e.g., repairs costing 60% of the car's value).

Negotiating with your insurer might also help avoid a write-off. You could try to agree on a higher valuation for your car or find a garage that can perform repairs at a lower cost than the insurer's approved garage. Any agreement for repairs at an alternative garage will require the insurer's prior approval.

Recovering Specific Uninsured Losses

Loss of Use of Vehicle

If your car is off the road, you can claim for 'reasonable' hire charges for an alternative vehicle, public transport costs, or general damages for inconvenience. Always ensure hire charges are at market rates and for a vehicle of a similar class to your own. Claims should not extend beyond the time reasonably needed for repairs or replacement.

Towing and Storage Charges

Your insurer will typically cover reasonable towing and storage charges if you're claiming from them. If claiming from the other party, these charges may not be recoverable if there's an unreasonable delay in repairs or salvage disposal.

No Claims Discount

A no claims discount is usually not recoverable. However, if you successfully recover uninsured losses on a full liability basis (meaning the accident was not your fault), your own insurer might reinstate your discount.

Clothing and Personal Effects

Keep any damaged clothing or personal items for a reasonable period after the accident. You'll need receipts to support your claim, but if you don't have them, provide an estimate of the date and purchase price. You can claim the value of the items at the time of the accident, which might be less than the replacement cost.

Emergency Treatment

Any bills for emergency treatment provided at the scene or immediately after should be passed to your insurer for payment. These are statutory charges and won't affect your no claims discount.

Personal Injury and Loss of Earnings

Claims for personal injury or death are complex and often require expert legal advice. Seek legal counsel immediately if you or someone else has been injured in an accident.

Frequently Asked Questions

Q1: What is the Motor Insurers Bureau (MIB)?

A1: The MIB is a body that compensates victims of uninsured or untraced drivers in the UK. They work with insurers to ensure that victims are not left without recourse.

Q2: Can I claim for a hire car if my car is being repaired by my insurer?

A2: If the accident wasn't your fault and the other driver is insured, their insurer may provide a replacement vehicle. If the other driver is uninsured, you may need to use a credit hire company or claim costs from your own insurer, depending on your policy terms.

Q3: What happens to my no claims discount if the other driver is uninsured?

A3: If your insurer cannot recover costs from the uninsured driver, you may lose your no claims discount. However, if you recover uninsured losses from the MIB or the other party, your insurer might reinstate it.

Q4: How long do I have to make a claim for uninsured losses?

A4: There are time limits for making claims, often referred to as the 'statute of limitations'. For personal injury claims, it's typically three years from the date of the accident. For other losses, it's usually six years. It's always best to act promptly and inform your insurer immediately.

Q5: Can I claim for damage to my car if it's an older model and has minor damage?

A5: You can choose not to claim if the damage is minor and you fear your car might be written off. You can get it repaired privately. If you do claim, you can negotiate with your insurer to try and prevent a write-off, perhaps by agreeing on a higher vehicle valuation or a cheaper repair cost.

Conclusion

Navigating the aftermath of a car accident, especially when the other party is uninsured, can be challenging. By understanding the concept of uninsured losses and following the correct procedures, you can effectively pursue compensation for costs not covered by your own policy. Always prioritise safety, document everything meticulously, and don't hesitate to seek advice from your insurer or legal professionals when needed. The goal is to restore you to the position you were in before the accident occurred.

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