Ten Insurance Categories to Take into Consideration

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1 – Broker: You may think the other driver has given you their insurance details — but actually they inadvertently gave you their broker’s details. A broker is someone who arranges insurance, not the actual insurer. Brokers usually have physical shop premises. They have access to a wide choice of products from most of the insurance companies. They can give advice on who to choose from their knowledge of the insurance market. Brokers arrange insurance for all kinds of things including property, contents, and flood damage as well as motor insurance. Telling you the identity of a broker doesn’t satisfy the law (if you’ve been in an accident where you need the information). But if you get in touch with their broker, they’ll normally help you trace the actual insurer.


2 – Categories of repair: After your car is damaged, your own insurer or the at-fault insurer may ask an engineer to examine it. The car will then be allocated into one of four categories.

2a – Category A cars: these are so badly damaged they must be scrapped with very little salvage value.

2b – Category B cars: these must also be scrapped and can’t go back on the road. The body shell must be crushed.

2c – Category C cars: If your vehicle is badly damaged the insurers will assess market value at the time of the accident. They’ll send out an engineer to examine and value it. They are supposed only to agree a write off where the car is “uneconomic” to repair. Whilst you may think that means the repaired value is less than the cost of the repairs, that’s not how it works. Even where repair costs are only 50% of the vehicle’s value, the insurers may still wish to treat it as a write-off because they’ll factor in all the administrative expenses of repair. If you’re claiming via your own insurers you have to accept their valuation. If you are claiming against the at-fault insurer there’s nothing to prevent you having the car repaired if that’s what you want. But if the repair costs more than the value of the car you’ll have to make up the difference out of your own pocket. If it’s a Category C repair it will probably need a new MOT certificate before you can put it back on the road.

2d – Category D cars: these are the least damaged category. The insurers will agree a value with you, and will also put on a salvage value. You can either take the insurer’s cheque for the value of the car less the salvage, keep the car and have it repaired yourself, or accept the insurer’s cheque in total and let them keep the salvage.


  • Courtesy cars: Most insurers will provide a courtesy car whilst your car is being repaired, but not where the vehicle is written off. If you’re accepting the write-off value of the car, you’ll have to replace it within a few days of receiving a cheque for its value. If the accident was not your fault you should be able to hire a comparable vehicle and recover the cost of hire from the at-fault insurer. If the at-fault insurer treats your car as a write-off and sends you a cheque, they’ll insist you buy a replacement immediately and will stop any courtesy car provision after four days.


  • Certificate of insurance: This is the document your insurer must give you by law. They can now send it to you electronically. If you have to give your insurance details to the police, the insurance certificate is what they’re after — either in person, or electronically. Each certificate has a unique policy number and shows the car registration number and the details of the policyholder and any named drivers.


  • Claim for personal effects: You’re entitled to claim damages for loss of personal items caused by the at-fault driver. Where the items can be repaired — for example, if the lenses only in your varifocal glasses were damaged — you can claim for the repair cost, not a replacement. Some items that have been in accidents, like a child’s car seat or motorcycle helmet, must be replaced and you’re entitled to the replacement cost. You may also have a personal effects clause in your own policy, generally up to a maximum of $400 or so.


  • Claim number: After your insurance company has been in touch with the at-fault insurer, they’ll give your accident a claim number. Make a note of it, because insurance companies are paperless these days. If you’re in any correspondence or telephone conversation with them you should quote their claim number.


  • Claims Management / Accident Management Companies: Your insurers or other organizations may attempt to steer you to a Claims Management / Accident Management Company. These companies pay a referral fee to insurance companies for your business. They arrange for your vehicle to be repaired and also a replacement hire car. They’ll almost certainly send you to a credit hire organization such as Accident Exchange or Helphire. Steer well clear of them.


  • Comprehensive insurance policy: This is now the most common kind of motor insurance policy (90% of all policies are comprehensive). You’ll sometimes hear it called “fully comprehensive” (a tautology) but that’s not what it’s actually called. A comprehensive policy covers damages and losses to third parties, which is the minimum third-party legal requirement under the Road Traffic Act. It also a “first party” policy which covers your own losses when you’re the driver at fault. Depending on the terms of the policy, there may be other named drivers who are permitted to drive your vehicle — and you may be able to drive other vehicles as well (but there are restrictions).


  • Contents of your insurance policy: Your insurance agreement is a legal contract. You enter into it by giving the insurance company details about yourself in a formal application form, then a telephone conversation with an insurance agent or broker. The insurer then sets the premium for you to accept, and your agreement is constituted by offer and acceptance. Your insurer will send you documentation containing terms and conditions — or they may point you towards a website. The certificate of motor insurance, the motor policy schedule, and sometimes a car insurance guide comprises the contractual terms of your insurance cover. You should read them! It’s a good idea to keep a copy of your insurance company in your glove compartment.


  • Credit Hire Companies: These companies started to appear in the early 1990s. They manage no-fault accident claims and get your car repaired without payment of excess, and also provide you with a high-quality replacement vehicle. They pay significant referral fees to insurers, Bodyshop and garages who will steer you towards them in return for that referral fee. The bills for the credit hire and credit repair are all in your name, and you will bear the ultimate responsibility. These bills are exorbitant, well above the market rate. As a result, many non-fault insurers will (understandably) resist payment. Avoid credit hire like the plague. At best you may find yourself personally involved in a litigation claim which has really nothing to do with you. At worst you may be responsible for all the bills the credit hire agency has run up in your name. See Chapter 5 for more gruesome details.
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