Scenario: Rear-ended by another driver while stationary at a stop street
- The owner of an insured vehicle has his car rear-ended by another driver while being stationary at a stop street. The vehicle owner is not at fault – the other driver is.
- The other vehicle is also not insured.
- The vehicle owner now has to pay an excess for the repair of his vehicle.
- Who is responsible for claiming the excess paid from the other driver? Will this be communicated to the vehicle owner?
The owners’s insurer, in terms of its rights of subrogation, has the right to make the full recovery back from the negligent driver and make the recovery in its insured’s name. This recovery will also include the excess that its insured had to pay, and they should begin the recovery process as soon as possible. This is stated in the policy but it's good practice for the insurer’s claims staff to communicate this to the insured at the time of the claim. This is done to make sure the insured does not prejudice the insurer’s recovery in any way by doing a private deal for the recovery of his excess. This may endanger his whole claim.
- Will the insurance company claim on behalf of the insured vehicle owner?
Yes. The insuranc company includes the full recovery claim in its recovery claim and not just its own portion, including whatever legal costs may result. The insurer is free, however, to decide if it does not want to make the recovery of the whole claim for whatever reason but then would have to allow the insured to make the recovery if they wanted to.
- If the insurance company does not claim the excess, can the insured vehicle owner do so on his own? When would he be able to do so?
As stated above, the insured would have to first get the consent of his insurer to waive the subrogation clause on the policy, to allow him to make the recovery. It will most likely be because the merits of the claim are tricky and the insurer does not believe it's worthwhile it or the amount to be recovered is so small, it does not justify the cost.
- Is the insured vehicle owner who was not at fault to be penalised with increased premiums after the insurance claim?
Yes. It may happen as many insurers only restore the no claims bonus if a full recovery has been made. Companies that pay out-bonuses will generally not pay because of the claim, no matter whose fault it was.
- Is it possible to use the small claims court in such a claim?
Where the insured is a private individual, the claim is less than R12,000.00 (I think this is the limit) and the insurer has given its consent to the insured to effect his own recovery, the small claims court is the cheapest and most efficient way to go, although there is no right of appeal.
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