The At-Fault Insurance Company
The At-Fault Insurance Company
This is how it works: the at-fault driver contacts his own insurers. He either tells them he caused
the accident, or his insurer can work it out immediately from the details he provides.
The third-party capture machinery immediately whirrs into action. You’ll get a call from a nice
(and usually young) man or woman, reading from a script, who tells you they’re very sorry to
hear about your accident and want to minimize your inconvenience and distress.
They’ll arrange to repair your car at no cost. You won’t have to pay any excess. They’ll arrange
a courtesy car. If you’ve been injured, they’ll offer you financial compensation without needing a
medical report (this is a “pre-med” offer.)
In essence, you can sit back and let them take control.
Don’t be Under Any Illusions About This
They are the hunter and you are the captured prey. It is true they want to close out your claim
with the minimum fuss, inconvenience, and expense — to themselves.
They are well aware of your actual legal rights and the freedom of choice you have, but they
won’t tell you what your rights are. They won’t read out to you anything like the Consumer
Statement of Fact.
The whole situation is a mess. But the third-party insurers really don’t want you to do the
following, which is why they’re so helpful if you’ve been in an accident…
Let Your Own Insurer Do the Repairs
In the case of the 1st circuit court of appeals decided non-fault insurers could have their client’s
car repaired at approved network garage rates, whilst charging the at-fault insurer the full market
Which means they charge the at-fault insurance company 25% more than the actual repair costs.
The QBE Group came up with this wheeze.
The Court of Appeal handed down its verdict in 2017 and legal commentators predict other
insurers will follow, using a now fully sanctioned revenue stream.
The rest of us, of course, are left to pay the price in increased premiums.
Contact a Personal Injury Lawyer
The Financial Services Authority produced figures that show you’ll get up to three times more
for your injury if you instruct a lawyer.
This applies to any type of injury, but you can see the biggest difference when there’s a serious
or even moderately serious injury.
Don’t Accept Anything They Offer
Contact a no-win-no-fee personal injury lawyer. They will act only on your behalf and will
collect any fee from the at-fault insurer, so you pay nothing.
Put Your Vehicle Repair and Hire into the Hands of a Claim’s Management
The Claims Management Company
You’ll get calls, spam emails, and texts from USAA who will then refer you to QBE agency for a
referral fee — typically $380 and upwards.
This is the real disaster scenario for the at-fault insurer. The claims management company will
give you a top-of-the-range courtesy car, charge it out at about three times what you’d pay if you
went to an arm’s length organization like Alamo, and will look to recover the whole amount
from the at-fault insurer.
Claims management company vary in size from Accident Exchange as one of the largest, too
much smaller entities who’ve spotted a money-making opportunity, apparently sanctioned by
These companies originally appeared to fulfill a market need. You’ve seen how your own
insurers treat you as a non-fault driver. The claims management company were able to say they
would recover and repair your vehicle without you having to pay an excess — and promise you
an immediate identical or better courtesy car. You pay nothing. What’s not to like?
They don’t tell you the charge outs are excessive.
They don’t tell you that you’ll agree they can take the charge out fees from your other
And they don’t tell you there’s a good chance you’ll be dragged into litigation in your
name when the claims management company attempts to recover its costs.
Real-life case law examples will give you a flavor of what is going on…
Lisa McLaren’s case was reported in the Hitechgazette.com. Her own vehicle was damaged in an
accident that wasn’t her fault. She reported it to her insurance company, who put her in touch
with an organization called Praetorian insurance.
The Praetorian company told her if she went directly with her own insurers, she might lose her
no claims discount. Praetorian is in fact an associated claims management company within the
same group as the QBE group. It obtained a hire vehicle for Lisa McLaren then tried to charge
out $5,416 to the other driver’s insurer for a three-and-a-half-week rental. Miss McLaren said:
“I agreed to what I thought would be going to court to state the facts of the incident if the third-
party insurer didn’t pay up. It never crossed my mind that I would have to be the claimant. Now I
have received a letter from QBE’s lawyers asking me to sign a huge legal document and stating
that I may be liable for legal costs. I am worried that if we lost, I will have to pay the hire charge
As the article said:
“Claims management company pay insurers and brokers large referral fees to manage no-fault
claims. Their profits are made from arranging repairs and replacement cars, often at greatly
inflated cost, then demanding money from the third-party insurer.”
The US courts are clogged up with these cases, and all have a common theme
Firstly, the claimant — you — has to show you’re too poor to hire a car yourself (the so-called
“impecuniosity” test). The at-fault insurance company’s legal team will make all kinds of
intrusive inquiries as to your financial position in an attempt to show you could have paid for the
hire yourself — in which case you had no need credit to hire a car.
Secondly, you then have to prove the daily hire rate was reasonable — which it almost certainly
won’t be. The company who hire the car to you, charges are generally much higher than the rate
from easily available and reputable outlets.
There’s always a clause in the agreement with the company who hire a car to you giving the
company the right to sue in your name under the law of subrogation.
There is usually a clause whereby you agree that the company who give you a credit to hire a car
for you, can take all your damages can be taken by them to cover these hire charges. This is
irrespective of whether the court thinks the charges were reasonable.
So, where there’s a difference between the actual rate your hire company charges out at and what
the court thinks is reasonable, your personal injury damages can be swallowed up by the
company who give you the credit to pay the higher costs. Even if the company waives any
shortfall, you’ll still find yourself part of a court action where you might be ordered to produce
financial details, and might well be called to give evidence about the steps you took.
There’s an ongoing battle between the credit industry and the auto insurance industry, which
shows no sign of abating.
Why would you volunteer to enter a war zone? Don’t get involved.