Insurance companies paying out 3rd party

rowanh

I have been told by several people that insurance companies will always pay out 3rd party claims in an accident even when the insurance is in some way invalidated. For example where someone was not 100% honest on their policy or if the driver was drunk or the car not road worthy etc. Does anyone know how true this is, i presume there are limits to it or are they obliged to bar some specific circumstances?

Del2005

rowanh wrote: »

I have been told by several people that insurance companies will always pay out 3rd party claims in an accident even when the insurance is in some way invalidated. For example where someone was not 100% honest on their policy or if the driver was drunk or the car not road worthy etc. Does anyone know how true this is, i presume there are limits to it or are they obliged to bar some specific circumstances?

The innocent, 3rd, party never should never loose out because someone broke the law. So the 3rd party will be covered.

The point that people leave out is that the insurance company can come after the "insured" person for all monies paid out. This is a civil mater so the burden of proof lies more to the person, proving they where legal, than the insurance company.

MugMugs

rowanh wrote: »

I have been told by several people that insurance companies will always pay out 3rd party claims in an accident even when the insurance is in some way invalidated. For example where someone was not 100% honest on their policy or if the driver was drunk or the car not road worthy etc. Does anyone know how true this is, i presume there are limits to it or are they obliged to bar some specific circumstances?

Hi OP.

The Third party is not at fault for any false declerations made by the Insured at the time of the accident. Whilst the Insurer may refute any claims to the Insured's vehicle they cannot do the same for any Third Parties or Injured Parties.

This operates under what is known as "Insurer Concerned" The Insurer would must treat all Third Party claims as they would have if the Insured had no indemnity issues. They are required to do so under the Road Traffic Act 1962 (forget the section)

The Insurer can then "attempt" to recover their outlay from their client. Nine times out of ten though, they dont actually bother. Reason for this would be a complete lack of assets. ie: Insured has written off car. House if any probably has their Mortgage holders name noted as having an interest etc etc... It's very much so case by case when it comes to recovery.

Del2005

MugMugs wrote: »

The Insurer can then "attempt" to recover their outlay from their client. Nine times out of ten though, they dont actually bother. Reason for this would be a complete lack of assets. ie: Insured has written off car. House if any probably has their Mortgage holders name noted as having an interest etc etc... It's very much so case by case when it comes to recovery.

That's part of the problem, generally people driving without insurance have no assets, so there's no real punishment for the crime. There should be a lien on their wages or dole till the money is recovered, even if it takes all their life. But I suppose some would say that's not fair but they decided to break the law and should live with the consequences. A driving ban is on no concern to them as they where never legally driving.

MugMugs

Del2005 wrote: »

That's part of the problem, generally people driving without insurance have no assets, so there's no real punishment for the crime. There should be a lien on their wages or dole till the money is recovered, even if it takes all their life. But I suppose some would say that's not fair but they decided to break the law and should live with the consequences. A driving ban is on no concern to them as they where never legally driving.

Whilst I agree with the principal and would love to see it's enforcement I think there would have to be limits.

If the Central Bank of Ireland's CPC was fully adhered too then I would have no issues however if it was a genuine mistake that led to the Non Disclosure it could be a harsh punishment.

But if it was enforced for failure to disclose Endorsments or for Drink Driving causing harm etc, I would completely agree. The added benefit of this would also be reduced premiums (if they were passed on) to us, Joe Soap who pay excessive premiums as it is.

si_guru

Del2005 wrote: »

A driving ban is on no concern to them as they where never legally driving.

I agree.. I have to laugh (ironically) when I read in the 'paper that a driver was stopped for essentailly no docs whatsoever then he/she is given a tiny fine (no traceable assets or income) and a driving ban... They don't care they will continue to drive illegally!

Immediate roadside (Judge Dredd style) execution would be too good for them. ...IMHO.

Del2005

MugMugs wrote: »

Whilst I agree with the principal and would love to see it's enforcement I think there would have to be limits.

If the Central Bank of Ireland's CPC was fully adhered too then I would have no issues however if it was a genuine mistake that led to the Non Disclosure it could be a harsh punishment.

But if it was enforced for failure to disclose Endorsments or for Drink Driving causing harm etc, I would completely agree. The added benefit of this would also be reduced premiums (if they were passed on) to us, Joe Soap who pay excessive premiums as it is.

What is the Central Bank CPC?

No one mistakes getting into a car they aren't insured to drive.

Insurance companies have to be informed if any material facts have changed. If the insurance company decides to void the policy they should complete the process and recoup the costs. They have to take the person to court to get a judgement to recoup the costs, so people will have a chance to prove they made a genuine mistake.

Don't forget that letting people off is adding a large percentage to ALL LAW ABIDING motorists policies and provides no deterrent to the people who drive illegally as all they loose is a car, which can be replaced cheaply.

MugMugs

Del2005 wrote: »

What is the Central Bank CPC?

No one mistakes getting into a car they aren't insured to drive.

Insurance companies have to be informed if any material facts have changed. If the insurance company decides to void the policy they should complete the process and recoup the costs. They have to take the person to court to get a judgement to recoup the costs, so people will have a chance to prove they made a genuine mistake.

Don't forget that letting people off is adding a large percentage to ALL LAW ABIDING motorists policies and provides no deterrent to the people who drive illegally as all they loose is a car, which can be replaced cheaply.

CPC is the Consumer Protection Code which states that the Insurer must be confident the Insured was being dishonest intentionally.

I really hope you never forget to disclose penalty points or other "ininor" motor issues you may have.

Del2005

MugMugs wrote: »

CPC is the Consumer Protection Code which states that the Insurer must be confident the Insured was being dishonest intentionally.

Thanks, but that's why they need to go to court to get any money back to ensure that both parties play fair.

I really hope you never forget to disclose penalty points or other "ininor" motor issues you may have.

I told them when I got points. I don't see the point in paying out a large amount of money to get past Garda checkpoints.