You've seen the advertisements for cheap premium car insurance by Insurers Hotline aka Budget Direct. Is the saving worth it or do lower premiums mean lower claims?
One client who had a no-fault claim is out of pocket by thousands. She is stuck in the middle between her insurer, Insurers Hotline, and established insurer, RACQ, the other party's insurer. Each claims they are not responsible for payment of some costs attributable to the accident. Delays by Insurers Hotline, including an astounding 17 day delay before they got around to even assessing the damage to the client's vehicle, meant that the cost of a small hire car was more than expected. It was necessary for the Insurers Hotline client to engage assistance to get something approaching a fair assessment of her cars pre-accident market value and to progress the claim. Click through the correspondence to see what can be expected from cheap premium car insurers when it comes to claim time.
An enterprising solicitor may well perceive more than the basic claim the client has made. If that's you, please email urgently.
Brisbane is the Australian host to a Republic of South Africa based insurer, Auto and General Insurance. The company trades in Australia as Insurers Hotline and as Budget Direct, and underwrites insurance offered by other small companies. See http://www.agic.com.au/about.htm.
Other sites of interest can be found by Google search “Auto and General Insurance “ - sites like http://hellopeter.co.za/comp_comment.asp?cid=30 and http://www.hellopeter.com/the_comment.asp?recid=109299
Can low premium car insurers be believed? Are they worth the risk? After all, we buy insurance to get peace of mind - cover our costs of involvement in a motor accident at a time when we are vulnerable in every way, including financially. Can we really expect equitable treatment from a low premium car insurer when we are hospitalized by an accident, suffering ongoing injuries that compromise our ability to meet the boss’s standards, or need the claim money urgently to make up for loss of income and keep up mortgage payments?
BEFORE THE ACCIDENT
On this website you can read the bitter experience of an extremely careful driver who gambled on low premiums and on not having a serious accident. The white car in the top photo is the wreck of the pristine 2005 Sportivo she pampered since new - after only ten thousand kilometers.
Corporations do not stay in business unless they make a profit. How do low premium companies make a profit? Car insurance is a very competitive business with many players in the market. Established insurers have honed administration costs, improved money management and investment practices, streamlined claim procedures to reduce costs, and have choices of ‘excesses’. To stay in business, insurers run the tightrope between offering competitive premiums, and making enough profit to satisfy shareholders. So what happens if a new company carries the same risk as established insurers (inevitable), has an equally efficient and properly paid staff (inevitable), but offers lower premiums? Either claims are less than for other companies (you lose) or profits are less than for other companies (the shareholders lose). But remember, it is the shareholders, not the policy-holders, who elect company directors. Let’s not kid ourselves that profit will be compromised ahead of claims.
THE ACCIDENT
The insured was involved in an accident, no-fault on her part, and even though she and the other party were fully insured, and even though the other party admitted fault, the Insurers Hotline client has lost a lot of money. The loss means she has not been able to meet on time all other commitments such as mortgage, telephone, power, local government rates, credit cards, etc.
· The accident occurred on 22 July 2007. · The police attended the accident, performed a breath alcohol test (negative) and interviewed both drivers later in hospital. · Insurers Hotline did not assess the damage to the vehicle until 17 days after the accident. · The delay in assessment is one of several delays attributable to insurers that has resulted in: a the insured not receiving from Insurers Hotline, cleared funds for the major part of her claim until 29 August 2007, 37 days after the accident, b the need for the Insured to hire a small vehicle during that period to enable her to resume working in her profession, c the other party’s insurer, RACQ, refusing to meet all the cost of the rental vehicle because it did not contribute to the long delay before assessment, and d the need to engage assistance to get some objectivity into the assessment of pre-accident value of her vehicle, and to progress the claim.
A read of the correspondence will show that the insured always acted promptly and that no delays were caused by her or her assistants.
An enterprising solicitor is needed
The insured cannot pay a solicitor unless all the claimed monies are first covered, and the insured cannot undertake to meet other party costs under any circumstances.
The difficulty is, that the amounts presently claimed, while important to the insured, would not normally be regarded as large enough to justify litigation.
This website copies key correspondence for what should have been a simple no fault claim - the Insured driving down a four lane and a vehicle approaching from the other direction running a red light, attempting to turn in front of her, and ramming her vehicle. The correspondence is lengthy, but necessarily so to address all the issues. Some pages of correspondence have been scanned using OCR and therefore, icons etc are not correctly reproduced.
Creating confusion is a common tactic used by corporations and bureaucrats to frustrate the public by creating delays - diverting attention from issues that could result in full payment, to more subjective issues where some vindication is claimed. Confusion and delay wears down people under pressure; people who need funds urgently to keep their lives and families going. Vunerable people will often settle for less than they should. In the correspondence, note how few of the issues are addressed by Insurers Hotline. In particular, note that Insurers Hotline never gives an explanation as to why it took 17 days to get around to assessing the damage to the vehicle! The absence of comment might suggest that this standard is normal for Insurers Hotline.
In its Television advertisements, Budget Direct, aka Insurers Hotline voices the public’s distrust of established insurance companies and entices with a cheap alternative. Should the Insured have expected that lower premiums means lower claims? As sure as one plus one equals two! But then, at that time she was embarking on a new profession and needed to save money. Take a closer look at the advertising. The Budget Direct/Insurers Hotline advertisements are big on selling lowest premiums and on encouraging car owners to give the proverbial raspberry to established insurers, but have you seen any advertisement where a claim is made to compete equally on service and settlement of claims? Is the saving on annual premium really worth it? A read of the correspondence here will leave the answer in no doubt.
Gordon Clement
I invite you to take freely whatever ideas and phrases in my letters on this website that you find useful for progressing claims against malicious corporations. If you reproduce this page in full or part, please give a credit to the author.
All communication by email to: Clement.Advocates@gmail.com
