Mxxxxx Wxxxxxx Gordon D. Clement
Managing Director & CEO 28 XXXXXX
Budget Direct Mt. Gravatt QLD 4122
Insurers Hotline Pty Ltd xxxxxxx@hotmail.com
CEO
Auto & General Insurance Company Limited
PO Box 342
TOOWONG QLD 4066
16 November 2007
Dear Mr Wxxxxx
Claim Number11139XXXX-01
Incident Date22 July 2007
InsuredMxxx Bxxx
I am again bringing to your attention the dispute with Insurers Hotline. Attempts by the Insured to resolve the dispute have been met with vindication and no apparent appreciation that Insurers Hotline have acted negligently resulting in the Insured not receiving all the claim she is entitled to. If my previous attempts to explain the problem were inadequate, I apologise.
Extraordinary delays by Insurers Hotline alone in processing the claim, and incorrect information given by Insurers Hotline to the other party’s insurer, RACQ, combine to deprive the Insured of all the claim she is entitled to.
The most recent Insurers Hotline letter, incorrectly dated 12 October, does not have numbered paragraphs. Therefore, in responding, I have followed the paragraph numbers of my email of 30 September as far as possible.
Insurers Hotline October letter is useful in that it reflects Insurers Hotline approach to claims but it does not address key issues and/or Insurers Hotline actions and failures to act that have deprived the Insured of the full claim that would otherwise be payable to her by the other party’s insurer, RACQ. Insurers Hotline has maintained a vindictive position signalling that it regards its claim practices as adequate even though they are grossly at variance with the Australian industry best practice.
Insurers Hotline letter is incorrectly dated 12 October and includes other date errors.
a.the accident occurred on 22 July and not on 20 March as stated on page one of the letter.
b.The letter is dated 12 October 2007 but could not have been written until after Mr H’s email of 17 October, which states “I am currently in the process of finalising my review …”.
c.The letter is dated 12 October 2007, but could not have been written until after Mr H’s email of 19 October which states “Thank you for the documentation. I will now be reviewing the additional information.”
The October letter also states that the offer it contains “will lapse unless accepted within seven (7) days of the date of this letter”!
There is also a difference between the date of J C’s offer as stated in my email of 30 September and as shown in Insurers Hotline October letter. However, this does not affect the fact that that in every respect, the Insured responded promptly to Insurers Hotline requests for documentation and information, and in no way contributed to the extraordinary long time, 35 days, from the date of the accident until the Insured received cleared funds from a partial settlement payment into her account on 29 August.
The three main elements of the Insured’s claim are:
1)Errors and delays by Insurers Hotline solely, have deprived the Insured of the full claim that would otherwise be payable to her by the other party’s insurer, RACQ.
2)The Insured has been compelled to engage assistance to obtain an offer that is nearly consistent with the policy conditions.
3)The Insured has been compelled to use a line of credit to cover
a.unavoidable claim-related costs, agreed to be paid by RACQ but not yet paid by RACQ because incorrect information was supplied to RACQ by Insurer’s Hotline, and
b.costs that Insurers Hotline negligence has compelled the Insured to incur in order to progress the claim,
and interest accrues on that account until it is put in funds.
Resolution of this dispute will be achieved when Insurers Hotline: ·pays to the Insured the amount of $1,774.40 being the cost of a low rate rental vehicle 26 July to 29 August, or writes to RACQ correcting the previous misinformation given to it including ·a statement that Insurers Hotline posted a cheque to the Insured in partial settlement of her claim in a manner that is consistent with cleared funds being available to her on 29 August 2007, and ·pays to the Insured the amount of $3,650 being costs which, due to Insurers Hotline errors and negligence, the Insured was compelled to incur to obtain sufficient assistance to progress and attempt to finalise the claim, and ·Interest on credit card to 16 November 2007, $82.85 - 14.5% for relevant outlays.
On 25 July 2006 RACQ conditionally agreed to covering the cost of a small hire car to enable the Insured to engage in her profession. I understand that the condition was that the Insured had a ‘no fault’ claim.
Insurers Hotline:
a.did not diligently pursue settlement of the Insured’s claim, and
b.gave incorrect information to RACQ regarding the date of the first settlement offer
causing RACQ to reject the Insured’s claim for full reimbursement.
Neither the Insured nor her representative have caused any delay in the settlement process. On the contrary, since 25 July, the Insured and her representative have urged Insurers Hotline to progress the claim and have supplied promptly all documentation Insurers Hotline has asked to be supplied - see table below.
1.Insurers Hotline did not honour agreed settlement
a.Settlement
Insurers Hotline letter of 21 August states "banking of this cheque constitutes acceptance of this offer as full and final settlement of any and all claims of whatever nature that you … may be have in respect of this matter".
The letter clearly states that it is an offer, and makes the condition that no further amounts can be expected.
The cheque was for the amount of $24,733 and was therefore an alternative offer to the settlement figure earlier agreed with J C which was for the amount of $25,133. It was not until after my email of 30 September that Insurers Hotline, by letter dated 2 October, forwarded a further $400.00.
Had my email of 30 September not be written denying that "banking of this cheque constitutes acceptance of this offer as full and final settlement of any and all claims of whatever nature that you … may be have in respect of this matter", but rather, if the Insured had accepted Insurers Hotline extra-contract condition, Insurers Hotline would have had no obligation to pay anything further, and, without doubt, would not have done so.
b.No Fault Claim
Insurers Hotline letter dated 12 October states “unfortunately, hearsay evidence is unacceptable”. Insurers Hotline was never asked to accept hearsay evidence. Insurers Hotline was made aware that there were two sources of independent witness. Most important of these is Traffic Accident Occurrence number QP070018XXXX written by Constable 22XXX, D. Fxxxx. Constable Fxxxx attended the scene of the accident and interviewed both drivers at the PA Hospital.
In the Chronology of Insurers Hotline October letter, the matter of the police report is dealt with as follows:
·3 August, 12 days after notification of the accident, RACQ requested a copy of the police report which Insurers Hotline had not previously attempted to obtain.
·6 August, 15 days after the accident, Insurers Hotline are advised by Mt Gravatt police that Constable Fxxxx will commence work at 6.00pm. Insurers Hotline did not attempt to phone Constable Fxxxx after 6.00pm.
·7 August, 16 days after the accident, Insurers Hotline unsuccessfully attempt to phone Constable Fxxxx to confirm if the Insured recorded a BAC.
·8 August, 17 days after the accident, upon unsuccessfully attempting to phone Constable Fxxxx again, Insurers Hotline “abandoned attempt to speak with police”.
This is most remarkable. I had no difficulty obtaining from Mt Gravatt Police, the information I required, on the first occasion by sending an email to Constable Fxxxx and receiving an appropriate response from another officer, and on the second occasion, by phoning Mt Gravatt Police and making my request to the Constable on duty. It really was not difficult.
Had Insurers Hotline determined to diligently attempt to obtain a copy of the police report, it could have done so much earlier by:
·Email request, or
·Fax request, or
·Phoning Mt Gravatt Police and speaking with the Duty Sergeant or the
Constable answering the phone, or
·Writing to Mt Gravatt police.
This is very basic stuff. Any of these options would have obtained the information required, and could have been done at a much earlier date than 8 August, 17 days after the accident. It was negligent of Insurers Hotline not to have attempted these alternative options, and at an earlier time.
2.Insurers Hotline has taken an adversarial position
I again assert that Insurers Hotline has taken an adversarial position in dealings with its client and has neither offered nor provided any assistance to its client in attempting to expedite the claim. Not only that, but rather than assist its client, Insurers Hotline has impeded settlement of her claim with RACQ, the other party’s insurers, by giving them incorrect information, resulting in an offer by RACQ of an amount substantially less than the amount the Insured is otherwise entitled to.
I understand from RACQ that Insurers Hotline has advised RACQ that it made a settlement offer to the Insured on the first date that it advises it assessed the damage to her vehicle, 9 August. That is not a true statement. Insurers Hotline solely is responsible for the delays in settling this claim. As can be seen following, there has been no contribution by the Insured to the delay.
Date Item Date Supplied Comments
requested
Letter dated Confirmation of police 30 July
25 July report details
received on details for Ms B
30 July
Letter dated Photocopy of 30 July
25 July the drivers licence
received on
30 July
Letter dated Driving history for 30 July
25 July Ms B
received on
30 July
Letter dated correspondence from none
25 July the other
received on party
30 July
Letter dated Third Party details 22 July
25 July
received on
30 July
12 Sept Circumstances 23 July and
of the accident 2 August
Sept Proof of Supplied within
Ownership 24 hours
registration
notice.
17 Sept the date on Acknowledged
which Ms B on 19 Oct
commenced as received
driving her own
private vehicle
again
17 Sept rental vehicle Acknowledged
invoice for the on 19 Oct as
period 26 July received
to 29 August.
Eighteen days elapsed before Insurers Hotline appointed an assessor. The chronology in Insurers Hotline October letter states that an ‘assessor’ named D contacted me on 9 August to advise of PAMV. That is correct. D advised of his estimate of the PAMV but did not make an offer of settlement. This raises the question as to whether D had any authority by Auto and General/Budget/Insurers Hotline to make offers of settlement on their behalf.
The following week when we had evidence that D’s PAMV’s did not fairly represent the pre accident market value of the Insured’s vehicle, and when D failed to provide the URL’s of his source of information, J C, said to be an Insurers Hotline officer senior to D, phoned to negotiate a settlement. Settlement was reached within 24 hours but J C pointed out that he could not make a binding offer and had to refer to a more senior company officer for approval of his suggestion. If J C was not authorised to make a binding settlement offer, surely D was most certainly not.
D did not and probably could not make a settlement offer, but Insurers Hotline advised RACQ that he had.
D’s first PAMV of 9 August was ridiculously low and had little regard for the pre-accident market value of the Insured’s vehicle. On the phone, I gained the impression that D was not fully apprised of the pre-accident condition of the vehicle, and may not have personally inspected it thoroughly During the following week, D contacted me regarding his estimate of the pre-accident value of the car and the method he used to calculate it. I remonstrated about the delay in having the vehicle damage assessed and was told that he was “busy doing other things”. It was evident from D’s responses, and sometimes the lack of them, that he was not familiar with the claim. I therefore suggested that, rather than waste my time, he read the file and phone me back. He mentioned that he had had the file for only 8 hours and seemed to suggest that was sufficient reason not to be familiar its contents!
The fact is that, on their own admission, an ‘assessor’ was not appointed by Insurers Hotline until 7 August, 15 days after the accident, and even then, he was not familiar with the vehicle being assessed.
Insurers Hotline state that every phone call is recorded, and I urge you refer to the recorded conversations which will confirm that:
a.No offer of settlement was made by D, and
b.D was expecting the Insured to engage in horse trading, and
c.D had obtained his estimate of PAMV by looking at advertisements on the Internet, and
d.D was not familiar with the Insured’s vehicle.
However, although asked to do so, D would not or could not provide the
URL’s that were supposedly his source of reference, casting reasonable doubt on the validity of his assessment.
In the extreme, if Insurers Hotline had made an assessment of the PAMV at $10,000, $16.500 below market value, would Insurers Hotline expect the Insured to accept such an estimate as reasonable and would Insurers Hotline report to the other party’s insurer that it had made a settlement offer?
D agreed that it was up to the Insured to demonstrate that his estimate of the PAMV was unacceptably low (please refer to the recording) since Insurer’s Hotline would not accept AAMI’s written statement of the vehicles replacement value. This required that the Insured, with assistance, exhaustively search Brisbane for an equivalent vehicle to her vehicle as it was, pre-accident. After a search of the internet and newspaper advertisements, a visit to every Toyota dealer in the Greater Brisbane area, and to many large car dealers, we were unable to find an equivalent vehicle in or near Brisbane with usage of about 10,000km. The Insured vehicle was like new. High kilometre and well worn vehicles were found and they were priced about the same as D’s estimates, but no vehicles were found to be equivalent to it.
D stated that unless his estimate was accepted the car would be repaired. I do not accept Insurers Hotline denial that this was intended as a threat. The Insured’s vehicle was a wreck and it is extremely unlikely that it could be repaired so that it conformed to manufacturer’s specifications. Nevertheless, recognising Insurers Hotline’s right to have the vehicle repaired, I agreed to its being repaired, subject to it passing a test by Motorama confirming that it conformed to manufacturer’s specifications (please refer to the recording).
The marginally higher estimate proffered by D on 13 August was still unacceptable, being about $3,000 less than the AAMI valuation.
3. Extraordinary long time for Insurers Hotline to make a settlement offer.
Until 16 August, Insurers Hotline did not confirm whether the insured vehicle would be repaired or written off. This impacted on how much longer Ms B must contract to hire a vehicle.
On 16 August J C phoned me to seek negotiation of a settlement on the basis of the insured vehicle being written off.
Insurers Hotline October letter contends that the Insured/Insured’s representative contributed to the delay in settlement during the negotiation with J C.
Although the dates of the negotiation with J C stated in my email of 30 September differ from those stated in Insurers Hotline October letter, the timeframe is similar.
As shown in the chronology of Insurers Hotline October letter, in the negotiation with J C, offer and acceptance occurred within 24 hours. In what way then did the Insured/Insured’s representative contribute to the delay in settlement?
It is true that J C and I had several heated discussions and that we disagree on many points, but consider the following:
My understanding is that J C maintained:
1)a. That prices asked for by car dealerships are of little value.
a.That prices on the Internet are more reliable than yard prices as a
measure of value.
However, this notion is not useful in determining the market value of the Insured’s vehicle. The underlying assumption is that car dealers ask lower prices and are more truthful advertising on the Internet than they are advertising at their place of business. The probability of this being true is extremely remote!
2)a. More people buy cars privately than through dealers.
What evidence is there that this is a fact?
3)a. Advertised prices vehicles include price elements for warranties
accessories trade-ins.
b. Insurers Hotline cannot quantify what those price elements are.
Most of the debate between J C and I centred on this point because Insurers Hotline was contending that they were not capable of determining what those price elements might amount to. I found this difficult to believe and suspected that J C was stalling the negotiation for some reason because this price difference is stated so often by Insurers Hotline in its brochures, policy conditions and negotiations that, surely the calculation is made with every claim!
J C did his own independent research of the market value of the Insured’s vehicle and had now located one near-equivalent vehicle. It was priced at $26,000 but, because its usage was even less than the insured vehicle, he believed it was of more value. Fair enough. It remained to resolve what the price elements for warranties, accessories, trade-ins, etc might be. I suggested a simple method of calculating this, based on approximate costs of acquiring these elements, post-sale.
Having regard for the estimate, and for the relative values of the vehicles as perceived by J C, we agreed on a figure which both accommodated Insurers Hotline’s antipathy to car dealers and was within $1,500 of the AAMI estimate of the insured vehicles replacement value.
Contrary to the Insurers Hotline contention that, during the negotiation with J C, the Insured/Insured’s representative contributed to the delay in settlement, the Insured’s representative contributed the calculation method and estimate that allowed a settlement figure to be determined. Not only that, but, in order to bring this prolonged claim to a conclusion, the Insured’s representative risked a confrontation with the Insured by extensively compromising on the settlement figure that she genuinely believed that she reasonably required for an equitable settlement.
It is scandalous and malevolent to contend that either the Insured or her representative contributed in any way to the delay of this claim.
As soon as Insurers Hotline displayed intent to negotiate a settlement, it was done. Discussions between J C and the Insured’s representative, with diametrically opposed views, nevertheless resulted in a PAMV being objectively estimated, and a settlement offer being made and accepted within 24 hours - but 25 days after the accident!
I urge Insurers Hotline to review the recorded conversations and confirm the truth of my assertions.
4.Insurers Hotline caused client great anxiety and distress by acting unprofessionally and by failing to act with due diligence
No additional comments at this time.
5.Assistance of a third party required
It is fair to say that, in order to progress this claim through Insurers Hotline, it is necessary for the Insured to have the skills of a negotiator, of a solicitor, of a used car dealer, of an insurance professional, and of an investigator. It is entirely unreasonable of Insurers Hotline to require this of its clients and iniquitous to require it of those who are suffering injury from an accident.
In the absence of assistance by Insurers Hotline, and because of their adversarial approach, to pursue and progress her Insurers Hotline claim, and progress her claim with RACQ, the Insured has been compelled to engage assistance. The cost to date of doing so is $3650.
6.Tapes Please provide copies of the tapes as requested. They are, in any event, discoverable.
My letter of 2 August to Insurers Hotline reiterated the accident description given by phone on 23 July and pointed out that, as at that time, twelve days after the accident, the client had not yet been advised by Insurers Hotline of the progress of her claim, nor even whether her vehicle would be repaired or written off. This impacted on how much longer she must contract to hire a vehicle. No written response was received from Insurers Hotline to this letter, and questions remain unanswered. I believe it is significant that from 2 August to 21 August all communication with Insurers Hotline regarding the PAMV and settlement was by phone and not in writing. Insurers Hotline state that every phone call is recorded, and I urge you to provide tapes of the recorded conversations so that this matter may be settled quickly or referred to other authorities for arbitration or litigation.
7.Insurers Hotline letter of 12 September 2007 No additional comment at this time. 8.Amounts now sought by the client.
See present estimate above.
Since it is in the interest of the Insured who has suffered by Insurers Hotline errors and negligence, Insurers Hotline are requested to pay to the Insured immediately, the amounts now claimed, and resolve any negotiations with RACQ as the companies find convenient.
9.Final Decision Letter No additional comment at this time.
I may be contacted by email or post at the above addresses.
