Car Crash Victims Could Receive Lower Payouts
New Guidelines Might Frustrate Owners Of Old Cars
Confused.com has revealed that motorists with old/damaged cars might now receive surprisingly small, post-crash, insurance payouts. Why? Because the Financial Ombudsman Service – which resolves disputes between insurance companies and their customers – has recently issued the industry with a new set of guidelines. These emphasise that an insurer might be within its rights not to pay the total cost of a repair. The company, after all, only has to put the claimant back into the position he/she was in before the collision. This means the insurer might limit a payout to cover accident damage to a component - but not any associated parts that have to be replaced or repaired alongside as a result of wear and tear. So, let us consider a real-life example. The Financial Ombudsman Service recently found in favour of an insurance provider that refused to fully repair a car that was seriously corroded before its accident. Why? Because the insurer claimed that to rectify the collision damage the rust had to be repaired alongside at a total cost of three-thousand pounds. The insurance company, however, only offered the motorist five-hundred pounds to address the accident damage. It was then the claimant's responsibility to cover the entire cost of repairing the corrosion, as it was not the insurer's role to enhance the vehicle's pre-collision condition.
The Role Of The Financial Ombudsman Service
The Financial Ombudsman Service is a state-backed impartial body that resolves issues between customers and a wide range of financial service companies. As such its areas of expertise include: insurance, mortgages, credit cards, store cards, pensions, savings, stocks, shares, unit trusts, bonds, and payment protection insurance, etc. So, if a motorist is unsatisfied with the service he/she receives the first step is to try to resolve the issue with the insurance provider. If this is not possible within eight weeks he/she can contact the Financial Ombudsman Service. This body will then listen to the motorist's complaint and consider the service provider's perspective. Pleasingly, the motorist does not require any legal knowledge. The ombudsman will then decide on a reasonable course of action that it has legal powers to enforce. This process typically takes a few months although simple cases can be resolved within days or weeks. Complex issues, in contrast, can take more than a year. This service is free for consumers.