Uninsured loss
Uninsured losses are those items of expense which are not covered by your own insurance policy. They usually crop up after a road accident.
If you have third party cover you only have cover for the damage you do when you are at fault. That means everything else is an uninsured loss. If you have comprehensive cover the uninsured losses will be every expense except the vehicle, subject to payment of any policy excess.
Many people think that legal cover or legal expenses insurance is designed to help recover these uninsured losses. That is not the case.
Legal expenses insurance may allow you to recover your uninsured losses as part of a compensation claim, but it does not insure the losses themselves. To be more accurate, I have not come across a genuine policy which allows you to recover uninsured losses of a low value, and I will explain why that is.
Recovery of uninsured losses with the support of legal expenses insurance usually depends on a compensation case being commercially “viable.” Most if not all policies include such a clause and please tell me if you know of one which does not. That means the insurer will usually insist on there being a good chance of legal costs being recovered from the other side. To recover your legal costs from the other side the case must involve an injury worth more than £1,000, or financial losses worth more than £5,000 in the absence of an injury.
This question of commercial viability is one of the very good reasons you are advised to contact us first after an accident. If someone else is to blame we can recover all losses from their insurance company. If you have repaired or replaced your vehicle through your own insurance you will have reduced the commercial viability of your case. Your own insurer may recover its outlay from the insurance company of the person to blame, but you will be left with your excess to pay, plus a dent in your insurance record.
If you are sold legal expenses insurance with the promise of recovering uninsured losses you must demand to see the policy. I will happily read the small print for you as I would be surprised if the policy lift up to the sales message.
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