Uninsured loss

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.Expenses add up after a car or motorcycle accident

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.

About Mark Thompson

Personal injury and accident specialist solicitor
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18 Responses to Uninsured loss

  1. Huw forsey says:

    Why is a excess a uninsured loss if you are not at fault for the claim? Why would this only be able to be claimed through your insurance if you have motor legal protection?

    • Mark Thompson says:

      Your own insurance covers only the risks insured. If you have an agreed an excess, your own policy will not cover the excess.
      Motor legal protection, or legal expenses insurance as it is properly called, do not cover your excess. This apparent insurance claims to give you the ability to claim compensation from the party to blame, which would include your excess.
      Legal cover, call it what you will, is often sold giving the impression it insures your uninsured losses. This is not correct. The cover is for the legal costs of recovering those losses if the compensation action goes wrong. I know it is dull, but I suggest you read the policy wording and decide if this is something you want to pay for.
      If you are not to blame, it makes sense to claim all losses from the party to blame. In theory, you will then not have a paid claim on your insurance record, which should keep your premiums down.

  2. Natalie Lewis says:

    Hi Mark,

    I was involved in a non-fault accident on 14th December. The other driver admitted responsibility straight away and my less than 2 year old Audi A1 has been deemed a write off. I’ve been referred to a solicitors by my insurer who will deal with a claim for personal injury and uninsured losses.

    When I bought the car back in December 2016, I paid extra for a service pack (which includes 1 x oil service, 2 x inspection/oil services, 2 x brake fluid changes, 2 x pollen filter changes and 1 x spark plug change) valid until either 17/12/2021 or 50,000 miles as well as Alloy Wheel and Tyre Insurance (valid until December 2019). Obviously I have not been able to benefit from the full terms of either of these and these have not been included within the value of the car as far as I am aware.

    I’m not concerned about getting the entire value of these products back, however I would like the value of the term of the products that I’ve missed out on, i.e. a year for the alloy insurance, and approximately 3 years for the service pack. Is this something that I could claim for as an uninsured loss or do I have to just accept that the money is lost?

    Thanks in advance.

    • Mark Thompson says:

      For a written-off vehicle, you are entitled to claim its market value at the time of the accident. Maintenance costs incurred on the written-off vehicle contribute to its market value and cannot be claimed in addition to the vehicle’s market value.
      You make a good point on the insurance policies you bought. I think you should seek the cost which reflects the period of cover you will not be able to use. You should first try to cancel those policies and seek a refund, as you should do with the vehicle insurance.
      One other loss, rarely claimed, is the additional insurance premium you will have to pay, simply because you have been in an accident. It does not matter the accident was not your fault, as simply being involved in an accident is likely to increase your next premium.

  3. J Lywood says:

    Hi Mark

    I was involved in a car accident earlier this year which was my fault. I admitted fault and my insurer settled the claim with the other party and paid out the value of her car.

    Today (some 6m later) I’ve had a letter from the other insurer asking me (personally) to pay 90% of the value of the settlement originally paid to the other party. The costs appear to be over £5,000 for a hire car for around 3 months.

    I’ve read somewhere that any uninsured losses that are claimed have to be ‘reasonable’ and I don’t think this cost for a hire car qualifies as reasonable.

    Is there any standing in law I can challenge this with?

    Thanks in advance for your help

    • Mark Thompson says:

      This does not sound right.
      Check with your insurer and ask if the case was settled on a once and for all basis. If so, you cannot be asked for more.
      If the claim was not settled completely, you r insurer should deal with the credit hire claim. That is why you have insurance, to deal with claims by third parties.

  4. Chris Denny says:

    Hello Mark.
    I have just successfully claimed against a t/p foreign trucker via the use of a solicitor. The foreign insurer has accepted liability and my car has been deemed a loss. Value agreed. I retain salvage.
    The expected settlement however has not been paid to me in full by the handling solicitor (my solicitor). The cost of generating an independent report for the damage to my vehicle has been with held. My solicitor advising that this inspection fee is not recoverable from the third party insurer. Is this correct?
    I now appear to have been penalised for a necessary action that was brought about by the negligence of another.
    Can you advise please.

  5. g little says:

    hi mark,

    my daughter’ car got hit by a car when she was parked and not even in the car – total loss for which the 3rd party has paid out via my daughter’s insurance company. She is trying to recover un-insured losses by herself. The 3rd party insurers have accepted liability. Should she seek uninsured loss recover from the 3rd party insurer of the other driver?

    • Mark Thompson says:

      Yes. You should recover all losses from the insurer of the party to blame, because claiming against your own policy will always increase your premium when the renewal comes around.

  6. Nicholas Redding says:

    I am an HGV driver and my truck and trailer were hit by a foreign driver in a Hire car pulling out of a junction illegally. My HGV was off the road for 6 weeks whilst the right parts were located, but the Third Party insurer is declining to reimburse me for the contracts that were lost as a direct result of the incident. The total value of the lost contracts exceeds £5000, plus travelling to/from repairers, telephone calls etc. The TP insurer is claiming that my last years Report & Accounts does not match the amount claimed, but my business was on the up before the incident and these lost contracts have lost me additional future business from these customers, including some from long standing clients. My legal advisers are saying that the TP insurer is correct, and that in Tort I can only claim my lost Net Profit for the period I was off the road, and not the value of the lost contracts. If the TP vehicle had driven into a Shop, the Shop Insurer would pay Loss of “Gross Profits”, so why is the basis of settlement for a works vehicle based on Net Profit not “Gross Profit?”?

    • Mark Thompson says:

      The law which governs compensation is rather like an expenses claim. You are entitled to claim your actual loss, so an employee who lost earnings would claim their net rather than gross pay. You can only recover the profit you would have made, rather than the gross income, from the contracts. In simple terms if your profit from a £1,000 contract would have been £250 then your claim for the loss of such a contract would be £250, not £1,000.

  7. Andy pidgen says:

    Two weeks ago a car crashed through my wall at 60 mph wrote off two stationery cars and caused substantial damage to property as well. My car was 9 years old with high mileage and I have been given a fair offer on market value, however to replace it will cost several thousand more than the offer, I wondered whether I could take the driver to the small claims court to recover some if this additional cost? I will have to take out a bank loan to buy a new car

    • Mark Thompson says:

      You can only claim for the market value of the damaged vehicle I am afraid. You are entitled to the market value at the time of the damage as that is your loss. I appreciate the car cost more to buy than you have received, but that is the extent of your loss. There is no additional claim for the cost of replacement i am afraid.
      The only way to cover replacement cost is to buy gap insurance. Gap insurance insures the gap between purchase cost and market value. I am not recommending it, but it might be an option to consider in the future.

  8. Dave hirst says:

    It seems a very common practice for insurance companies to under value cars. A third party took ill at the wheel and collided with my car which was shunted into my daughters car that was parked behind it. Both vehicles have been written off. The first offer for my daughters car was £1960. When challenged we were told maximum due would be £2000. This was subsequently increased to £2325 because I established that the valuation was based on the incorrect specification. Air con, metallic paint and alloy wheels all make a difference!
    My car is a limited edition model only 500 were built for the UK. I have searched the internet and located only 7 vehicles all more than the £5900 I am being offered. I bought the car for £600 more only 7 weeks ago and have spent another £400 on it for service, brake shoes and tyres since then. Of the 7 available only two match the car I purchased because the others have boy racer stripes.

    My uninsured losses as far as I am concerned will be :
    The difference between settlement and replacement cost
    If the replacement is due a service; that cost
    Telephone calls which all seem to be to 0800 numbers but are expensive from mobiles
    I am self employed and have spent hours on the phone so loss of earnings
    None of the replacements are local and journeys to view then collect if necessary. One car is 92 miles away the other 324 miles away. So time and travel expenses.
    A child seat and the manufacturer advises replacement after any kind of impact.

    Do you think I am in a position to recover these losses from the third party insurers

    • Mark Thompson says:

      Dealing with your daughters car first I am not surprised you had to negotiate. The value of a car depends on a number of factors including mileage and condition. Insurers rely on the guide price found in the various directories, and they also use valuers. There is usually a difference of opinion as to the condition of the car between valuer and owner, and as you have found you have to squabble. prove your argument by finding examples of very similar vehicles for sale at a higher price. You are still restricted by the overall guidelines, but you aim to be at the top, and an insurer will hope to settle close to the bottom. If an insurer can save £100 on every car it writes off that will produce a very tidy sum.
      Turning then to your car. This sounds like a rare and well loved car. Regardless how strongly you feel about the car your entitlement is to its market value. As you rightly say, its market value is reflected by what it would cost to buy another similar car. The guiding principle is what is reasonable for the vehicle written off as opposed to what you require, and I cannot imagine a Court feeling strongly about “boy racer stripes.” Work recently undertaken cannot be recovered separately, as it goes to the overall value. Just like in the case of your daughter’s car you could instruct your own valuer, but often the cost of the valuer may be more than the difference between you.
      Reasonable expenses are those which are due to the accident, and this can include the expenses involved in finding an alternative vehicle. A Court is unlikely to award compensation to reflect your time, but it would accept telephone calls and travel for inspection an collection of a vehicle. A child seat occupied in an accident should certainly be replaced and I would be surprised if that was not paid. In strict law you should only be entitled to the second hand value of the seat, but if you buy a new one, and I thin that is reasonable, the insurer should pay that replacement cost.
      I have seen some individuals claim for their time spent in dealing with a claim. The mechanism used is to clearly state your reasonable case at the outset, and advise the insurer that you will have to take time off work if the matter cannot be dealt with swiftly, stating your reasonable hourly rate. You can recover earnings loss if you are injured, but in strict law the cost of pursuing your case in law is not recoverable, but it is worth a try.
      Good luck.

  9. stuart Fuller-Shapcott says:

    my wife was hit by a Hungarian lorry on the wrong side of the road, she was luckerly not badly hurt, however the car is a right of. It loks like the lorry being on the wrong side of the road will cost me about £2200 ( value insurance will pay, and the cost of a similar replacement car) and also my excess (£200)
    Is this some thing we can get back from the lorries company or his insureres ?
    Police Scotland traffic officer told me that had the driver been Britiosh he would have been charged with careless driving. ( I am, and accident was in Scotland)

    • Mark Thompson says:

      Have you or the police got the insurance details of the lorry? Have the insurers of the lorry been in touch?
      The fact that a “foreign” vehicle is involved is not the problem it sounds, and if the driver to blame is from a country within the European Union there is a system in place which will help you. The same thing applies if you are driving in a European Union country and are involved in an accident. It is possible to bring your compensation case through a lawyer based in the UK and the case will be put direct to the insurers of the party at fault.

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