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Car Rental News - 21/02/2008
Insurance companies may be unethically offering compensation
According a recent report in the Guardian, accident victims are being encouraged not to file insurance claims but instead to accept a payout. An investigation has been launched into the conduct of insurers who deal directly with accident victims to determine if ethical practices are being followed.
Unite, a large trade union in the UK, has put together a dossier of evidence which is incriminating to a number of insurance companies, including Financial Services Authority (FSA).
According to one case in the dossier, Zurich insurance company offered one accident victim just £4,000 in 'full and final settlement', for a case which was settled in court last year for £35,000.
In another case parents who lost three children in a traffic accident were offered a £21,000 settlement by Quinn Direct. When the claim was finally settled, the insurance company paid out £60,000.
A spokesman said: “Quinn Direct operates a proactive approach to managing claims which involves getting in contact with potential claimants as soon as possible after an accident. Our experience is that people involved in an accident often feel insecure and are unsure what to do next, and they welcome our approach of speaking with them as soon as possible and sorting things out for them... We do not encroach on their right to seek legal advice, and make them aware of this.”
Insurance companies are claiming that this practice, known as ‘third-party capture’ is one of the ways they are fighting against he growing costs of processing claims. According to them, directly approaching victims cuts out the expenses of a lawyer and thus makes the process smoother and faster.
Malcolm Tarling, a spokesman for the Association of British Insurers, said that for every £1 insurance companies pay out in compensation, they pay out 40 pence in legal fees.
Not much information is available on the practice of third party capture as it relates to accidents abroad and travel insurance claims, however there are some important lessons to be learned by consumers here.
Whether at home or abroad, if you are in an accident or receive an injury, you should file the claim as soon as possible with your insurance company. Since more and more companies are trying to settle without going the claims process, you may expect a call or visit from a representative from the company soon after. Always consult a lawyer in the event that you are being offered compensation to ensure that you know all of your options and are getting the best offer.
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