Insurers force road traffic accident victims to settle for less compensationSeptember 1, 2010
In a recent report by The Times, it was revealed that some insurance companies are using “high pressure tactics” to force victims of road traffic accidents to accept less compensation than they are entitled to.
In some cases offers are made immediately if the victim will settle without going to court. For example a road traffic accident victim was immediately offered ₤1000 if she would settle without getting lawyers involved. In this instance the victim refused at which point the offer was raised to ₤1700. She then instructed lawyers to asses the situation and the claim was achieved and settled at “more than 1000% greater than the original offer, plus legal costs”.
Amanda Stevens, the President of the Association of Personal Injury Lawyers, which boasts 4000 members, claimed that the Financial Services Authority who is meant to regulate all providers of financial services, was “turning a blind eye” to victim’s plights. At the association’s annual dinner in London, Ms Stevens said that victims were being let down by “weak financial regulation of certain insurance activities” and that it was not acceptable for the Financial Services Authority to ignore these high pressure tactics which insurance companies are employing to persuade people, who are at their most vulnerable, against the benefit of independent legal advice.
These tactics are not kept just for road traffic accident victims but also victims of crime and other personal injury accidents. Ms Stevens called on the Justice Secretary Jack Straw to address “the failings of the Criminal Injuries Compensation Scheme”. The purpose of the scheme is “admirable” but it is a complicated and long process and only a third of crime victims are even aware that they are entitled to compensation or have an eligible claim. According to the Public Accounts Committee as many as a fifth of victims found the form too long and complex to complete while only one in twenty victims who are eligible for compensation actually apply.
Many people think that if a road traffic accident was caused by an uninsured driver they lose their ability to claim but this is not true, it is still possible to make a claim: often just having the other person’s number plate allows them to be traced so you can claim directly against them. There is a special database called the Motor Insurers Bureau which has the insurance details of every vehicle in the UK and the name of the insurer. If you discover the other person was insured then a claim can be made to their insurers, if they aren’t insured then a claim for compensation can be made to the Motor Insurers Bureau.
Other victims are suffering from another major issue with “bureaucracy or gaps in the compensation process” as thousands are unable to trace their employer’s insurer so they can’t rectify the damage they have suffered just through doing their jobs. According to Ms Stevens the reasons for this is the “lack of will to set up a comprehensive database of insurance policies, supported by a fund of last resort” where no policy was found. There is only a database available for motor policies which is a “glaring omission” and one which the association is trying to change.
Victims of bereavement or medical accident due to clinical negligence are also “being let down” as there’s a “lack of legal aid” to fund inquests and this is only granted in “exceptional circumstances”. This can be a traumatic and lengthy process in an already tragic and difficult situation. Hospital trusts are reluctant to make early apologies and in some cases it can take years before an apology is given after persistent requests.
These sorts of tactics have also been used in the US. In more extreme scenarios it was discovered that victims of Hurricane Katrina and Hurricane Ike also suffered from these fraudulent techniques. After Hurricane Katrina the Louisiana State Attorney General filed lawsuits against six major insurance companies as they had coerced policy holders into settling their claims for less than the full value and they also delayed payments.
Ms Stevens said that the association was working closely with others to try and change this situation. She said that she was proud to be the head of an organisation which put people before “the pursuit of financial gain” which had led “so many in the city to the brink of collapse”.