Step 1. The other party has not or cannot pay their excess
An excess is an insureds contribution to a claim. Sometimes the insured notifies their insurer of an accident or claim, but then fails to pay the excess. This may be because it is a high excess and they cannot afford it, or for other reasons. The inability to pay a policy excess does not automatically allow an insurer to avoid liability for a claim which would otherwise fall within the policy terms. If the other party has not or cannot pay their excess you can request that the other party’s insurer pay your claim and deduct their customers excess from the damages they pay you. You would then need to contact the at fault party directly and negotiate with them to pay the remaining balance to you. The risks are:
- if the excess is close to your claim amount (i.e. your claim is $2,000 and the excess is $1500 you will only receive $500 from the insurer and you would need to pursue the balance from the other party directly); OR
- The insurer also must be liable to their insured, so if the insurer has exclusions or the other party failed to pay his premium they may not be liable under the contract.
- You are not at fault (The other drivers caused the accident)
- The damage is less than $15000 (or you are willing to accept $15000 as your maximum loss)
- The other driver is insured (and claims on their insurance)
- Repair cost of the damage caused or the market value of the vehicle, whichever the lesser;
- PLUS towing costs
- PLUS hire car costs, lost wages or profits (called “demurrage”)
- LESS salvage value (if market value of the car is claimed)
- send a letter of demand, which outlines your damages and the date in which you want the money paid by; and then if the demand is not paid by the demand date,
- commence a claim in Court.