1 Claims Reporting Procedure This document includes:- An introduction to the claims reporting process Your Belmont contacts The life of your claim A review of the Ministry of Justice Reforms
2 Introduction to the Claims Handling Process Following the introduction of the Ministry of Justice Reforms and a deteriorating claims culture, there is a need for claims to be reported quickly. As such, we have produced this guide to assist you in mitigating your claims costs and thereby, the premium payable to Insurers. When a claim is reported to us, we need to quickly establish the best way to process it and instruct Insurers on your behalf. In order to do this, there is certain information required. Within this document are forms that will assist you. Your claim will progress through various stages and the time involved can vary enormously. But in general, there are claims that will reach conclusion faster and you will hear from us on a regular basis. Other claims, such as Employers Liability or Motor Third Party Injury claims may not be concluded for in excess of a year. This will be explained later, but we will keep you updated when relevant information becomes available. You pay your premium to cover claims and we, therefore, aim to provide you with excellent advice and guidance. Your Account Executive or Account Director will discuss them with you at review meetings, but please feel free to contact your claims handlers at any time with your questions.
3 Your Belmont Team Claims Manager Helen Winkworth Non-Motor Claims Helen Winkworth (Senior Technician & Referrals) Maureen Turner Sara Fullman Paula Hickmott Motor Claims Karina Lovelace (Senior Technician & Referrals) Roger Fleisig Claire Coates Lyn Bowles Victoria Farnfield Becket House, Vestry Road, Otford, Kent, TN14 5EL Tel: Fax:
4 The Life of Your Claim General Your Insurer s state within their policy wording, that all claims be notified to them. Failure to comply with this may invalidate your insurance policy. Should you require clarification on this point, please contact your Account Executive or Director. Motor Claim Front Sheet and Third Party Data Capture Form We have designed two forms to assist you in submitting your motor claims. However, of equal importance is that these will assist in reducing your claim costs. When you collide with a third party, they will be encouraged into hire cars as will be demonstrated in detail under the Review of the Ministry of Justice Reforms section of this document and more specifically, Third Party Capture. Receipt by Belmont Once we receive your claim form, it will be reviewed and allocated to the appropriate people by our Claims Manager, Helen Winkworth. You may then be contacted by one of our claims team to discuss certain aspects of the claim further. Your Claims Handlers In the main, you will be contacted by one person within the team. However, in order to ensure that there are no delays, one of the other team members may become involved. Our claims handlers are very experienced and will guide you through the various stages of each claim. In addition, your Senior Technician will become involved if necessary and be available for contact should you have any concerns. Reporting to Insurers Your claim will then be allocated a reference and sent to your Insurers on the same day of receipt
5 Motor claims Engineers If a motor engineer is required, we will instruct Insurers and diary this request for 48 hours. Within this time, an engineer should be appointed and we will confirm when they will attend to inspect your vehicle. We will then diary the papers for 5 working days post inspection to ensure that the engineer has produced their report and sent it to Insurers. Urgent Repairs If urgent repairs to your vehicle are required, please take photographs and keep all of the damaged parts for inspection purposes. Uninsured Loss Recoveries In order for us to pursue a third party for the damage to your vehicle or any uninsured losses, we will require; A claim form Estimates for repair Your loss of use formula if applicable The number of days loss of use is being claimed for These losses will then be handled by a dedicated uninsured loss recovery company. Total Losses In the event of a total loss, your Insurer will require the following; V5 Keys Log Book Service History MOT Certificate Other than for cars, we would also ask that you obtain trade adverts for similar vehicles in order to substantiate the value of your lost vehicle and allow us to negotiate the highest settlement for you.
6 Driver Interviews It may be necessary for your driver to be interviewed to obtain a formal statement. This will be arranged by your Insurer and should be via yourselves, but we would recommend that you speak to your driver and ask that he contacts you if he gets any enquiries direct. We would also recommend that you attend the interview. Non Motor Claims Loss Adjusters In the event of anything other than a minor loss of property or business interruption, your Insurers are likely to appoint a loss adjuster. We will be involved in this process and may attend. In order to be effective, please notify the loss to us as soon as possible. We would ask that you confirm the cause of the loss together with a full description of what has then occurred. The Loss Adjuster will require sight of purchase receipts (if applicable) and a copy of the latest report and accounts. Employers Liability Where an employee is injured, there will be a number of documents required to defend or substantiate the claim. These include; Wageroll information for the 13 weeks prior to the incident, plus wageroll for any period of absence since RIDDOR report if applicable HSE report Copy of Accident Book Details of any relevant training Notes of interviews held with the employee post-accident Witness Details Maintenance or defect records if applicable Please ensure that these are made available.
7 Reserves When your claim form is received by your Insurer, they will place a reserve against it. The intent is to show what the potential exposure is as a result of the claim. This reserve will alter over the life of the claim, but the principle is that for the few claims that do not actually develop into the expected exposure, there will be others which become much more expensive to settle than originally anticipated. Updates In the UK, there is an expectation within the legal system for reasonable negotiations to take place, before a third party or your Insurers issue proceedings. Therefore, there are certain aspects of claims that may take some considerable time to resolve and you may not hear too much during these periods. Examples are; Police Reports these can often take up to 6 months to be released, although if there is a police investigation, much longer Medical Reports These usually take around 3 months from the date that the third party solicitor instructs their Client. However, if the injury is anything other than a standard whiplash, further medical reports may be required. Damage to street furniture Local authorities are notoriously slow when it comes to arranging repairs and submitting their invoices Taking into account the above, we will provide you with updates on your claims when relevant information comes to light. In addition, your Account Executive or Director will always be happy to discuss claims with you. Settlements Your Insurers have exactly the same objectives as you, in that they want claim costs to be as low as possible. Whilst they will do everything possible to defend claims, there are unfortunately occasions where they will have to accept liability and settle a claim, simply based on the economics of the case. As a simple example, the additional legal costs of defending a claim into court are often at least 10,000. With the Courts often falling on the side of the third party who they take pity on, it is often cheaper to simply settle out of court. This protects your claims experience and ultimately your premium. Liability decisions will be discussed with you wherever possible.
8 A Review of The Ministry of Justice Reforms An explanation of the MOJ Reforms and how they will affect your business. As of 1 st May 2010 the Ministry of Justice Reforms (MOJ) have changed the legal costs regime for personal injury claims arising from road accidents. This provides a genuine opportunity to reduce the cost of claims; however failure to meet deadlines will inevitably increase them. Why? The MOJ Reforms have arisen in response to concerns over the cost and delays in delivering compensation to third parties who have been injured. New procedures are therefore being introduced to speed up and reduce the cost of claims where liability is not disputed. Timescales The Reforms require that liability should be admitted within 15 days of a claim being notified by the Third Party. Failure to do this will result in each claim being dealt with in a different court process which attracts much higher legal costs.
9 The Process Fixed Cost Scheme There are 3 stages to the process as follows:- STAGE 1 Claimant submits their claim. Your Insurers (on your behalf) will have 15 days in which to decide liability. If this is not done, the claim leaves the scene. If liability is admitted, the costs are fixed at 400 and the claim moves to stage 2. If liability is disputed, the matter is removed from the fixed cost scheme. STAGE 2 The Claimant submits their medical report including any other items that they may be claiming for. At this stage, the Claimant will propose a settlement amount. You Insurers then have 15 days to accept, reject, or make a counter offer. If required, there will be a further 20 days for negotiations. If agreement cannot be reached, your Insurers then have to make an interim payment for the full amount that they originally proposed on your behalf and the case goes to Stage 3. Stage 2 costs are fixed at 800. An application will be made to the Court to determine quantum and papers submitted. The Court will consider the papers, but if either Claimant or your insurers request a court hearing, it will be granted. The Court will then make an award for damages. Costs are 250 for a paper hearing, or 500 if an oral hearing is held. Success Fee A Claimant s solicitor may submit an application to the Courts for a Success Fee. This increases dependant upon the complexity of the claim being brought and can be as much as a 100% uplift. Therefore, typical solicitor s costs of 2800 become 5600.
10 Summary These Reforms require the early notification and identification of claims and for quick decisions on liability, but also disputed cases must be subject to quality investigation in order that they are not taken outside the scheme unnecessarily. THIRD PARTY CAPTURE The need to report accidents quickly to your Insurer will become paramount. Emerging practices by the claimant industry is increasing the cost of claims, particularly those resulting from credit car hire, exaggerated repair costs and an increasing number of whiplash claims resulting from minor collisions. Arranging the repair of the Third Party vehicle and providing temporary hire vehicles not only significantly reduces the cost of repair and subsequent hire but it can also reduce the number of injury claims by keeping the Third Party out of the hands of claimant solicitors. This can be illustrated by a typical claim and how it can best be dealt with, along with a view of what could potentially go wrong and the resultant cost consequences. Representation The Third Party had no need for representation as they were contacted quickly by your Insurers before seeking representation. Credit Hire / Repair Both avoided. Proactively dealing with the incident has allowed your Insurers to get absolute control of the repair cost, duration of repair and alternative vehicle provision whether by providing courtesy car (preferred) or equivalent vehicle for duration of repair.
11 Personal Injury Scenario 1 Whilst the Third Party indicated slight pain arising from their vehicle being hit in rear, medical attention was not sought and they decided not to seek advice in view of the early contact by Insurers and the provision of vehicle repairs and replacement vehicle. Cost minimised:- Repairs: 2850 & VAT Duration: 10 working days Replacement Vehicle: No direct cost as courtesy car accepted Personal Injury: No claim as Third Party satisfied with fast and efficient service Cost of representation: Avoided Total: 2,850 & VAT Scenario 2 Accident not reported to your Insurers for 15 days. The Third Party is referred to a credit hire company by their Insurer who then organise repair and hire of a vehicle. They also introduce a solicitor to pursue a personal injury claim. The hire period increases to 18 days allegedly due to a delay in the supply of parts. The cost of the claim increases to 8,350 i.e. includes injury at 5,500 and associated costs. It could have been more, but the credit hire claim is defeated by virtue of the Scene of Accident Bump Form. Scenario 3 No Scene of Accident Bump Form completed by your driver and therefore not handed to the Third Party. The opportunity to dispute hire charges is lost. Claim increases to 13,686 ADDITIONAL COST 10,836
12 Scenario 4 It could be worse! The accident is not reported to your Insurers for 25 days, Scene of Accident BUMP Form not completed and your driver denies liability. It takes three months to investigate and determine liability which is ultimately accepted by your driver. During this time the Third Party has still been in a hire car, the cost of which is up to 20,880. No Scene of Accident Form - no legal grounds to dispute. CLAIM NOW COSTS 29,230 TOTAL ADDITIONAL COST 26,380 Summarising the benefits of Reporting Claims Direct to your Insurers IT SAVES YOU MONEY IT SAVES YOU MONEY Capped Solicitor Costs - As identified above, reporting claims directly will allow your Insurers to cap the Third Party costs and reduce your overall claims experience. This will improve your premiums. Credit Hire - This is now an industry worth 10bn a year with cars being offered to third parties at extortionate rates. It is now common for such hire costs to far exceed the cost of repairs AND injuries! By reporting a claim directly to Insurers within 24 hours, it increases the chance that your Insurers can offer the Third Party a hire car at much reduced hire rates. Repairs - Your Insurers have agreements with garages which attract much lower labour rates, but these are only of use in reducing the claim costs if the Third Party is contacted quickly. Avoidance of Solicitors - We now live in a very litigious society and solicitor driven claims are common practice. However, it is known that where third parties are contacted quickly and their needs in terms of replacement vehicle and repairs are met, they often do not pursue an injury claim via a solicitor. This can more than halve the claim costs. Low Claims Bonuses - By reducing your claim costs, you increase the chance of achieving any low claims bonus. Premiums - Ultimately the levels of premiums reflect the cost of claims, any improvement in claims cost will ultimately be reflected in your premium levels.
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