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New Insurance Rules Could Hit Fleets Hard

October 7, 2009

Fleets and their insurers have been warned that new rules governing how quickly road crash claims should be settled will place additional burdens on them.

The Ministry of Justice said last week that agreement had been reached that will streamline the claims process for road traffic accident personal injury claims valued between £1000 and £10,000 – around 80% of all motor personal injury claims.

The new process, which will come into force in April 2010, means, where fault is not disputed, liability must be admitted within 15 days.

As a result, businesses must ensure that their drivers report crashes immediately and have in place a system that quickly notifies their insurance company.

“The new process will have a huge impact on fleets, insurers and claims management professionals,” warned Jonathan White head of corporate personal injury at Corclaim.

“Drivers will need to be educated about the need to notify claims more quickly or fleets could suffer penalties resulting from any none compliance with the new claims handling rules.”

The new rules mean each stage of the process will have a fixed legal cost, which should result in reduced premiums.

“However, if fleets or insurers do not comply with the new stringent time limits the fixed costs regime will not apply and fleets and insurers will be faced with large claims for legal costs from claimant’s representatives,” said White.

The three new stages of a claim

1.      Once a claim is sent to the insurer, it has just 15 days to respond. If liability is accepted, then the claim continues to the next stage. If liability is denied then the claim falls out of the new process.

2.      The claimant sends supporting evidence, completes a settlement pack and suggests an offer for damages. The insurer has another 15 days to either accept or reject the offer, and/or make a counter-offer. A further 20 days for negotiations are allowed. If no is reached, the claimant’s representative prepares documentation for stage three.

3.      After 10 business days from the date the claimant sent the stage-three documentation to the insurer, the claimant can ask the court to determine damages. The insurer can also elect to commence proceedings if the claimant fails to submit documents in time.
 

Source: www.fleetnews.co.uk

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