Thursday, November 26, 2015

Claim for Loss of Use of Car

Dear Mr Tan,

I asked my insurer to help me to make a third party claim for the repair of my car and for loss of use. I get this reply from them.

"We believe there is a slight mis-understanding regards Aviva's role relating to your motor policy. The insurer (Aviva) does not have legal rights over your personal losses. Aviva has legal rights only to recover the repair cost it paid as it was stated under the rights of recovery in your motor policy.
Your motor policy only covers payment to the repairs of your vehicle upon an accident and/or liability against another party as a result of your action arising out of that accident. The recovery of your loss was always out of goodwill to our insured."

I am not legal trained but I do have a fair understanding of the law as a layman.

If the insurer has no legal binding contract with the third party regarding my loss of use, then why does the insurer meddle or dictate the amount of loss of use? How can the insurer say for a certain capacity of vehicle, such and such is the loss of use? Is this an agreed amount throughout the industry?

If it is, then why do taxi drivers have added privilege with regard to loss of use? Taxi drivers' loss includes rental of vehicle plus personal losses. If I were to become an uber driver, would my loss of use be increased since I function like a taxi driver? I hope you can advise me accordingly.

Under the policy, Aviva is contractually obliged to repair your car. They have the legal right, called subrogation, to sue the other parties to recover the amount that they have paid for the repair of your car.

The policy does not provide for loss of use, so Aviva cannot pay you for loss of use and recover it from the other party.

You have to take action on your own to make this claim on the other party.

It is a different matter when the other insurer negotiate with you on the amount for the loss of use. Usually, they will recognize the actual loss that you have incurred, e.g. rental of a car, taxi fare, etc. If you make a reasonable amount of claim, they are likely to agree with you.

I hope that this explains the position clearly.

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