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Last May, a mother and son from Stockport both incurred whiplash injuries after a learner driver smashed into the back of their car, as they sat stationary. The next day while recovering at home their received a house call from a lady from the insurance company, who said she wanted to talk to them about the accident. Questions were asked as to whether or not the victims wanted to make a claim within the next six months, and a form was produced for them to sign. Neither victim knew at the time that the form they were signing meant they were wavering their right to make a claim, and thus wouldn’t receive any compensation. Luckily their solicitor intervened and the insurance company was ordered to pay out £1,400 each to the mother and son for their injuries.
This type of situation is not uncommon, with insurance companies stating that often people want to sort out the situation as soon as possible, and prefer a pro-active approach to claims handling. But even if the victims are told that they have the right to seek legal advice, a cold call from an insurance representative may be too soon after the event for the victims to really have time to consider all of their options.
Others are outraged by this action, claiming that visiting a car crash victim directly after they have suffered an injury such as whiplash is unacceptable and visiting their home is inappropriate. Accident victims often are suffering from shock and stress and need time to recover before they are properly able to digest legal jargon relating to a claim. In particular a cold call from an insurance company may put undue pressure on the victim to sign forms that they wouldn’t have signed on speaking with a solicitor.
The question now is who should be regulating this kind of behavior? Should there not be a consumer watchdog to protect accident victims from this kind of intrusion when it is not wanted? The Financial Services Authority is one such body who could play this role, but at present they are not sure as to whether these situations do in fact need to be monitored. They claim that further research needs to be carried out into how insurance companies handle third party claims and whether or not this is a widespread issue.
Insurers do admit that getting to the third party victims before their lawyers is all part of their business model and driven by the desire to avoid having to pay any legal fees. Typically for every £1 that is paid out in compensation for an injury claim 40 pence goes towards legal fees. So it is clear that the insurers stand to make considerably more money if they can minimize this cost. But is cold calling the right way to do this? In order to make the system fair, accident victims should be made aware that they can say no when insurers come knocking on their door and that they always have the choice to speak to legal representation first.
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