In the bustling life of Scotland, commuting is a daily ritual for many of us.
Even more so, for those who live rurally.
Most of us will commute by car and, while many are familiar with car insurance to allow us to do so, many are not so familiar with “commuting” insurance.
In this blog post, we’ll delve into what commuting insurance is, why it is important, and what are the consequences if you don’t have it.
What is commuting insurance?
Commuting insurance is a type of coverage designed to protect individuals during their daily travel to and from their workplace. This type of insurance coverage is usually combined within an existing car insurance policy rather than a separate policy.
Its purpose is to specifically cover the risks associated with your commute, such as accidents or damage to your car.
Why it is commuting insurance important?
Statistics show that a significant number of accidents occur during peak commuting hours.
With more vehicles on the road and public transport systems operating at full capacity, the risk of accidents rises.
Most insurance companies now require commuting cover as an ‘add-on’ feature of your existing cover to allow for this increased risk.
What are the consequences if you don’t have commuting insurance?
If you are a person that regularly commutes and have not clarified whether your insurance cover specifically covers this type of travel, then you may be ‘under-insured’.
This means that your level of cover is not adequate to cover the risks associated with the journeys that you regularly take.
If you were then to have an accident, your insurers may take the view that you were effectively “not insured” at the time of the accident because your policy did not specially cover this type of travel.
Ultimately, this may mean that your insurance is void. You may then be unable to make a claim for the damage to your car. You may also find that, if you had comprehensive insurance and the accident was your fault, your insurers will not ultimately cover the losses of the third party involved in the accident – that burden will fall on you personally.
So, if you are in any doubt, it would be sensible to check with your insurance company to avoid any costly consequences of being under-insured.
Case study 1 – From the files of the Insurance Ombudsman
Mark contacted the Insurance Ombudsman after being involved in a car accident.
He explained he’d been driving home from work when he’d hit another car.
His insurance company had sent a claims investigator to interview him and were now saying they wouldn’t cover his claim because he hadn’t told them he’d be using his car to commute.
Mark said he hadn’t realised he wasn’t covered for driving to work – and he’d complained to his insurer that his policy documents weren’t clear. But they’d replied to say that they didn’t agree, and Mark had now been told he’d need to go to court for driving without insurance.
Feeling he’d been treated unfairly, Mark made a complaint to the Ombudsman.
How the complaint was resolved
The Ombudsman investigated and could see that the insurer had asked Mark what he used his car for. Was it –
- “social, domestic and pleasure” (SDP),
- “SDP and commuting” (SDPC), or
- “SDPC and business”?
Mark had chosen SDP, i.e. only the most basic level of coverage.
In the view of the Ombudsman, the extent of cover that provided to him was clear on the paperwork he’d been sent.
Mark was asked about this by the Ombudsman. He sent documents relating to previous policies with his other insurers, where the SDP cover had included driving to and from work. He said he had just assumed his current policy would work in the same way as his old ones.
People buying insurance are required take reasonable care not to make a misrepresentation about what cover they need.
The Ombudsman took the view Mark had been careless and he should have read more carefully the documents he had been sent.
After a full investigation by the Ombudsman, they took the view Mark did not deliberately try to mislead the insurer and decided to resolve the issue under the Consumer Insurance (Disclosure and Representation) Act 2012 rather than saying Mark was driving without insurance and refusing to consider his claim.
The insurer confirmed that, if they’d known Mark was going to use his car for commuting, they would have covered him, but charged more. The difference was in fact only a few pounds per year; Mark had paid well over 90% of the correct premium.
The outcome
The Ombudsman decided that the insurer must pay the outstanding claim proportionately, to account for the increased amount that the policy premium would have been had Mark included commuting on his policy. In other words, the insurer had to pay somewhere between 90% and 100% of the full value of the claim, but not the full 100%.
Case study 2 – From the files of Grigor & Young
The client had a road traffic accident in Moray which was their fault. They ran into the back of the other vehicle.
The client had comprehensive insurance and so expected that their own motor insurers would meet: (a) the cost of the repairs to the client’s own vehicle: and (b) the cost of the repairs to the third party’s vehicle and (as it turned out) the personal injury compensation of the third party driver.
The client’s own insurers declared the client’s motor policy to be void.
According to them, the client had been commuting at the time of the accident and had not taken out insurance to cover that use type.
The client was so taken aback that they assumed the insurers must be correct in their interpretation of the law.
The client could not afford to have their own vehicle repaired in a garage and only managed to get essential repairs carried out at a cost of about £1,500 through the generosity of a friend with car-repair skills.
The client incurred many phone calls clarifying and querying various issues with their insurers.
After many months the insurers wrote to the client to confirm that:
“A third-party claim has been submitted and finalised as follows –
Credit Hire – £213.31
Third party vehicle damages – £6655.99
Personal Injury – £5000.00
Solicitor costs – £2485.20
Total – £14354.50″
The client – a single parent with a young family – could not possibly afford the sums claimed by the insurers as due to be reimbursed.
In desperation, the client approached this firm for advice.
The client was basically traumatised by the whole experience.
After discussion, it appeared arguable that the client had not been commuting at the material time. On the day in question, after leaving work, they had been shopping and had met with friends for coffee before going home. This was in the context of a distance between the client’s home and place of work of about 2 miles.
A complaint was raised with the client’s insurers.
Initially, the insurers refused to deal directly with the client’s nominated solicitors and persisted in contacting the client directly, which caused confusion and stress.
After concluding their investigation and upholding the client’s complaint, the insurers provided the following feedback.
“We (i.e. the insurers) sent a Form of Consent and Indemnity to you on ‘date’ which was signed and retuned on ‘date one month later’. This letter acts as an agreement by yourself to cover the costs of the claim.
Although this form was sent, we failed to send you the relevant documentation regarding the repudiation of your claim.
I understand it came as shock to you when two years later on ‘date’ we resent the Form of Consent and Indemnity and details of your repudiation on ‘date’ requesting a sum of £14354.50 for your claim.
I can see you called in straight away and were advised the claim had been repudiated and you were liable for the costs of the claim. We also advised a Personal Injuries claim had been received from the Third-Party Insurer (TPI).
I have listened to all calls between yourself and ‘ourselves, the insurers’ and would like to apologise for the poor customer service you have received. I can see you have been misadvised, had the line cut on you multiple times, with no call backs and have been transferred to incorrect departments. In addition to this, I can see you requested for the Form of Consent and Indemnity to be sent via post as you did not have access to a printer however, this was never sent.
I understand you instructed Grigor & Young Solicitors to whom we confirmed the repudiation to on ‘date’.
Due to the poor customer service provided by ‘us, the insurers’, and the stress I understand this situation has caused you, we have made the decision to overturn the repudiation of your claim. This means we will cover the full cost of the claim, including the TP’s. I understand you took out a loan of £1500 to cover the cost of repairs to your vehicle. If you are able to send in proof of your loan documents and an invoice of repairs, we can look to reimburse these costs.”
It is worth emphasising that the admissions in the above quoted section regarding not just negligently bad customer service but, in some cases, deliberately bad customer service, were made by the client’s own motor insurance company.
In other words, by the insurance company to which the client had, in good faith, paid monthly insurance premiums for the insurers to insure the client’s vehicle and act in the client’s best interests.
Summary
Do not blindly assume that your own motor insurers will always act in your best interests.
In the context of a service industry, the admissions made by the insurers in the excerpt above are surprising in their extremeness – wrong advice, deliberate call termination, failures to call back, and mistransferring of calls. If such things were to happen in a solicitor’s office, the professional consequences – i.e. of bringing the solicitors’ profession into disrepute – could be extreme for the principal solicitors in the business. Penalties could include fines, restriction of practising certificate and even being struck-off the roll of solicitors.
But these are the admissions that were made by a British insurance company in dealing with the complaint of a Scottish motorist, their customer.
How we can help
Should you have any questions about the information provided in this article or if you would like to have a more detailed discussion about a possible personal injury compensation claim based upon a road traffic accident in Moray, please contact us.
All initial enquiries are at no charge and without obligation. Get in touch with Peter or Marie on 01343 544077 or send us a Free Online Enquiry.
