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<h2>Avoiding Car Insurance Claims, From Being Declined</h2> <p> There was a time many years ago when a company could be paid out on an insurance claim for no reason, other than for being a good and loyal client to the insurance company. Whilst it is possible that even today an insurance company could make a commercial decision when considering a claim from a very large client, many companies are at risk of having claims repudiated.<br /><br />When a vehicle is on contract hire, the contract hire company owns the vehicle but the hirer insures it. Therefore when an insurance company refuses to pay a claim, the hirer becomes responsible and contract hire companies are seeing this happen more frequently. In the case of minor accidents, insurance companies rarely look too closely at the circumstances. However in the event of a serious accident, it makes very sound financial sense for the insurance company to examine the circumstances of the accident and take a close look at the driver. An insurance company is answerable to its shareholders and its shareholders would not appreciate it paying out claims when it has good grounds for refusing to do so.<br /><br />Most insurance company's terms and conditions state that the vehicle must comply with the manufacturer's specifications, so the vehicle must not be modified in any way without informing the insurance company. That is why it is advisable to always fit the manufacturers recommended tyres. Employees should be told that under no circumstance should there be any modification made to the engine of their company car. It is not unheard of for employees to have the engine of their company vehicle "chipped" this is a process that changes the way the engine control unit manages the engine and increases the brake horsepower of the vehicle. This would give an insurance company a very good reason to refuse to pay out on a claim, if the vehicle is involved in an accident. In any event it will invalidate the vehicle's warranty.<br /><br />It is important to remember that an insurer requires the insured to keep a vehicle in a roadworthy condition. A high proportion of company cars are on contract hire; they are serviced regularly and are generally under warranty. Any faults or potential faults are normally rectified, by the dealership under the manufacturer's warranty, when the vehicle is in for its service. Some companies purchase and keep their company cars for up to 4 or 5 years. Ensuring that the vehicle is always in a roadworthy condition is much more difficult under these circumstances, particularly if the mileage is high.<br /><br />Of course it is not only the lack of maintenance that can cause a vehicle un roadworthy; depending on the circumstances of an accident, having the wrong tyre pressure, where the tyres are unevenly, over or under inflated could cause the insurance company to deem the vehicle to be in an un roadworthy condition. Incorrect tyre pressure can affect road holding, steering, braking and the overall handling of a vehicle and in an accident can often be a contributory factor, particularly in wet conditions. If a vehicle is involved in an accident, it is not unusual for the insurance company to check that the car is roadworthy; it is in their interests to do so. Of course if the circumstances of the accident were such that it is clear that the accident has been caused by another vehicle, this would not be a factor.<br /><br />If an accident happens under different circumstances, for example where an employee's car crashes on a bend or skids out of control and causes the accident, then it is quite reasonable that the insurance company will want to ensure that the vehicle was in a roadworthy condition. Incorrect tyre pressure is one of the most common causes of newer cars being un- roadworthy. Employers should advise their employees that tyre pressures need to be checked regularly. This is best done in the morning whilst the tyres are still cold. Another good reason for ensuring that tyre pressures are correct is that it can significantly reduce the company's fuel bill.<br /><br />Company cars should have their tyres checked on a regular basis to ensure that wear is within the legal limit. In the past servicing was carried out on average every 12,000 miles, now manufacturers have extended the intervals and it can even be 20,000 miles. Clearly with intervals this long the company cannot rely on the serving department advising them when tyres have insufficient or uneven wear. Driving the vehicle with the wrong tyre pressure can cause uneven wear.<br /><br />Another risk to the company is employees driving whilst under the influence of alcohol or drugs, an insurance company will not generally pay out if there is an accident under these circumstances. How many of your employees stop of for a "couple" of pints on the way home? In a study carried out in 1998, alcohol was a factor in 10% of fatal motorcycle accidents and 19% of cars and other vehicles involved in fatal crashes. In spite of greater awareness nowadays there are still drivers who seriously believe that they drive better after consuming alcohol. The evidence however shows that alcohol seriously impairs psychomotor skills and affects the brains ability to process information.<br /><br />The same will apply if the employee is under the influence of drugs. The company should also take into account that an employee may be taking a prescription drug that could affect their ability to drive safely. It would perhaps not be unreasonable for a company to check with an employee if they feel this could be the case. With the new legislation that comes into force in April 2008, the company is responsible for ensuring that its employees are safe when driving on company business.<br /><br />Negligence is another area where an insurance company will often refuse to pay out. This is quite understandable because when an insurance company agrees to take on a risk, they will not have allowed for the risk of an opportunistic thief taking advantage of a driver's negligence; where they leave their keys in the car whilst they pay for their petrol, or if they leave it parked on the road, or on their drive with the engine running. In spite of the risks, many company car drivers do this in the winter, so that the heating works as soon as they get into the car. Many have found themselves having to explain to their employer, that the car was gone when they came out of their house.<br /><br />It is important to ensure that all your drivers have a current driving license and that previous convictions like drink driving, if required by the insurer, have been declared. Some employers have never seen more that a photocopy of their employees' driving licence, others take a photocopy of the original and hold it on file. This is very unsatisfactory from the company's point of view. There have been cases of it emerging after an accident that the employee was driving whilst disqualified.<br /><br />If a contract hire broker is being used to source the company vehicles, most established contract hire brokers offer a licence checking service, if not there are other companies that specialise in providing a licence checking service. Regularly checking an employee's driving licence is the only way a company can be sure that this type situation does not arise. An employee could be disqualified, or have accrued other convictions after the company has taken a copy of the licence. It is important to have these checks carried out not only to ensure the company's insurance is not invalidated but also to protect the company in view of the new legislation.<br /><br />If an insurer rejects a claim and the insured feels that the insurance company is unjustified, the case can be taken to The Financial Ombudsman. There have been many claims that insurance companies have refused to pay that the Financial Ombudsman has ruled should be paid, unfortunately many claimants just accept the insurance company's decision. A client of ours had his car stolen in a carjacking incident, the insurers refused to settle the claim for the Mercedes Benz, valued at more that 60,000. They told the client that they had repeatedly written to him advising him that he must fit tracker to the car, which he had failed to do. However when it was pointed out to the insurance company, following legal advise, that they had not told the client that he would no longer covered in the event of theft, the insurance company settled the claim in full.<br /><br />In summary it can help to avoid claims being declined by observing the following: Ensure that the vehicle is properly and regularly maintained; Tyre pressures should be checked at least every two weeks, preferably when cold; No modifications should be made to a vehicle, without informing the insurance company; Drivers must take action if a warning light is illuminated; Employees should be warned of the dangers of driving whilst in excess of the legal limit for alcohol consumption; Drugs, including prescription drugs, can affect a driver's ability to drive safely. Drug testing is now used by some companies, up to 80% of large US companies test for drugs, although there are concerns regarding false positives; Vehicles should never be left unattended, with the engine running; Use one of the specialist companies or a contract hire broker to regularly check employee's driving licences. Observing these points will at least help to avoid motor insurance claims being repudiated<br /><br />Negligence on the part of the driver can often be the cause of an insurer declining a claim. The was a case reported in America where a gentleman having purchased a motor home, set off on a trip and once on the open road, engaged cruise control and left the controls to make a drink. His understanding of cruise control was that the vehicle drove on its own. Of course the insurance company declined to pay for the subsequent damage, after the vehicle crashed, however he was able to successfully sue the motor home manufacturer, claiming that they should have told him that cruise control doesn't drive the vehicle for you. <p style="margin-bottom: 0; margin-top:5pt"> <font face="Arial" style="font-size: 10pt">Article Source: <a href="http://www.ArticlesMaker.com">ArticlesMaker.com</a></font></p> <h3>About the Author</h3> For more information about contract hire, lease purchase, finance lease or vehicle hire purchase in the UK please contact Bowater Price plc http://www.bowaterprice.com Tel - 01494 536 536.

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