Q What is uninsured loss recovery?
A It is a form of legal expenses insurance that helps you recover money you have paid out following a car accident that was not your fault and which is not covered by your own motor policy. This can be compensation for personal injury, the excess on your policy, cost of car hire, taxis, public transport, phone calls, damage to your clothes.
Q How does it work?
A Your comprehensive policy indemnifies you for repairs to your car, which your insurer gets back from the guilty side, but will not pay for out-of-pocket expenses. When you are the innocent victim of an accident, the guilty driver's insurer will pay these but not without at least checking and possibly fighting. Uninsured loss recovery provides someone to argue your case for you, but you must keep evidence of any money you spend.
Q Why doesn't my own insurer pay?
A The excess is an amount you agreed to pay to reduce your premiums. However clear-cut the circumstances, your insurer treats you as guilty until proved innocent and immediately reduces your no-claims discount, probably by 20 per cent. If you need to renew your policy before the claim is finalised, you have to pay higher premiums. Once your innocence is accepted, your insurer refunds the overpayment.
Q Does uninsured loss recovery come automatically with motor insurance?
A No, but you can buy it through your insurer or from a broker. It is usually called legal expenses insurance.
Q How much does it cost?
A It depends on the ceiling for legal costs (£50,000 or more) and varies between £13 and £20 a year.
Q Do I have to get permission before hiring a car?
A Some insurers provide you with a replacement car while yours is off the road. If not, check: your insurer is unlikely to give firm assurance that your costs will be refunded. Any hired car must be reasonably priced: even if your Rolls-Royce is damaged, the other side could argue against your need to hire another Roller.
Q Can I get my money back if I don't have uninsured loss recovery?
A You're entitled to compensation if you weren't to blame for the accident, but will have to negotiate it yourself.
Q Can I be confident of getting my money back?
A If you are a little to blame for the accident, you will not get all your expenses. You may get nothing if the other driver is uninsured. The other side will pay only for losses that can be attributed to its policyholder's actions. If you spend weeks disputing the write-off value your insurer offers for your car, the other side will not refund costs during that period. If you eventually negotiate a better price, you can claim these costs from your own insurer.
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