A (Non-Boaty) Question for JFM that may also relate to boats in principle.

[Floating Preferably]

Likewise, on the same skiing forum people are worried that a Mulled Wine at lunchtime will invalidate their insurance based on a generic alcohol exclusion (i.e. if they have an accident in the afternoon). I believe that for an insurer to refuse a claim on this basis, the person has to be drunk and for this to have been the cause of the claim. I believe the FOS readily accepts that when people are on holiday they will consume alcohol and this is very much the norm and therefore not grounds for refusing a claim. Can you confirm?

I have just checked my latest policy update, and it mentions that they do not expect people to give up alcohol, but if you get drunk so that your judgement is seriously impaired, and that lack of judgement results in a claim it may be rejected. On another point they will not cover any claims from 'deliberately jumping off a moving vehicle or building, or to another part of a building and falling, regardless of height, unless your life is in danger, (maybe escaping from a fire is ok)
This does not seem at all unreasonable. Insurance should be for emergencies and accidents, not sheer stupidity. So Petem, enjoy your holiday:encouragement:

 

[petem]

I can't confirm as I have no knowledge of any precedents. In contrast, when I commented on "reasonable care" etc above I was working from (some) real knowledge of how FOS deal with clauses that have a "reasonable" based condition

Ref the alcohol, it would as ever depend on the policy wording. In general, if there is no specific "no alcohol" rule in the policy and instead there is just a "you must not consume excessive alcohol" type of rule then you would apply the Man on the Clapham Omnibus type of test which would mean a mulled wine at lunchtime wouldn't invalidate the insurance. The FOS might be even more generous to the policyholder than the MOTCO test.

I get the sense that some winter sports forum posters need to take a step back. These insurance policies are like liferafts - you buy them but you hope it is a 100% waste of money. I mean, if I rocked up to some of these ski parties and waved a fancy bespoke insurance that I'd just bought at Lloyds and it said "you are still covered and we will fly you home in a private jet if you break your back while skiing, even if you got totally lashed on 3 bottles of Mersault at lunchtime", they would treat me as a hero. A lot of these skiers would buy this policy then get lashed and then hit the black runs yelling "It's ok I'm insured", like the insurance is a special force field protecting them. They need to remember that the maximum benefit you'll ever get from an injury-based insurance policy will be zero net money (because the policy merely pays your costs), yet you have to endure a smashed skeleton. That's quite different from most other insurance, if you think about it. I mean, if your boat sinks you get the price of the boat and buy a new one so you're basically back where you started. But if you have a ski smash, the insurer pays for merely the financial aspect of your loss. You still have to endure the broken bones. Thus, the question of how much mulled wine to drink ought to be a personal pain-avoidance decision, not a decision made by reference to what your insurance policy says.

Incidentally as you know most boat insurance policies (at least in the UK) contain a condition saying the skipper must not be under influence of alcohol or drugs, but the wording of all that I have seen doesn't exclude a nice glass of wine at lunchtime

My annual travel insurance includes the following exclusion that appears to relatively clear....

"8. Alcohol abuse You drinking too much alcohol or alcohol
abuse where it is reasonably foreseeable that such consumption could result in an
impairment of your faculties and/or judgment resulting in a claim. We do not expect you to
avoid alcohol on your trips or holidays, but we will not cover any claims arising because
you have drunk so much alcohol that your judgement is seriously affected and you need
to make a claim as a result."

But many policies are far less prescriptive, for example....

"Any claim arising directly or indirectly from using alcohol or drugs (unless the drugs have been prescribed by a
doctor) or you being affected by any sexually transmitted disease or condition."

This is an example of how the FOS deals with Alcohol....

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/29/29-travel.htm#291.

In the example given, the insurer's exclusion clause stated:

"[We will not pay] for claims arising from the influence of intoxicating liquor or of a drug or drugs unless prescribed by a registered medical practitioner."

The insurance ombudsman stated:

"We interpreted the phrase "influence of intoxicating liquor" as indicating a state of drunkenness and/or lack of control over one's actions. It was designed to exclude claims that arose from the insured person being drunk, not from the mere consumption of alcohol."

So providing the insured is not drunk and is under control of his actions I suggest there is no reason why the insurer should have a valid reason for refusing a claim. Furthermore, if someone had an accident after a single mulled wine with lunch then surely it would be absolutely impossible for the insurer to prove that the accident was as a result of your alcohol consumption?

Personally I don't regard an insurance policy as a "special force field" but having to cough up £25000 for to be helicoptered off a mountain and flown home would be far more problematic for me than a broken leg*!


* Assuming it was a straightforward break with a quick and full recovery!

 

[petem]

I have just checked my latest policy update, and it mentions that they do not expect people to give up alcohol, but if you get drunk so that your judgement is seriously impaired, and that lack of judgement results in a claim it may be rejected. On another point they will not cover any claims from 'deliberately jumping off a moving vehicle or building, or to another part of a building and falling, regardless of height, unless your life is in danger, (maybe escaping from a fire is ok)
This does not seem at all unreasonable. Insurance should be for emergencies and accidents, not sheer stupidity. So Petem, enjoy your holiday:encouragement:

What, you mean I'll have to avoid the drunken Parkour? As I said earlier, I'll be wearing a helmet, and I'm getting too old to drink vast quantities in the evening. Perhaps half a shandy or two.

 

[jfm]

Pete that's a very comprehensive review and it ought to be in a legal textbook as the definitive summary of the topic.

Very pedantically, where you said "absolutely impossible for the insurer to prove..." remember that although at the Ombudsman the burden of proof seems to be somewhat balanced if not a bit random, if it came to a court the burden of proof is on the policyholder as plaintiff not the insurer as defendant. (Actually it is slightly more complex than that because this is an exclusion, and so you teeter into the world of reversed burden which law school students study usually in the context of self defence in a murder trial, but let's not go there in this thread. Just remember that generally BoP is on policyholder).

 

[silverdee]

As those you who know me will be able to testify, I can’t type for toffee so this is courtesy of my PA’s 1 million times faster typing ability.

PeteM – I wouldn’t worry too much about reasonable care exemption in the travel policy. I agree with comments made by JFM (although it pains me) and others, and the rule is that the insurer seeking to rely on the rather open ended undefined clause loses if the Court feel it is too ambiguous. In most insurance contracts the very thing you are insuring against is often your own carelessness. A comprehensive motor policy allows you to make a mistake, not be careful, be drinking a cup of coffee and driving into your own garden wall and be covered. The lawyer in me has to say that obviously I’d actually have to read the document to be more certain but I wouldn’t worry a lot in these circumstances about the wearing or not of a helmet.

One sees this debate a lot now with cycle helmets with third party insurers regularly trying to allege an element of contributory negligence so that they only have to pay a percentage of somebody’s claim when their motorist knocks a push cyclist off. This is quite a fast moving area of case law in the accident world just now and from memory there may be one case where the cyclist lost a bit, but the general weight of case law at the moment would not uphold any deduction for contrib against a push cyclist not wearing a helmet. This argument is often confused by people who think that is because there is no legal requirement to wear a push cycle helmet, but there is to wear a motorcycle helmet (when motorcycling!) or seat belt in a car, but in fact the rules relating to contributory negligence for seatbelts arose from a case called Froom –v- Butcher which pre-dated the compulsory wearing of seatbelt legislation. So it’s certainly not beyond the bounds of possibility that we will see the law develop over the next few years so that contrib is held against say those on push bikes not wearing a helmet, and then one could see the thin end of the wedge argument for it spreading out into snow skiing, water skiing, who knows. But at this stage I wouldn’t worry too much.

By the way, he did assure me that he had never used launch control, so I can trust him right!?

Anyway, back to OnThePlane’s situation. There is loads of case law on the duty to mitigate (which is what we’re talking about here), and one key case for those who really want to do some googling is to look up Garnac Grain –v- Faure & Fairclough which I think is a 1975 or so Court of Appeal decision but I haven’t dusted off my law books to check.

There is a duty to keep losses to a reasonable minimum and mitigate even when your losses arose as a result of someone else’s negligence. Third party insurers would love this rule to mean that you need to keep your losses to a minimum but that word reasonable is very helpful here.

Some hypothetical examples might help.

Person A has a tiny, crappy cheap car worth £100, and perhaps only third party, fire and theft insurance and it gets written off by Mr Dozy. Dozy’s insurers would like to think that Person A should catch the bus to work or walk rather than say using taxis or making use of a credit hire car. They would be wrong. Also, the credit hire company are unlikely to have a 12 year old Citroen 2CV or whatever available, so they might have to put A in, let’s say a nice new Vauxhall Corsa. Not much argument but you’ve got a bit of a better car there, but you’re still mitigating using what they would call a Group A hire car - and you should expect to recover a reasonable period of hire. Normally a reasonable period of hire would be once you’ve sorted out negotiations with the third party insurer, got a cheque from them for your pre accident value, maybe had it 7 days, allowing you cash it and buy a replacement. It wouldn’t be reasonable to spend a month travelling around looking for a replacement. Your difficulty comes in that negotiation process. Say the insurers offer you £75 for the old wreck but you have a bit of argy-bargy with them with clippings from Auto-Trader and only get them up to £100 (you can play around with these numbers but you see what I’m saying), and your Corsa’s been costing on a credit hire basis, £50 a day plus collision damage waiver, plus Road Fund Vehicle licence plus VAT, plus delivery and collection at the start and end of your hire, plus the additional person insured on it, who was insured on your previous car say, and the bill’s getting a bit out of hand, that’s when you can run up against Judges taking a bit of a rule of thumb approach and saying that the costs of hire so vastly exceeded the pre accident value of your car that maybe you weren’t as reasonable as you could have been in and shaving your hire charges down a bit. Theoretically on that example, the chance of the credit hire company coming back to you for the balance does then exist, and I have seen it happen (although a lot of credit hirers will ultimately take what they get and move on, especially as they often verbally make all kinds of promises about the hirer not being responsible for charges etc., etc. that aren’t reflected in their paperwork).

Moving more to an example akin to OnThePlane. You have a £50k jeep and the accident happens, writing it off. The insurers would love you to drive round in the Vauxhall Corsa, either on a credit hire basis or perhaps if you had a courtesy car deal from your insurer/their approved repairing garage. Whilst you can do this, you need do no such thing. You are perfectly within your rights to hire a similar vehicle (whether you actually need a 4 wheel drive or not. The principle here is that you should be put back so far as is practically possible in the position you were in before the other person’s negligence). So nothing wrong with hiring a similar vehicle or a similar class of vehicle, i.e. if they didn’t have a 4x4 but give you a nice top of the line 5 Series BM, no problem, or a 7 Series, probably no problem. You don’t have to get like for like exactly spot on, but in that example if you hired a Bentley at full rate, you would probably be in trouble with mitigation.

Mitigation also comes into play when looking at period of hire and I am still not sure here in OnThePlane’s example exactly what’s happened.

You say, OnThePlane, that you contact your own insurers who put you onto some claims handling firm or claims handling solicitors? So as I see it, you have basically gone down the comprehensive repair route, i.e. asked your own insurers to pay repair costs if it’s repairable or pre accident value (less salvage) if it’s not. If that’s the case and you’ve acted with reasonable alacrity (you don’t have to be Superman here), to allow access for engineers to inspect and sort out the pre accident value argy-bargy, then you should be fine to make a recovery for the hire period. It’s not really open to the third party insurers to ultimately argue that the reason for the delay was your insurers being slow paying pre accident value, because there’s quite a lot of case law that effectively amounts to insurers who live in glass houses shouldn’t throw rocks and the Judges realising that sometimes insurance claims are delayed one day by one insurer and one day by another.

If however either by your insurers, or the accident management company/solicitors? involved you’ve been steered wittingly or unwittingly down, what I would call, the third party route, then there could be difficulties for you. There is nothing wrong with you deciding not to use your comprehensive cover and pursuing a claim direct against a third party and their insurers, but from earlier bits of the post here, I’ve detected that you might have gone down that third party route and then been trying to go back to your own insurers and sort of present the comprehensive claim because you’re not getting a fair offer from the third party insurers direct. The difficulty there is that the hire car has been ticking on the whole time, and if you’re not careful, the Judge ultimately might not feel you’ve done enough to mitigate (I’m not saying this fair, I’m just telling you what District Judges are like in the County Courts of this country, trust me I’ve been in front of a few of them).

It’s not totally impossible to make that change from looking at a third party repair route and then going back to your comprehensive insurers, you do have a contract with them, and they have to meet the reasonable pre accident value, it’s just really the hire running up whilst that bit of prevarication goes on that you need to watch. I think it’s pretty important for you to understand whether the claim is against your insurers and you’re dealing with their motor engineers, or whether it’s been punted off to the third party insurers. Either way in terms of getting proper pre accident value, you are doing the right thing with your Auto-Trader ads, the only other thing you could do is instruct one of the zillions of independent motor engineer companies to help you with a report, somebody like www.lairdassessors.co.uk would do it for £100 or something (you might or might not like the conclusions they come to, but you don’t have to disclose it if you don’t want. If you don’t disclose it, you are unlikely to recover the costs of it in any future proceedings, and if you don’t issue proceedings, you are unlikely to recover the costs of it, but it could be money well spent). Obviously the accident management company/solicitors representing you should be able to do all this for you, but it doesn’t sound like it’s going great at the moment. Remember, you can change solicitors (I’m not touting for the business, I am just saying there are lots of good firms out there and I could give you a list of names if you want).

In terms of pre accident value, I would summarise the law as this (and it is a bit of a summary because it’s a big topic). You are basically entitled to repair costs or pre accident value, whichever is the lesser, i.e. you can’t insist on them spending more to fix your car than it’s worth. The only exception to this is really if you have such a unique vehicle, you know, e.g. the actual Aston Martin from the 1960 James Bond film or whatever, that it’s so unique that no matter what the repair costs are, you can force the third party or your insurers to repair it back to full standard. If you end up with a repaired vehicle, you may have a claim for diminution in value, but as that’s not what we’re talking about here I think, I’ll move on.

The money you spent maintaining it is broadly (and I’m glossing across a lot of law here) not recoverable in that you have to maintain a car anyway, so 4 new tyres, touching up the paint etc., no matter how expensive, doesn’t really help you with value, although they should be valuing your car in good condition rather than poorer condition. If you have seriously added to or modified the vehicle, then again perhaps with expert evidence you might be able to show that it’s worth more than one without the adaptations you’ve put on (or less as JFM points out with the lime green seats example). As previous posters have pointed out, if you modify a vehicle and don’t tell your own insurers, then you’re in all sorts of difficulties claiming from them, and could invalidate the policy with your own insurer. Your claim against the third party is though what it is for the real value of the vehicle.

I hope that helps a bit.
Regards

 

[ontheplane]

Helps loads thanks Silverdee.

My claim is even MORE complicated by the fact that although my written off car was £50k new, it was 12 years old and thus not worth anything like that now....

I also would have happily accepted a 7 or 8 year old car as a loaner, but they don't rent them.....

So it's all got very longwinded.

However in a nutshell, my claims handler asked for an interim payment, the other side have paid it, and I'm handing the car back 7 days later. No e-mail from the handler to me went more than 12 hours un-answered, and the only delays were on the part of the responses from the "independent" motor engineers.

From the day of the incident, I would have taken a sensible interim payment and haggled over the value of the car later on, and I made that clear. Even if they'd offered me an interim payment of 50% of what I believed the value was I'd have still accepted it, but it was never offered.

Fortunately, I have IN WRITING that my claims handling co, who appointed the hire car co will "Recover ALL your costs who ever we appoint to supply a replacement car for you" - so I'll just kick it back at them.

Also, the car I have been given is entirely similar to the one written off, merely significantly newer.

There was never any delay in negotiating with the other side, as I never spoke to them. My claims handlers asked for an interim payment before Christmas, and only got it Monday this week.

I have never approached my own insurers, everything has been through claims handlers, and the third party's insurer.

Hopefully then, given what Silverdee's said and these points, hopefully I'll be ok!

 

[silverdee]

Yup Ontheplane,
Sounds right--if they are silly with you happy to help foc.

 

[oGaryo]

Yup Ontheplane,
Sounds right--if they are silly with you happy to help foc.

what a wonderfully generous offer, this forum is the dogs danglies when it comes to this sort of thing :encouragement: