Direct Line - Holiday Injury Claim

[notlam]

I was involved in an accident while on holiday in Portugal 5 years ago and suffered a long term back injury, which I still suffer from now.

 

Upon returning from holiday I started a claim against the small villa rental company through Direct Line (my travel insurers).

 

The claim ended up in court and I was subsequently awarded £8k, which was payable by the holiday company.

 

Before paying out (or rather than pay out) the holiday company went into voluntary liquidation. So far I've never received a penny of the money I was awarded.

 

Direct Line say there's nothing more they can do. Yet as far as I am concerned I have an injury still and have lost £8k when fully insured. So it seems unfair.

 

Is there any other way I can get this money?

[Bookworm]

Well, it seems to me that your insurance contract is actually with DL, not the holiday co, so I fail to see why you shouldn't get your money. The fact that DL may end up 8K out of poclet because they can not recoup their loss is really not your problem. You paid for holiday insurance, you had to make a claim under the terms of that insurance, insurance pays up. Thats' where you involvement ceases.

 

HOWEVER: It would depend on what your insurance was for. Was it a legal costs cover? Under which they would assist you with legal help and costs when it came to court? Or was it a full travel cover, medical assistance, curtailment, death benefit et al?

Do you still have a copy of your insurance documents and T&Cs? I'd like to have a look at them before I can tell you more, as I don't want to raise your hopes for nothing.

 

If you can scan them, please can you copy them to me at:

 

research@bankactiongroup.co.uk

 

and I'll get back to you after having a good read through.

[notlam]

I had a good read through my Travel Insurance policy (many times) and it only seems to cover my legal costs, which Direct Line paid.

 

However, I also had another read of my Home Insurance policy (also with DL) and just found this:

Contents Insurance:

 

G-Liabilities, 4 Liability of others:

We will pay the amount of any outstanding and irrecoverable award of damages and costs obtained after a defended hearing made in a court in the United Kingdom if such award has not been paid to you within three months of the date of the award.

Do you think this covers it?

[Bookworm]

No, as it is for contents.

 

If you can, I'd still really like to read through your policy. I used to read those day in day out in a previous incarnation... You'd be surprised...

 

PS: Moved thread to Insurance Forum.

[notlam]

Thanks ML. I'll scan them and send them to you.

 

Thanks again.

[notlam]

Hi ML/Bookworm,

 

Did you receive my email with the Insurance policies as attachments?

[Bookworm]

Sorry I didn't reply earlier, a combination of unstable broadband and daughter moving out earlier than planned has rather thrown a spanner in my usual timing.

 

Yes, I did receive them.

 

It is not good news. The travel insurance policy you have has very limited terms under which they would pay out, basically your death or loss of limb, and "permanent and total disablement preventing you from engaging in any gainful employment". So the question is: Did your injury stop you from working? If not, there's nothing to make them pay. You were very unlucky with the insurance you had, as it has such restrictive terms under which they would pay out.

 

As far as the company from which you actually won damages, I hope you are at least listed as one of their creditors, and hope that once their other creditors have been paid, there'll be something left for you, but as we all know, there's no guarantee on that.

 

I am sorry not to be able to work a miracle for you. If you haven't yet, I would suggest get another opinion, from the CAB maybe, see if they can spot something I have missed.

 

Good luck, and if something else comes up, do come back and let us know.

[notlam]

Thanks unfortunately, or I should say FORTUNATELY, I am able to continue working even though my back pain seems to be constant now.

 

I am currently visiting an Osteopath every fortnight and this seems to be easing the discomfort, although these visits continue to seriously drain my bank account

 

Thanks again for giving me your opinion.

[barracad]

Sorry can't help you with the insurance part, but I would recommend hydrotherapy instead of (or in addition to) osteopathy - it really does work wonders.

[notlam]

Thanks Barracad. I'll try anything!

[mooreda]

having read your predicament, bookworm is unfortunately wrong on this issue and you may be interested to learn that as a former Senior Claims Advisor having worked for numerous Leading Insurers, most Home Insurance Policies provide additional cover (usually under Contents), for "Court Awards you cannot get back", up to a limit usuallly of £250,000.

 

For example, my own Home Insurance Policy Wording stipulates; " we will pay up to £250,000 for all amounts which have been awarded to you in a Court within the UK which have not been paid within three months of the date of the award".

 

Having read your policy wording because the wording can vary with each insurer, you may have a claim. If the policy was in force at the time of the Court award then you should make further enquiries. PLEASE NOTE! however this additional cover is rarely claimed and most Claims Handlers at Insurance Companies may not have a clue what you're talking about if you were to phone them to claim under this section as they're probably used to dealing with claims for peoples TV's, Videos, Carpets etc!

 

I would write a letter to the Insurance Company addressing it to the Technical Claims Unit. Explain that you were awarded a sum in Compensation through the Court but have been unable to claim your award because the Defendant went into Adminstration/Liquidation. Explain that you have read your Insurance Policy and understand that you can claim the sum that was awarded to you under section G Liabilities, "We will pay the amount of any outstanding and irrecoverable award of damages and costs obtained after a defended hearing made in a court in the United Kingdom if such award has not been paid to you within three months of the date of the award" If the insurance company refuse to cover the claim and you feel the reason is not justified, take the case to the Financial Ombudsman Service. Let me know how you get on.

[Bookworm]

bookworm is unfortunately wrong

 

Not at all. If I am wrong, I will be delighted for OP. My area of expertise was travel insurance, and I would LOVE to be proven wrong in this instance, if it means OP has a chance of getting his money! ;-)

[mooreda]

it's not the Travel Insurance that provides the cover - it is the Home Insurance that provides the cover. God I wouldn't expect Travel Insurance to cover this incident in any event - Travel Insurance Companies try (or should I say their appointed claims handling agents) and riggle out of paying anything anyway - the Police Report exclusion makes me laugh all of the time - they try and apply this exclusion to many claims even if it would be ridiculous in light of the circumstances of the claim. For example, I recently dealt with a complaint on behalf of a friend who is older than me. She had fell down a couple of steps at the Hotel. Not only did she twist her ankle she smashed her Gucci Watch. Upon making a claim to the Travel Insurance Company, providing them with proof of travel, purchase and the fact the watch was available to be inspected, they wanted a Police Report! I explained that this was not a reasonable request and then they then wanted a report from the Tour Operator as well! Again I explained this was not reasonable and they could inspect the damage to the watch if they pleased. Eventually after 13 weeks of protracted correspondence a cheque for the pitiful sum of £250 was issued. The balance of the claim was claimed from the Household Insurance Company Norwich Union. They (NU) agreed to either replace the watch or issue a cash settlement but NU expected the customer to pay the Excess and additional sum of £250 towards the replacement which was the sum received from the Travel Insurance Company. This was agreed and the claim finalised within 4 days! I consider it an appalling state of affairs that Travel Insurers will do whatever is possible to delay the settlement of a straight forward claim like this. I escalated the case to the FOS and they blasted the Travel Insurance Co for their failure and also not taking my complaint seriously enough. They had to pay £500 in compensation for the appalling service and me £150 in respect of my time and inconvenience. This gives you a taste of how wrong Travel Insurers are and I have helped a lot of people with their claims and have had to resort to taking similar action.

[notlam]

Thanks. I haven't given up on this yet.

 

The section that clearly covers it in my DL Home Insurance policy reads as follows:

 

G-Liabilities

1 We will pay all sums for which you or any member of your family become legally liable as occupiers of your home or in any other personal capacity for accidental:

a) death or bodily injury to any person.

b) loss of or damage to material property occurring during the period of insurance shown in the schedule.

 

4 Liability of others

We will pay the

amount of any outstanding and irrecoverable award of damages and costs obtained after a defended hearing made in a court in the United Kingdom if such award has not been paid to you within three months of the date of the award.

We will only make payment if G1 of this section would have insured you had the award been made against you or any member of your family.

 

DL is saying that the last sentence (above) categorically means they don't have to pay me but it seems unclear and ambiguous to me and open to interpretation when surely, my loss here is the very situation for which "4 Liability of others" is intended?

[girlynutnut]

Notlam, as one of the "wriggling" Senior Travel Claims Handlers that Mooreda refers to (!), I would advise the following. The "permament and total disablement" referred to earlier applies to the Personal Accident section of your travel policy. You will be unable to claim the benefit under the section (usually £25k or £50k) unless you are unable to work again, which is clearly not the case.

 

You may have claimed Medical Expenses and Abandonment from your insurer whilst you were out there.

 

I would imagine your claim was pursued under the Legal Expenses section. This provides cover (usually up to £25k) for legal costs in pursuing a personal injury claim following an accident whilst on holiday. The insurer will often appoint a solicitor to act for you and possibly an agent abroad who is familiar with that country's legal system. As well as getting compensation for you, they'll try to get back any money they paid out for medical expenses, etc.

 

However, there is usally a clause in the wording that states the insurer will only pursue the claim if they think there is a "reasonable prospect of success". In this instance, it sounds like they have withdrawn further cover as they do not think it is economical to pursue the third party as they've gone into liquidation.

 

To be clear, your PI claim is against the tour operator or holiday company, not your insurer. If you want to pursue it, you need to go after them, not Direct Line. It sounds to me like Direct Line have done everything they're obliged to within the terms of the policy. Sorry!

 

With regard to your Household wording, the Liabilites section covers you if somebody sues you for negligently causing their injury. Your Legal Expenses may cover you - I'm happy to review the wording if you want to email it to me.

[notlam]

Thanks girlynutnut.

 

I agree with you about the Travel Insurance policy - it covered my legal costs. DL did appoint a solicitor and paid all the legal costs right up until an award was made in court. So that part of this is fine.

 

However it still leaves the second part regarding the "damages award" which remains unpaid and has been declared as unrecoverable from the defendant (the holiday company) because it went into liquidation.

 

I believe this is cause for a separate and unrelated claim under my Home Insurance policy, "liability of others" section, as per the extract from the policy (printed earlier).

 

So far DL is saying this clause in my Home Policy doesn't cover this because "if the situation was reversed it wouldn't be covered". I really dont understand what they are saying here. Can anyone who understands these things explain it for me please?

[Bookworm]

o far DL is saying this clause in my Home Policy doesn't cover this because "if the situation was reversed it wouldn't be covered". I really dont understand what they are saying here. Can anyone who understands these things explain it for me please?

 

Ask them IN WRITING to clarify what they mean by that, in terms a layman can understand.

 

I don't know where the truth is in previous posts, seems 2 insurers, 3 opinions, so I'll butt out of that.

 

What I do recognise is letter-fluff (like bum-fluff, only smellier), and the above sentence looks like it...SO what you do is put their back to the wall, and call them up on it. In writing.

[notlam]

Yes, I wrote to DL on 13/8 to ask them to pay my unpaid damages award.

 

Haven't had a reply yet.

[girlynutnut]

This is known as reverse liability. What it means is that the insurer will only pay unrecovered court awards where you would have been covered for legal liability under this policy had the award been made against you. An example is if you were awarded damages after being run over, they wouldn't pay unrecovered court awards, as your household policy wouldn't cover you if you ran someone over - it would be referred to your motor policy So the circumstances of the accident have to be something you would have been covered for if it was your fault. I hope that makes sense! My hubbie is an underwriter and wrote a paper on this subject for his profession exams!! I think you'll struggle to get them to pay out on this one. You could refer it to the FOS but I think you'd be wasting your time TBH. I also note that the award has to be made by a court in the UK. Was this the case or was it a Portugese court?

[notlam]

So, if I understand it correctly, under this "reverse liability" the fact that the award has not been paid (and wont be) is completely irrellevant. It is what the award was originally awarded for that counts?

 

In this instance, I had an accident while visiting someone elses property. I suffered long-term injury. The accident was the fault of the "owner" of that property. The owner was found to be liable and an award was made against him. The owner then becomes declared as insolvent. So I get nothing.

 

So if, for example, you visit my house and while here you sit in a chair, which then collapses causing you injury. You then sue me and are you are awarded damages. My home insurance then covers me and pays you the award under section G-Liabilities.

 

So what's the difference?

 

Yes, it was awarded in Horsham County Court.

[girlynutnut]

If the accident had happened in this country, you'd be covered. But because your household policy wouldn't usually cover you for incidents abroad, I'd guess that's why they're kicking it out. It's hard to be more certain without seeing the exact wording and I can't access it on their website. Can you email me the relevant page and I can check it in more detail? Alternatively, I would request a full explanation from their Customer Relations / CEO.

[girlynutnut]

I've managed to have a look at the wording this morning. It does seem ambiguous. If I was you I would write to DL CEO arguing that your award was made for injury whilst staying in a third party's property and that you consider the circumstances such that you would have been covered had the award been made against you rather than in your favour e.g. if s third party had injured themself in your home. Ask for a thorough explanantion of the repudiation.

 

I note the wording refers to a "defended" hearing. May be worth considering whether the other side put up a fight or did you just get a default judgement.

 

Hope that helps.

[notlam]

After 8 weeks of waiting I've now received a letter from DL, explaining why they wont pay out on my claim for unpaid damages:

 

"There are a number of exclusions that are listed. The specific exclusion that will apply in this particular case will be

 

But not liability:-

 

iii) Arising from:

 

3) any profession, business or employment.

 

"Having given full consideration to the facts of this case the policy exclusion of profession business and employment will apply. It is unfortunately for this reason that the Direct Line Home Insurance policy would not be able to financially respond to the Judgement debt against Premier Villas Ltd."

 

Still seems ambiguous to me.

[Bookworm]

Ambiguous? More like incomprehensible... Have those people not heard of Plain English?

 

Have you gone down the Ombudsman route? I think DL are planning to railroad you until you give up... And strangely enough, the Insurance Ombudsman has teeth and is actually not scared of using them. (I wish the Banking one would pay attention and copy them!)

[mooreda]

I agree with Bookworm and that this case should be referred to the FOS. I firmly believe Direct Line have completely missed the point and don't know what they're talking about