Research specialist Defaqto analyses the provision for accident management in private motor policies when the car is undriveable
As customers the time when we value our insurer the most is when the worst happens.
This, however, may have been overlooked by insurers in their advertising.
For years, insurers have focused on saving money and providing customers with the cheapest quote, but does the cheapest quote really mean the best quote?
Insurers should consider how useful their services would be in the following (possibly extreme but by no means unlikely) case.
A family with small children travelling to Scotland on holiday late at night in the pouring rain, are involved in a rear end shunt. No one is injured, but the car is undriveable, it's 10 miles from the nearest garage, and the children are tired and scared.
What would the insurer do to help these customers? It's times like these which really show what you are getting for your money and the value of an excellent claims services.
Almost every insurer these days has an emergency helpline - most available 24 hours a day. However, provision may vary from giving advice as to how to claim, through to arranging for recovery of the vehicle and getting the customer home.
A vital benefit must be provision for recovering the damaged vehicle, at the very least to get it off the road and to a repairer. Most policies will pay the cost of this transport, but not all insurers will arrange this, and often it doesn't happen straight away. Some will simply arrange for the car to be picked up when it's convenient for their recommended repairer.
The best policies provide for the insured and passengers to be transported to their home address or on to their intended destination. Usually there are limits on the number of passengers which can be transported, and this may not be sufficient for all customers.
Courtesy cars
A common limit is five passengers - not much use to the growing number of policyholders with seven or eight-seater people carriers.
Access to courtesy cars is now standard in almost every motor policy, although subject to a whole series of caveats, such as:
- Only from recommended repairers - Only when the vehicle is booked in for repair
- Only if the repairer has one available
- Only a class A hatchback.
Some insurers have moved away from offering courtesy cars as standard, and give their customers an optional (and chargeable) guaranteed hire car for a fixed period - typically 14 days.
Problems with this approach arise if the repairer cannot repair the car within the 14-day hire period - the customer must return the courtesy car without having a replacement vehicle thereafter.
For most courtesy cars the issue arises of when it is provided. Many policyholders making use of these for the first time may be surprised to find out that they will receive only when the repairer has started work on the repair. Not an issue for driveable vehicles, but busy repairers are unlikely to give out courtesy cars before the repair work is booked to commence.
Many insurers presented with a claim for a theft or total loss will not provide a courtesy car.
The customer is left without transport until the insurer settles the claim, or until the stolen car is found or classed as permanently lost.
A small number of insurers will offer a replacement car in these circumstances, however a growing number only offer this cover as a chargeable add-on.
Not all of these policies are as generous as they first appear, however.
A number of insurers will provide a total loss courtesy car "until we make an offer to settle a claim" - with, of course, no guarantee that their first offer will be a reasonable one.
Most insurers make claims that repairs are "guaranteed", typically for around three to five years. The majority now state that "all" repairs are guaranteed while a small number will cover only the bodywork. This, however, rarely forms part of the contract and rarely makes clear the true extent of the guarantee.
There are a wide range of accident management services available at claim time. These are often overlooked in marketing to potential customers.
Insurers who want to add true value to their policies should consider how they can help their customers when disaster strikes and use that in their marketing.
Defaqto's view
An ideal motor policy would offer the following services as standard:
- 24 hour freephone helpline
- Provision of an emergency recovery service
- Onward transportation service for all passengers
- Replacement vehicle from time of the accident to redelivery of the repaired vehicle
- Total loss replacement vehicle until the claim is settled
- 'All' repairs guaranteed
- Repairs guaranteed for three years as a minimum.
How does your company stack up against this?
