I’ve received a letter from an insurance company seeking to recover money from me because someone was injured in a motor vehicle accident. What do I do?

Your heart drops. You’ve received a letter from an insurance company or their lawyers seeking to recover money from you, and you don’t know what to do or how to feel.

In our experience, it is not unusual for clients to be beside themselves and have many loaded questions, particularly if the motor accident happened a long time ago.

If you’re in this situation and you’re reading this article, the first step is to simply breathe and compose yourself. The next step is to read the contents of this article below and call our firm to discuss the legal aspects of your matter with us for a free 20-minute consultation.

This article is general in nature but will provide you with a basic understanding of your situation so that you’re better prepared when you’re ready to speak with us.

It is important that if you find yourself in this situation you obtain independent legal and financial advice as soon as possible.

 

Can the insurance company claim money from me?

The starting point of this article is often the most frequently asked question we receive from clients, that is can the insurance company claim money from me?

The short answer is that they can but only in certain circumstances and generally any costs that the insurance company reasonably incurred on a claim for personal injury. Insurance companies have rights of recourse under the Motor Accident Insurance Act 1994 (Qld) (‘the Act’).

The Act principally governs claims for compulsory third-party (‘CTP’) motor vehicle matters and provides a scheme for statutory insurance for vehicles that do not have compulsory third-party motor vehicle insurance and are considered unidentified.

 

What are the circumstances that an insurance company can claim money from me?

To answer this question, it starts with a definition. An ‘insured person’ is mentioned throughout the Act. This term is defined under section 4 of the Act as:

1. a person who is insured under a CTP insurance policy or, if the person is dead, the person’s personal representative; or
2.  a person whose wrongful act or omission causes personal injury for which an action lies against the Nominal Defendant under this Act or, if the person is dead, the person’s personal representative.

Sections 58(1) to 58(3) of the Act set out the circumstances for an insured person. The circumstances are as follows:

Section 58(1) of the Act:

1. Personal injury arose out of the motor vehicle accident; and
2. The insured person was using the motor vehicle without the owner’s authority, had no lawful justification or excuse and had no reasonable grounds to believe that the insured person had the owner’s authority for using the motor vehicle or had no lawful justification or excuse for using the motor vehicle.

Section 58(2) of the Act

1. Personal injury arose out of the motor vehicle accident; and
2. The insured person intended to injure the claimant or some other person.

Section 58(3) of the Act

1. Personal injury arose out of the motor vehicle accident; and
2. The insured person was the driver of the motor vehicle at the time of the accident;
3. The insured person was unable to exercise effective control of the motor vehicle at the time of the accident because of the consumption of:
   1. alcohol;
   2. a non-medicinal drug or a combination of non-medicinal drugs; or
   3. a combination of alcohol and non-medicinal drug or non-medicinal drugs.

 

Money claimed by the insurance company

An insurance company may claim, as a debt, from the insured person any costs reasonably incurred by them on a claim for the personal injury.

For section 58(3) the insurance company is limited to the costs reasonably incurred that are reasonably attributable to the insured person’s in ability to exercise effective control of the motor vehicle.

 

Can the Nominal Defendant claim money from me?

If a motor vehicle is not insured under a CTP insurance policy or is unidentifiable the Nominal Defendant usually takes the place of a person who should have been insured under a CTP insurance policy. The Nominal Defendant is a statutory body and would pay out motor vehicle claims involving personal injury where a motor vehicle is not insured under a CTP insurance policy or is unidentifiable.

Under section 60 of the Act, the Nominal Defendant has rights to recourse for uninsured vehicles. Under section 60(1) of the Act, the Nominal Defendant may seek to recover, as a debt, any costs reasonably incurred by the Nominal Defendant on a claim for personal injury involving an uninsured vehicle from the owner or driver (or both) of the motor vehicle.

Section 60(2) of the Act provides a defence for the owner and the driver if the Nominal Defendant takes action under section 60(1).

Subsection 60(2)(a) requires the owner to prove that the:

1. motor vehicle was driven without the owner’s authority; or
2. owner believed on reasonable grounds that the motor vehicle was insured.

Subsection 60(2)(b) requires the driver to prove that the driver believed on reasonable grounds that the driver had the owner’s consent to drive the motor vehicle and that the motor vehicle was insured.

It is important to realize that the Nominal Defendant may have other rights to against the person whose wrongful act or omission caused personal injury. This is reflected in section 60(4) of the Act.

 

I think one of the above circumstances applies to me. What should I do?

The next step is to seek independent legal advice from solicitors who are competent, experienced and can provide you with the high level of care and consideration you need.

We do not recommend ignoring letters from the insurance company or their lawyers. If you have received a letter it is often may be the best opportunity to resolve a matter. Failing to take appropriate action if an insurance company sends you a letter may result in them commencing court proceedings. In general, it is much more cost-effective to resolve a matter out of court than to let it proceed to court.

Depending on your circumstances, you may also need independent financial advice.

While our firm can assist you with the legal aspects of your matter, we do not provide financial advice but can refer you to financial advisors who can.

 

Next steps

We offer a free 20-minute obligation free consultation to discuss the legal aspects of your matter. We recommend that if you are in this situation you obtain independent legal and financial advice as soon as possible.

Feel free to call our firm on 07 5532 3133 to speak with one of our litigation lawyers.