Motor insurer relents: Evidence is critical in road accident claims

KAY GANELLIN lived through a financial nightmare after her husband had a car accident - an insurance mix-up left her hundreds of pounds out of pocket.

Ivor Ganellin, who was a private hire mini-cab driver, was involved in an accident with a Golf in April. He was turning right at a road junction, when his car was in collision with another car and was badly damaged. The cost of repair was estimated at more than pounds 2,000. The car was unusable for work, so he had to hire another vehicle to continue in business.

Mr Ganellin was insured with St Paul International, but only for third-party cover. The other driver was also insured third party with AIG Europe.

While third-party insurance covers you for damage you do to other vehicles and any injuries you cause, damage to your own car is not covered - so you have to pay for your own repairs if the accident is your fault. But if the accident is the fault of the other driver, you can claim the costs of your repair and other losses, including in some circumstances car-hire charges, from the other driver.

The Golf driver claimed against Mr Ganellin. Mr Ganellin felt that the accident was not his fault and claimed against the other driver. He had two independent witnesses to support his claim. Both witnesses were asked by the other driver's insurer, AIG, to provide statements. They did not receive requests from St Paul for statements.

Meanwhile, Mr Ganellin died - not as a result of the accident - and it was left to a friend of the family to try to resolve the situation and raise the issue of witness statements.

Mrs Ganellin was under the impression that AIG was about to settle the claim, when out of the blue St Paul sent the other driver a cheque for the damage suffered to his car.

There was no admission of liability, but as far as AIG was concerned that was the end of the matter. Their insured had been paid out by Mr Ganellin's insurer.

Mrs Ganellin was devastated and asked for an explanation. In a letter dated 29 September, St Paul said: 'Had we had this witness information earlier, we may have been able to negotiate a more favourable settlement with the AIG Group, however, this was not the case . . .'

We spoke to AIG. Despite the two witness statements supporting Mr Ganellin's case, a spokesman was adamant that the accident was not the Golf driver's fault and that Mr Ganellin was liable.

The AIG spokesman said: 'Our insured claimed against the Golf driver for his uninsured costs. His claim was paid immediately by the third party's insurance company on the basis of the facts they have available to them, indicating quite clearly where fault lay.

'We are sorry if our normal investigations into the cause of the accident led Mrs Ganellin to believe we would settle her husband's claim. We clearly stated in correspondence with Mr Ganellin that we had not accepted liability on our insured's behalf . . .'.

We asked St Paul to look again at its handling of the claim. Within 10 minutes, Beverley Shreeve, the deputy general manager of the company, had apologised and admitted that the claim had not been dealt with properly.

In a letter to Mrs Ganellin, she said that the payment to the other driver was made 'prior to receiving the witness statements which clearly show the other driver to be at fault. In our defence, I would merely add that there were conflicting and confusing versions presented to us, which resulted in our misunderstanding.' She added that St Paul's action had clearly prejudiced Mrs Ganellin's position, and the company feels duty bound to let Mrs Ganellin submit her claim for suitable reimbursement.

Mrs Ganellin was delighted. However, the war of words between the insurers as to who was responsible for the accident is likely to continue.

If you are involved in an accident and you and the other party both deny responsibility, everything depends on the evidence available. If you disagree with your insurance company's decision, and you think there is enough evidence to show that the other driver was at fault, ask for the case to be reviewed.

Paul Coppin, a solicitor with the legal firm Birkett, Westhorp and Long, said: 'Most insurance companies have quite an effective complaints procedure. Try that first. If you have no joy at all, then go to the Insurance Ombudsman.

'As a last resort you may be able to sue the insurance company, if you still believe that they have mishandled your case. But for most road traffic claims, it is not cost-effective.

'If your insurance company has not paid out to the other driver and therefore compromised your position, you can sue the other driver for your losses - if you believe he is to blame for the accident.'

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