Car Accident Debt Collection

Lta621 on 07/06/2021 - 11:00
Last edited 07/06/2021 - 12:43

Hi,

To start off, I had an accident and I was at fault — so please go easy on me.

  • I had a small accident a year ago, I was at fault.
  • Started a claim, but the other party reached out and wanted to settle mututally.
  • Few days later they changed their mind and decided to involve insurer but I had withdrawn my claim by then so I refused to relodge.
  • They never called after that and the accident was really minor (one scratch on both our cars) so I assumed it was all good.
  • Few months later I started receiving calls from debt collection agencies. They're asking me to lodge a fresh claim.

Old excess is 500 more than what they're chasing.
New excess is 700 less than what they're chasing.

So with the current excess not only I'd be debt free but also I'd get my car repaired as well so its the ideal solution. However, if it comes to paying the old excess I'll most probably have to negotiate with the debt collectors.

Q: Do I really have to lodge a claim and provide the claim number, is that how it works?
Q: Should I / Can I start a new claim for the same accident? New claim would most likely mean current (low) excess.
Q: My excess at the time was really high, since then my policy has renewed (same insurer everything else same) and excess is greatly reduced. I wonder would I pay the excess applicable under current policy or what it was at the time of accident / first claim logement?

Would be great to hear ideally from someone who has relodged a withdrawn claim after their policy renewed.

Thanks!

Resolved: Excess applies based on the policy at the date of accident ie. old excess. Source: My insurer.

Automotive

Comments

  • MrHyde on 07/06/2021 - 11:03
    +4

    • You do not have to lodge a claim. If you don't lodge a claim, you need to pay what the debt collection agency is asking. You can negotiate with them.

    • If you do lodge a claim; I would expect it would under the terms and conditions at the time of the accident; so would expect it to be at the higher excess level.

    • garetz on 07/06/2021 - 11:20

      Actually not true, you do not have to pay a cent to a debt collection agency, the onus is on them to prove the party is at fault and if the damage is just a scratch then it can be argued there was no damage caused that requires settlement. Which would require court proceedings.

      Just like a debt collection agency needs to prove a debt has been recorded by providing an invoice to that effect, also so does a collection agency need to prove the person they are trying to recover monies from is at fault.

      if anything they should be going through their own insurance company, not a debt collector. If the insurance company was calling the op that would be a different matter, however since its a debt collection company I would expect the other party not at fault commissioned their services. In which case it becomes he said she said until a court settles the matter. The amount of recoverable monies can also be in question.

      • ta621 on 07/06/2021 - 11:23

        Fault can be proved actually with the dashcam footage so I don't think it applies in my case. I accept that I was at fault.

        The damage was indeed just a scratch but since both our cars were new and its a condition that new cars cannot be 'repaired' (no paint jobs) they just replace the new parts therefore the high cost of repair. :(

        • garetz on 07/06/2021 - 11:25

          It doesnt matter if both cars are new, a scratch does not constitute damage to a significant event that requires repair, you can probably just get it buffed out. The cost of repair needs to be reasonable and consistent with the actual damage caused.

          Replacing a part because of a scratch is not reasonable.

          • apsilon on 07/06/2021 - 11:53
            +2

            @garetz: Rubbish. the other party is entitled to have their vehicle restored to the condition it was in. A scratch is a scratch. If it's to bare metal it'll lead to rust. Either way it results in loss of resale value. I agree it may be possible to just buff light marks (which still has a cost as most owners aren't going to DIY) but even that can be difficult as many people are choosing to have ceramic coatings these days. This usually makes a repair more costly and difficult.

            You better believe if you cause damage I am going to make a claim no matter how minor and I've ensured I have choice of repairer and won't be going to the cheapest in town, I'll be going to someone I know will do the job right.

  • bobbified on 07/06/2021 - 11:13

    How much are they chasing? Obviously you haven't cared about the damage on your own vehicle. Is the total less than your claim excess plus a few years worth of insurance premium hikes? If the amount they're chasing is way more, then lodge a claim - that's why you have insurance. If you're willing to settle without lodging a claim, tell them you can only afford about 2/3 of whatever amount they're chasing and they'll probably be happy to accept that amount as final settlement.

    • ta621 on 07/06/2021 - 11:17

      Old excess is 500 more than what they're chasing.
      New excess is 700 less than what they're chasing.

      So two questions here basically:
      - Should I / Can I start a new claim for the same accident? New claim would most likely mean current (low) excess.
      - Would the new or current excess apply if I relodge the same claim?

      So with the current excess not only I'd be debt free but also I'd get my car repaired so its the ideal solution. Would be great to hear ideally from someone who has relodge a withdrawn claim after a policy change.

      But yes, if it comes to paying the old excess I'll most probably have to negotiate with the debt collectors.

      • bobbified on 07/06/2021 - 11:23
        +2

        The excess applicable for the policy at the time of the incident is what will be payable.

        If the excess is more than what they're chasing (as it appears to be based on what you've written), there's no point in lodging a claim. They'll probably tell you the same thing when you ring up to make a claim. You can settle the claim with the other party's insurer with cash. And that amount they're chasing is negotiable. Half the amount they're chasing is a good amount to start negotiating on and the final payment amount of two-thirds is decent.

        • ta621 on 07/06/2021 - 11:25

          Thanks, but I wanted an authoritative reference because I can't speak to the insurer until I'm certain.
          Is that just your opinion or did you read that somewhere or were in a similar situation?

          • bobbified on 07/06/2021 - 11:27
            +8

            @ta621:

            Is that just your opinion or did you read that somewhere or were in a similar situation?

            None of the above - I was once just a lowly motor vehicle claims assessor. 😋

            • ta621 on 07/06/2021 - 12:37

              @bobbified: And you're absolutely right. Just confirmed with my insurer and and old excess it is.

      • tomsco on 07/06/2021 - 11:23
        +1

        New claim would most likely mean current (low) excess.

        I do not believe this would be correct. Any claim would be based on the policy at the time of the accident (ie. high excess)>

        • ta621 on 07/06/2021 - 11:28

          Sure, I'm happy to accept that and negotiate but I just need to be certain. How could I confirm this? Thanks!

          • tomsco on 07/06/2021 - 11:30
            +1

            @ta621: It would be the same outcome if you did not have insurance at time of the accident but you do now - they would not cover you. Why would an insurance company policy cover you for any pre-existing issues?

            If it worked like you hoped, everyone would just sign up to low premium, high excess plans and just switch over just after they have an accident.

            • ta621 on 07/06/2021 - 11:48
              +1

              @tomsco: Make sense, thanks. I thought so but just wanted to double check. So I guess the better option here is to negotiate.

      • MS Paint on 07/06/2021 - 11:29
        +2

        Old excess is 500 more than what they're chasing.
        New excess is 700 less than what they're chasing.

        So about $1500??

  • Hellfire on 07/06/2021 - 11:26

    It will be at the old excess because that was the policy that was active at the time of the accident.

    If it was a minor accident you can get a copy of the assessment and repairs done. This can be disputed if it doesn't fit the damage done during the accident or is excessive.

    You also don't need to deal with debt collectors unless they have a court order. If you decide to negotiate with them anyway then I'd recommend you at least verify with the insurance company that they have passed the debt onto the collection agency.

    • ta621 on 07/06/2021 - 11:28

      They (ARL Collect) have sent letters saying that if we don't respond and act fast they'd put the debt on my credit profile which would affect us financially, also mentions taking us to court.

      • Quantumcat on 07/06/2021 - 11:36
        +5

        They can't put it on your file as they haven't proved you owe the money. They're just trying to make you feel a sense of urgency and pressure.

        • ta621 on 07/06/2021 - 11:45

          I've just asked them to send me the invoices of the repair which they said they'd send.

          The dashcam footage from the other driver's car shows I was at fault.
          He got it his car repaired and has invoices

          So I guess thats doed prove I owe the money, right?

          • Quantumcat on 07/06/2021 - 11:56
            -1

            @ta621: Not if there was a cheaper way it could have been fixed. The other guy could also have scrapped his whole car and got a new one but that doesn't mean you are responsible for paying for that.

            You could even argue that since he didn't give you quotes or give you the opportunity to pay for a cheaper repair you shouldn't be responsible for the repair he chose to get. I'm not a lawyer though.

            • ta621 on 07/06/2021 - 11:58

              @Quantumcat: I see. That was the only thing holding ma back from paying the excess at the time because it just didn't make sense paying 5x. I offered to get it repaired but for some reason he just wanted to go with insurance.

              Anyhow, how do I go about disputing this? ACCC?

              Thanks!

              • Quantumcat on 07/06/2021 - 12:51

                @ta621: I have no idea sorry.

                You may need a lawyer so you say the right things and for when it goes to court. But that would probably cost you more than just paying it.

                Or maybe you can talk them down until they can't be bothered to pursue you and the other guys insurance gives up (but then they might take you to court and by not having a lawyer earlier you might have said something wrong in the lead up and made things worse)

                Or maybe you should get your insurance involved even though the excess is higher than what they're asking, so at least you don't have to give it headspace - but then your future premiums will increase

                I really have no idea what the right thing to do is. Or if there is another better option than what I've thought of

  • Ocker on 07/06/2021 - 11:32
    +1

    Did the other party ever formally issue you with an account to pay?
    If not, then what proof does the debt collector have that a debt actually exists?

    • ta621 on 07/06/2021 - 11:38

      Probably. They sent letters through law firms who demanded way more. I responded to all of them saying why its excessive and they stopped chasing.
      Looks like the other driver finally went with their insurer and got his car repaired. Insurer called a couple of times and I asked them for the invoice as well but they never provided, a few months later they simply passed it on the debt collection agency.

  • Ocker on 07/06/2021 - 11:44
    +2

    The other party engaged a law firm to chase up the cost of just a scratch? Something doesn't seem to add up here

    • ta621 on 07/06/2021 - 11:47

      Sure did, cause these "law firms" are just a google search away. They just lure not at fault drivers and try to extort money from the at fault driver by over estimate the damages. All they have to do is send letters and see if the at fault driver pays or provides insurer details. If they just respond sensibly and want to discuss details, they just give up and find someone else.

      TLDR: not actual "law firms".

    • bobbified on 07/06/2021 - 12:23

      Insurers usually already have their "regular" law firms and claims often go across to them as a matter of process in "batches".

  • pegaxs on 07/06/2021 - 11:51

    but I had withdrawn my claim by then so I refused to relodge.

    Yeah, you see, that's a you problem.

    The thing is, it was probably a lot less to have the work done, but now that you "refused" to re-lodge your claim, the debt collectors will have put their mark-up on top of the price.

    And when claiming, you will have to pay the excess that was due on the policy at the time it was active, not the policy you have now. If the amount owed is only $500 more than your excess… I would just pay out of pocket, because over the next 5 or so years, your policy is going to cost you more than the $500 extra they want because you will now be listed as an "at fault" client.

    • ta621 on 07/06/2021 - 11:52

      I was happy to get it repaired for them, but didn't make sense to pay 5x for a scratch by going the insurance route, but the other driver just wouldn't listen to reason. Ultimately it was my fault and their choice, I should've accepted that, agreed.

      The debt collectors are asking for the same amount, haven't added any markup FYI.

      • photonbuddy on 10/06/2021 - 15:52

        The other driver sounds like a smart driver.

        They paid their insurance premium, so why would they bother taking risks dealing with someone who would likely be trying to make them jump through all types of hoops in order to minimize what had to be paid?

  • pharkurnell on 07/06/2021 - 11:53
    +3

    Member Since
    1 hour 1 min ago

    Welcome to OzLegal.

    • MS Paint on 07/06/2021 - 12:41
      +2

      Underwritten by OzBingle

      • DashCam AKA Rolts on 07/06/2021 - 12:51

        OP missed the mandated requirement for the MS Paint diagram.

        • SF3 on 07/06/2021 - 17:52

          Seems to be standard ritual for newbies.

  • cnmarine on 07/06/2021 - 12:43

    You've ignored the insurance company a couple of times, then their law firm a couple of times. Just out of interest, what made you want to sort it out with the debt collection agency now?

    • ta621 on 07/06/2021 - 12:46

      Law firms were over quoting the damage. They just wanted to make a quick buck.
      The other party's insurance company did not send me the invoices for the repairs. When asked, they just stopped calling and passed the debt to debt collection agency.

      Want to sort it out now cause I'm tired of the calls and afraid it might affect my credit history. I always knew I would have to eventually sort it out, but delayed until I had to settle and for the least amount possible. So the timing is about right.

      • picklewizard on 07/06/2021 - 16:26

        If you didn't apply for credit, a debt like this is not supposed to impact your credit history, because, well, it's not a line of credit.

        That said, debt collectors are shady and might do it anyway. You should be able to get this cleared, however.

        IANAL

        • Tleyx on 07/06/2021 - 21:35

          It can't affect credit unless there is a judgement

          • picklewizard on 08/06/2021 - 11:07

            @Tleyx: Sorry, that absolutely not true - you can get a default against your name for a debt as low as $20, the credit provider will simply report you to the credit reporting body. No "judgement" in involved.

            Source: Worked for credit management arm of major telco.

            • Tleyx on 08/06/2021 - 11:55

              @picklewizard: That's a contract at a telco. It's different to car accident.

              I was only referring to the OPS situation

  • Seraphin7 on 07/06/2021 - 19:16
    +1

    Few months later I started receiving calls from debt collection agencies. They're asking me to lodge a fresh claim.

    Debt collection agencies don't want you to "lodge a claim" … they want you to pay up, they don't care where it comes from. Something not right there.

    • Tleyx on 07/06/2021 - 21:36

      It's probably fake ask them to prove that you hit the person claiming and that they actually own the debt

      Anyone can call anyone and claim an accident years ago. Nearly everyone has an old collision that didn't get settled

  • Overclocked91 on 08/06/2021 - 06:59

    You were at fault, regardless if it was a scratch or not you should be liable for damages. You either send the repair quote to your insurance, pay your excess, or cop it sweet and pay theirs. If it was the other way around you would have been chasing damages.

    • tomsco on 08/06/2021 - 10:05

      To start off, I had an accident and I was at fault

  • OzHunterNSW on 08/06/2021 - 10:35

    Why aren't you "reaching out" to your insurer?
    Why haven't you resolved the issue with the other Party?
    I see it is you that is trying to dodge your responsibilities.
    If you have to pay more, so be it.
    Do the right thing…. you caused the accident…. do the right thing or stay off the road

    • Tleyx on 08/06/2021 - 11:56

      Insurer won't do anything if it's less than excess

      • badg3rz on 08/06/2021 - 21:15

        Why wouldn't they?

        They are just taking money and fixing up something for less and pocketing the rest, then maybe OPs premium goes up the following year. If OPs changed insurance OP would have to put down had a claim and were at fault.

        • Tleyx on 09/06/2021 - 09:11

          Just my experience that they don't. It's in the pds regularly, check yours

          I expect the costs of managing it are greater than the money they make. Their staff don't work for free

  • badg3rz on 08/06/2021 - 11:31

    Ring the NRMA, RACV, RACQ, they have "free" legal advice on what you can do. mic drop

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