Key Takeaways
- Both insurers and accident management companies can help with the aftermath of a car accident, including vehicle recovery, repairs and providing replacement vehicles, where costs are recoverable.
- Insurers generally ask for an "excess" fee, even where the other driver was at fault - accident management companies typically don’t request this fee, subject to eligibility.
- Your no-claims discount is less likely to be affected if you do not claim on your own policy, but you may still need to report the accident and future premiums can still be affected.
Understanding the two routes: accident management company vs insurance
The traditional method of arranging practical affairs and recovering financial costs following a car accident is to contact your insurance company and make a claim. This covers matters such as:
- vehicle recovery (e.g. towing)
- car repairs
- provision of a courtesy car (which can be used while awaiting repairs)
There is an alternative route, open to drivers who have been in an accident which was not their fault. Instead of making a claim against their insurance policy, they can ask an accident management company to explain their options and, where appropriate and eligible, arrange support through working partners such as a recovery company, repairer or hire company. Where liability is accepted or established, the hire company or repairer seeks the charges from the at-fault insurer.
Drivers who are either wholly or partially at fault for an accident need to make a claim via their insurer. But those who are not at fault can direct their claim to an insurance claims management company. This may mean avoiding an upfront excess charge, subject to eligibility, although it does not guarantee lower insurance premiums.
What both routes can usually help with
Whether you make a claim with your insurer or use an accident management provider, both routes may help with the main practical issues after an accident, although the route, eligibility and cost position can differ. This includes vehicle recovery and repairs (or payment of vehicle valuation if it has been written off), through to delivery of a replacement vehicle while you are waiting for the resolution of repairs, assuming liability is accepted.
Key differences
Type of claim
Lots of different car insurance claims are made against insurance policies, from accidents through to thefts and fires. Car insurance tends to cover a wide variety of claims, whereas accident management services focus solely on vehicle accidents.
No-fault accidents
Car insurance claims management companies are designed to specifically help drivers who were in an accident which was not their fault. At-fault drivers have to rely on their insurance policies, which may cover their costs (in the case of comprehensive cover) or might only cover the costs of the other party (in the case of third party insurance).
Excess
Many insurance company policies include an "excess" fee prior to car accident claims being progressed, which can cost hundreds of pounds [1]. An accident management company will generally not charge this fee, subject to eligibility, as they seek to recover expenses from the insurance company of the at-fault party.
Repairs
Getting on the road again as quickly as possible will be at the forefront of the minds of most drivers who are involved in an accident. However, it's even more important to ensure that any repairs are completed to the highest standard, for the safety of both drivers and passengers. It's worth asking whether the BS 10125 BSI Kitemark for Vehicle Damage Repair [2] for vehicle damage repair, awarded by the British Standards Institution, is in place for the garage or body shop which is responsible for ensuring your car is roadworthy again. Both insurers and accident management companies are able to arrange and cover the costs of repairs undertaken, subject to eligibility, ideally with a local garage. But the main difference is that an excess fee will be required if you claim for repairs via your insurance policy, whereas no such fee is generally payable to an accident management company, subject to eligibility.
Replacement vehicles
If your car is no longer roadworthy following a collision, and needs to be booked into a bodyshop for repairs, it's important to be able to have access to a replacement vehicle while you are waiting for it to be fixed. Both insurance companies and accident management companies are normally able to provide a courtesy car for this duration, subject to eligibility, although the type of car which is offered can vary significantly. So it's a good idea to ask what kind of courtesy car will be provided when deciding between making a car accident claim via your insurers or going to an accident claims management company.
Communication and claims handling
The Financial Ombudsman Service [3] has reported a rise in motor insurance complaints, including issues linked to claims handling and delays. Because insurance companies often have a wide variety of services and need to deal with a vast array of claims, it can sometimes take time for consumers to reach the correct department and have their claim processed. Accident management companies, on the other hand, specialise in the claims process specifically related to accidents, and this can help to make the experience more streamlined.
Costs and misconceptions
Reasonable accident-related costs may be recoverable from the at-fault driver’s insurer, where liability is accepted or established and the costs can be evidenced. This is the case for both claims that are made via your insurer or through an accident management company. However, your insurer will levy an excess fee at the start of a car accident claim, which is only repaid once costs have been successfully recovered from the other side, where liability is accepted. Accident management companies typically don't charge an excess upfront, subject to eligibility.
Which option may be suitable in different situations
If you are involved in an accident which was not your fault, you can choose between making a claim with your insurer or avoiding paying the excess (subject to eligibility) and using an accident management company instead. However, if the accident is your fault, you need to make any claim via your insurance company.
What to check before choosing either route
Before deciding between your insurer and an accident management company, check:
- whether the accident was clearly not your fault;
- whether you have evidence of what happened;
- what your policy says about reporting the accident;
- whether an excess is payable;
- what replacement vehicle, if any, may be available;
- who will arrange repairs and whether the repairer meets recognised standards;
- what costs you may be responsible for if liability is disputed.
FAQs
Will my insurance premium increase if I make a car insurance claim through an accident management company?
If you make a car insurance claim via your insurance company, even if the accident was not your fault, your premium may increase, depending on the insurer, your claims history, whether liability is settled, your no-claims discount protection and the policy terms. Using an accident management company may help you avoid paying your policy excess upfront, subject to eligibility. It may also reduce the chance of affecting your no-claims discount, although non-fault accidents can still influence future premiums and must usually be disclosed.
Do I need to pay anything upfront?
Insurance companies will usually request an up-front "excess" payment to start a car insurance claim, which can cost hundreds of pounds. Accident management companies generally do not charge this excess fee, subject to eligibility.
Will I save money using an accident management company?
In the short term, you may avoid having to pay the excess fee by using an accident management company, subject to eligibility (although this is normally eventually refunded by insurance companies if you are not at fault). Longer term, using an accident management company may help reduce the risk of claiming directly on your own policy, but it does not guarantee lower premiums. Non-fault accidents can still affect future pricing and may still need to be disclosed.
Can I get a like-for-like replacement vehicle?
Accident management companies may be able to arrange a like-for-like replacement vehicle, subject to eligibility, need, availability and recoverability. Insurers may offer a standard courtesy car depending on the policy terms.
Do I still need to contact my insurance company if I decide to use an accident management company?
Yes. Most policies require you to tell your insurer about an accident, even if you are not making a claim. The deadline varies, so check your policy wording as soon as possible.
Closing
If the accident was not your fault, it is worth comparing both routes before you decide how to proceed. Your insurer can handle the claim under your policy, but an accident management company may be able to arrange recovery, repairs and a replacement vehicle without you paying your policy excess upfront, subject to eligibility.
The safest next step is to report the accident, keep evidence of what happened, check your policy terms, and ask clearly what costs, vehicle options and responsibilities apply before you commit to either route.
Sources
- which can cost hundreds of pounds - https://www.theguardian.com/money/2024/apr/08/insurers-accused-of-using-excessive-excesses-to-disguise-car-cover-costs
- BS 10125 BSI Kitemark for Vehicle Damage Repair - https://www.bsigroup.com/en-GB/products-and-services/assessment-and-certification/product-testing-certification/deliver-safe-and-compliant-vehicle-repairs-to-bs-10125/
- Financial Ombudsman Service - https://www.financial-ombudsman.org.uk/who-we-are/data-insight/news/motor-and-building-insurance-complaints-hit-five-year-high
