How to reduce the recourse payments under OSAGO
In an accident, every driver who has a MTPL policy has the right to receive compensation from the insurance company. But in some cases, the insurance company may demand that the person who caused the accident recover the money that was paid to the victim (for example, if the driver who caused the accident was drunk or fled the scene of the accident).
The insurance company’s right to demand that the at-fault driver return the money is called recourse, and the recourse tool itself was invented to punish unscrupulous drivers.
In practice, insurance companies often exaggerate recourse claims and ask for a refund even for money they did not pay to the injured party. We explain how to find out if you have been cheated by an insurance company and how to reduce the amount of recourse if you have been cheated.
How Insurance Companies Cheat Drivers in Recourse
The classic scheme by which insurance companies cheat their customers looks like this. To make it clearer, let’s introduce several actors.
Alisher is a client of insurance company “Alfa”.
Boris is a client of insurance company “Beta” .
The accident was Alisher’s fault and he was drunk at the time of the accident.
After the accident, Boris went to his insurance company, Beta. He was paid an insurance settlement of 30,000 rubles. Boris did not agree with the amount of compensation and went to an independent expert, who confirmed that the damage to the car was estimated at 50,000 rubles.
Boris got the missing 20,000 rubles from “Beta” through the court.
After Beta paid Boris the first 30,000, she sent Alfa a demand for the money back. Since the accident was Alisher’s fault, Alfa returned the money.
When “Beta” paid Boris another 20 thousand, she sent information about the payment to “Alpha”. But according to the law, Alfa doesn’t have to pay Beta back the 20,000. Insurers have no right to underestimate payments to clients and if they do underestimate payments and the client can prove it, the insurance company has to pay the rest of the money from its own pocket.
And then comes the most interesting part.
“Alpha sends Alisher a demand to return the 50,000 that Beta paid to the victim. The demand is accompanied by all the receipts confirming that “Beta” returned exactly 50 thousand. Of course, the insurance is modestly silent about the fact that “Alfa” paid only 30 thousand to “Beta”.
Since Alisher was drunk at the accident and knew he could 100% fall under the recourse clause, he decided to pay 50 thou to Alfa.
Result: Alisher paid to “Alfa” 20 thousand more than he should have and didn’t even guess that he had been cheated. A satisfied Alfa credited the money to their accounts and continued to steal from unsuspecting clients.
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How insurance companies cheat their customers. A step-by-step scheme
This item is for those who still have questions after the previous section. Here we explain in detail how the accounting of insurance companies is organized and how they cheat their clients. If you already understand everything, go straight to the next part, “How to Protect Yourself?”
So, what happens after Alisher’s car crashes into Boris’s car?
Boris informs his insurance company about the accident. “Beta” estimates the damage to Boris’s car at 30 thousand rubles. It pays Boris this money.
Transactions between insurance companies are regulated by a direct settlement agreement (DCA). The DSC regulates the settlement procedure for all insurance companies dealing with CMTPL insurance. Under the DTP agreement, Beta electronically sends Alfa all the necessary documents about the accident and a payment order confirming that the injured party has been paid 30,000 rubles.
“Alfa” reimburses “Beta” 30 thousand.
Meanwhile, Boris does not agree with the amount of compensation and makes an independent expertise, confirming that the car was damaged for 50 thousand.
Through personal recourse or by court, Boris gets Beta to pay him back another 20,000. “Beta pays it back.
According to the law, insurance companies have no right to underpay their clients. If the insurance company wrongly calculates the amount of payment and the client can prove it, they pay the rest from their own funds
When Beta paid Boris another 20,000, it issues a zero claim to Alpha for that amount. A zero demand means that a cash transaction took place, but that Alpha itself had nothing to do with it: Boris received the 20 thousand from Beta.
The zero claim is made to avoid contradictions in accounting documents (“Alfa” paid 30 thousand to “Beta”, and “Beta” paid Boris 50 thousand for some reason). This is how the accountants of both insurance companies understand exactly how much the victim received.
“Alfa demands that Alisher pay her 50 thousand rubles. Alisher receives receipts confirming that Boris received 50 thousand from “Beta”.
Alisher, ignorant of the peculiarities of insurance companies, transfers 50 thousand to “Alfa”.
Alisher is sad, “Alfa” stole 20 thousand and rejoices – there is no justice in life.
How to protect yourself from insurance fraud in the recourse?
1. Check whether you are entitled to recourse.
An insurance company’s right of recourse arises if:
– You intentionally caused harm to the victim’s life or health.
– You were driving under the influence of alcohol or drugs.
– You had no right to drive the vehicle in which you were involved in the accident.
– You fled the scene of an accident.
– You were not on the MTPL policy for the vehicle in which you caused the accident.
– Your MTPL policy has expired.
– You repaired or liquidated the vehicle in which you were involved in the accident before 15 business days from the date of the accident expired.
– Your diagnostic card, which states whether the vehicle meets safety requirements, has expired.
– Your vehicle’s trailer was not entered into your MTPL policy.
Recourse payments are governed by Article 14 of the MTPL law.
If you do not fall into any of these categories, and the insurance company still demands that you pay for the damage, you are definitely being cheated.
2. Study your insurance company’s billing statements
Once your insurance company has transferred money to the victim’s insurance company, it is your insurance company’s responsibility to try to collect from you through pre-trial proceedings.
Along with the pretrial claim, the insurance company should send you documents: payment order, check, cash voucher. There’s only one document you’re interested in: the payment slip confirming the transfer of money from the insurance company Alpha to the insurance company Beta.
Compare whether the amount stated in the payment order coincides with the amount stated in the pretrial claim. If not, the insurance company is probably trying to cheat you.
Insurers don’t want to lose any easy money, so they’re likely to send you lots of documents. Among them, you are guaranteed to find documents confirming that the injured party’s insurance company has paid him money.
You should not be interested in these documents. You have nothing to do with the injured party’s insurance company. The only thing that matters is the amount of money your insurance company paid to the injured party’s insurance company.
You must reimburse only this amount – and not a ruble more.
Request a payment order from the insurance company.
Sometimes the insurance company won’t provide the client with any documents at all, except for the pre-trial demand.
This is illegal. If you receive a pre-trial demand, ask for a payment order from your insurance company to the injured party’s insurance company. In addition, you need data confirming that this is an accident with your participation: full name of the injured party, his or her CMTPL policy number, the name of his or her insurance company, the protocol of the accident or the Europrotocol.
If the insurance company refuses to provide these data, do not pay and wait for the court. In court, say that you were not given the opportunity to review the documents, that is, the pre-trial order was not observed. Therefore, the claim should be left without consideration.
Before the court, mail a letter to the insurance company asking for the documents and keep the mailing receipt. If you sent emails, make notarized screenshots. Also, a printout of the calls to the insurance company’s official number will come in handy.
4. Wait for the insurance company to sue itself
If the amount appearing on the payment order differs from the amount stated in the claims, don’t pay the insurance company and wait for it to sue.
But be prepared that the judge probably doesn’t know what principle insurance companies use to calculate recourse payments. Explain to the judge everything we explained in “How Insurance Companies Cheat Customers. A Step-by-Step Scheme.” Talk about the zero requirement, refer to the directive of the Bank of Russia.
Insist that your insurance company only paid the injured party that part of the money specified in the payment order, and by trying to get more, is engaged in fraud.
If you’re not sure you know how to be brilliant in court, contact us. Matters involving insurance companies are easily resolved by us.
The information in this article is current as of the date of publication on igumnov.group .
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Under the pressure of recourse. What to do if an insurance company demands money?
MTPL insurance, it’s not just mandatory and wasteful. No matter how many tons of bile are poured on auto liability insurance, it has one fat benefit – it compensates injured drivers and pedestrians in accidents. But it’s not all that simple for the at-fault party. He can easily become a “scapegoat” in this whole story, even if he accepts his guilt and goes to the execution of the accident without police officers.
One of the schemes for “scamming” drivers is a recourse claim. They say, you have violated the law – reimburse the costs of compensation to the injured! And the beauty is in the fact, that IC will use the recourse, even when the grounds for its application are “pulled by the ears”! What to do? Let’s arm ourselves with the law, let’s focus our attention and ruin the hopes of the insurer to show the recourse to the guilty according to the euro-protocol.
The right for the regress
Article 14 of the Federal Law No.40 dated 25.04.2002 “On compulsory third party liability insurance for vehicle owners” (“Federal Law “On MTPL insurance”, FZ No.40) gives an exhaustive explanation of the cases when an insurance company has the right for recourse. Of the abovementioned grounds we will highlight only those that give the right to insurance regress on euro-protocol (registration of the accident without police officers). Namely:
- Causing damage to the victim’s car, including for the purpose of obtaining insurance;
- Independently carrying out repairs or utilization of the car by the person guilty in a traffic accident before expiration of a 15-day term from the moment of the accident;
- failure to submit the car to the insurer for inspection at his request;
- provision of inaccurate information to the insurer when concluding an insurance contract electronically;
- expiry of the diagnostic card at the time of the collision, if the cause of the accident was a vehicle malfunction (effective from 08.06.2020).
Before 01.05.2019 the most common ground for recourse was violation of terms of sending a euro-protocol to the insurance company by the guilty driver, which should be done within 5 days. Starting from May 2019 violation of such requirement is not a basis for recourse, although the requirement to send a notice of the accident within 5 days has been retained. The cancellation of this basis does not apply to the accidents that occurred before 01.05.2019 – in these cases the right for recourse is preserved.
Insurers are very resourceful, they will find such grounds even in places where they have never been found. The insurance company will definitely send you a claim with a demand to reimburse the costs and threats to sue you otherwise. The driver’s task is not to panic. The correct legal analysis of the situation will help to build a worthy line of defense, and it is the only way to avoid recourse on the euro-protocol.
Without sufficient grounds: what should the driver do?
Practice of recourse disputes includes the lion’s share of cases when the claims for compensation in favor of the insurer are obviously unfounded. If you also received such “letter of happiness” – do not pay right away, even if the amount by your standards is insignificant. Step by step we and our lawyers will find the best way out of any situation.
Step 1. Is there a right of recourse?
Determine whether the insurance company is justified in making a claim for recourse on the MTPL Europrotocol. Grounds for the claim should be specified in the claim. For example, failure to notify about the accident in time, failure to submit the car for inspection at the request of the insurance company, independent repair of the vehicle before the expiration of 15 days and so on. If the essence of the claim is a lie, prepare the evidence of your rightness. For example, a postal receipt about sending documents to the insurer in time.
Step 2: Was there any payment?
The right of recourse arises for the insurer only if he has made a payment of insurance compensation and can confirm this. Referring to this, ask the insurance company for documents confirming such a transfer. If documentary evidence of this is not provided, you can legitimately question the transfer of the right of recourse to the insurer. And until he proves otherwise, you may not pay.
Step 3: Check damages
The amount of the recourse claim may reasonably raise doubts for the driver. And really, how do you know the amount was objective! If the correctness of the damage assessment is doubtful and seems overstated to you – send a review, disagreeing with the claim in terms of the amount of damage and demand an independent expert examination.
Step 4: Has the statute of limitations not expired?
The general 3-year limitation period applies to recourse claims. But unlike the general cases, its period starts from the moment of repayment of the principal obligation by the insurer (Part 3 Article 200 of the Civil Code). That is, only after he has transferred the money to the injured person’s insurer. If 3 years have passed since that date, but the insurance company has still not sued you – “dry your oars”, according to Article 199 of the Civil Code, this is grounds for refusing the insurer’s claim and cancelling recourse under the euro-protocol (Appeal determination of the Moscow City Court from 08.07.2015 on case 3323195/15).
If the case has gone to court
Once you refuse to pay voluntarily, the insurance company will not delay and will soon definitely sue you. Decisive action is the key to your success. In fact, the strategy of behavior will not differ from the steps in the pretrial settlement in the claim procedure. Once you receive a copy of the claim, you need to:
- Examine the claim and find its justification – what the IC argues for the need to recover damages by way of recourse.
- Determine whether such claim is justified. Did the insurer have legal grounds for recourse? Check the limitation period. If they have expired – declare in court about their application and the need to deny the claim.
- Before the first meeting draw up an objection to the claim in free form and send it to the court. Specify, that all requirements of the law from your side were executed – the notice was directed or personally transferred to SK in time, repair of the car was not carried out, there were no requests for inspection of the car. If the euro-protocol was not sent in time, cite valid reasons – illness of close relative, urgent business trip, loss of the copy of the notice, other reasons not depending on the driver.
- If you do not agree with the amount – send a petition for appointment of forensic examination of the amount of damages.
- If the decision is not in your favor, but you insist on your right – try to challenge the regress of the euro-protocol, both in appeal and in the cassation. If justice is not achieved independently, for the successful resolution of the case we recommend to involve professional lawyers.
Chances of Success
In recourse disputes, the outcome of the case always depends on the specific circumstances and the position of the court. Most often the basis for recourse serves pp. g, para. 1, Article 14 of the Federal Law “On Auto Insurance”, i.e. failure to notify the insurer of a road traffic accident in time. Under such circumstances, the court practice on recourse for a MTPL Europrotocol is unambiguous – the courts take the side of the insurers. As examples:
justice of the peace of the court district No. 27 of the urban district “city of Yuzhno-Sakhalinsk” in case No. 2- 9/2016 dated 12.01.2016; justice of the peace of the court district No. 1 of the Kogalym court district of the Khanty-Mansi Autonomous District-Ugra in case No. 2-434-1701/2018 dated 29.03.2018; justice of the peace of the court district No. 99 of Saint Petersburg Zaburko E.N. in case No. *****/2018-99.
However, there are examples of positive decisions for drivers. For example, the Butyrsky district court in its appellate determination of 23.08.2017 in case No. 11-0156/2017 recognized that the failure to send a notice may not be a basis for recourse if both drivers who made a euro-protocol are insured with the same insurer.
For the other grounds for recourse everything is not so unambiguous, and the court practice is insignificant. And therefore, everything even more depends on the desire and persistence of a particular driver.
Here is an example: it would seem that failure of a car accident initiator to submit the claim for inspection makes recourse a priori legal? But no, only if the requirements for provision of the vehicle were sent to the driver in writing during the first 15 days, and the insurer can prove it (decision of the justice of the peace of the court district № 20 Efremovskogo judicial district of the Tula region in case № 2-178/17).
Successful outcome in disputes with insurers can never be guaranteed. There is a diversity of court practice only in cases where the basis for recourse is paragraphs. g) of paragraph 1 of Art. 14 of the Federal Law “On Motor Third Party Liability Insurance” . But since it has been abolished, the relevance of the question is gradually lost. The remaining grounds appear many times less frequently, and therefore the success of the lawsuit will depend on the specific circumstances of the case and the persistence of the insured. And so, to summarize, we can only wish you luck, you will need it!