Hypotheticals by Manny Wood Published in the Coffs Coast Advocate on 18 May 2019.
Olivia purchases a second-hand vehicle for $5,000.
Olivia makes enquiries with a number of insurers in relation to obtaining comprehensive insurance but considers that the premiums are too expensive given the value of the vehicle.
Olivia is aware that she obtained third-party personal injury insurance as a condition of the registration of the vehicle and believes that this is sufficient.
Unfortunately, Olivia is driving home one evening and fails to see a late model Mercedes-Benz in front of her and collides with the rear of the vehicle.
A loss assessor declares that the Mercedes-Benz is a total write-off and assesses the value of the vehicle at $87,000.
The owner’s insurer makes a claim against Olivia.
Olivia seeks legal advice. To her surprise, she is informed that the green slip insurance does not protect her in this case and that she is liable for the losses claimed.
She is advised in relation to potential bankruptcy and the associated ramifications in terms of her ability to obtain credit in the future.
Olivia is advised as to the potential to pay the claim in instalments, but this is not a viable option given the amount claimed.
The solicitor commences negotiations with the insurance company, on the basis that Olivia has no assets and that if she were to go bankrupt, the insurer would receive nothing.
The insurer ultimately accepts a much lower amount in settlement of the claim and Olivia obtains a small, manageable loan from a family member.
If Olivia had accumulated any assets prior to the accident, such as savings for the deposit on a home, these funds would have been lost.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
