Best Practice

1.1

RULE

Claim means a motor third party liability claim.

1.2

RULE

Customer means a person who obtains motor liability insurance from an insurer.

1.3

RULE

Insurer means a motor vehicle liability insurer.

2.1

RULE

This handbook applies to all claims arising from accidents that occur after 1 January 2008. This handbook can also be of guidance for claims arising from accidents that occurred prior to 1st January 2008, to the extent that its contents reflect requirements already established by law or market agreement.

2.2

RULE

This handbook derives its authority from the underlying legislation or market agreement which it seeks to interpret and define in simpler language. However, in the last analysis, it is that legislation or market agreement which has legal force and not this handbook.

2.3

RULE

This handbook applies when an insurer deals with a third party who claims damages against a customer (claimant).

2.4

RULE

This handbook does not specifically regulate an insurer who deals with a claim by its own customer for own damage.   Third party liability claims are governed by statutory requirements, which are not applicable to own damage claims in their entirety. Apart from these statutory requirements, an insurer should not deal with such claims in any less favourable way.

3.1

RULE

The purpose of this handbook is to ensure that:

(a)  claims are handled fairly;

(b)  claims are settled promptly; and

(c)  third parties and customers are aware of their rights and obligations in respect of claims.

4.1

RULE

Every insurer must, when issuing a new Policy and at claim stage or upon request, provide his customer with a blank Statement of Facts form.

4.2

RULE

Every driver must carry in his vehicle a blank Statement of Facts form.

4.3

RULE

Every driver who is involved in a front to rear collision must remove his vehicle from the spot of impact and park by the side of the road.

4.4

RULE

Every driver who is so involved in a front to rear collision must then approach and cooperate with the other driver in order to complete the Statement of Facts form.

4.5

RULE

The Statement of Facts form is self carbonised, and only one form is to be completed for a collision involving two vehicles.

4.6

RULE

One driver is to complete the yellow part and the other driver is to complete the green part of the form.

4.7

RULE

By filling the form, and exchanging copies, each driver who is involved in a front to rear collision will have enough information regarding the identity of the other driver, his insurance and the circumstances in which the accident occurred.

4.8

RULE

A driver who does not cooperate and exchange this information will be breaking the law. In reporting an accident, it is illegal to give untruthful information.

4.9

RULE

The completed form is to be delivered by each of the drivers to his own respective insurer within two working days from the date of the accident.

5.

5.1

RULE

A driver who is involved in a collision which is not front to rear, and does not involve injuries or damage to public property, must call a warden and report to him the circumstances of the accident. Wardens are to be called on 21320202. He must not move his vehicle from the spot of impact before being so instructed by the Warden.

5.2

RULE

A driver who is involved in a collision which involves injuries or damage to public property must call the Police and report to them the circumstances of the accident. The Police are to be called on 21224001. He must not move his vehicles from the collision before being so instructed by the Police.

5.3

RULE

After the wardens or the police have completed their record of the accident, the drivers are to remove their vehicles from the collision impact.

5.4

RULE

In reporting an accident, it is illegal to give untruthful information.

RULE

6.1

RULE

A customer has a duty to give prompt notice with full particulars to the insurer in respect of an accident that may result in a claim for damages (See also rule 4.9).

6.2

RULE

A driver, who is not himself the owner of a vehicle which is involved in an accident, has a duty to give prompt notice with full particulars of such an accident to:

(a) the owner, and

(b) the insurer covering such vehicle.

6.3

RULE

Generally a prompt notice to the insurer should be in writing and delivered within two weeks of the accident.

RULE

7.1

RULE

When an insurer is informed that a third party wishes to claim in relation to a motor vehicle which is involved in an accident and which may be covered under a motor liability policy issued by such insurer, it must give the third party reasonable guidance as to the proper procedure for making a claim.

7.2

RULE

An insurer who becomes aware of an accident that may result in a claim must handle such an event as a claim made by his customer notwithstanding that such customer has failed to give notice of such claim.

8.1

RULE

An insurer must carry out claims handling fairly and promptly.

9.1

RULE

An insurer must not reject or refuse to handle a claim made by a third party:

(a) unreasonably;

(b) on the basis of the failure of its customer to pay the excess.

(c) on the basis of any ineffectual policy restriction.

(d) in the event that it is an insurer concerned.

10.1

RULE

An insurer is entitled to reject a claim if the motor accident happens:

(a) after the insurance policy expires; or

(b) in certain specified cases involving a transfer of interest in the vehicle which the insurance purports to cover; or

(c) after the insurance policy is annulled by a court           judgment

10.2

RULE

An insurer is also entitled to reject a claim if the motor accident happens:

(a) after the policy had been cancelled; and

(b) after the certificate of insurance has been collected by the insurer from his customer

11.1

RULE

The purpose of rule 9.1(b) is to prevent an insurer from rejecting or refusing to handle a claim on the basis of the failure of its customer to pay the excess. However an insurer is entitled to charge the excess to its customer.

12.1

RULE

This rule describes those policy restrictions that are ineffectual in relation to a third party.

12.2

RULE

A policy restriction is ineffectual if it refers to any one of the following matters:

(a) the condition of the driver

(b) the age of the driver

(c) the identity of the persons authorized to drive

(d) the condition of the vehicle

(e) the colour of the vehicle

(f) the horse power of the vehicle

(g) the value of the vehicle

(h) the number of passengers

(i) the weight or type of goods that the vehicle carries

(j) the times during which the vehicle may be used

(k) the area within which the vehicle may be used

(l) a requirement as to the carrying on the vehicle of
any particular apparatus

(m) a requirement as to the carrying on the vehicle of any particular  means of identification

(n) a requirement that the driver should be licensed

(o) a requirement that the vehicle should have passed
a technical or safety test.

12.3

RULE

A policy restriction is also ineffectual if it restricts passenger liability.

12.4

RULE

However an insurer is entitled to raise any ineffectual policy restriction in respect of any benefit that is claimed by its customer.

12.5

RULE

Moreover a motor vehicle liability insurer is entitled to recover from the customer any damages, which it may have paid a third party, notwithstanding the existence of any such policy restriction. The recovery of any such damages are dependent on certain legal requirements.

13.1

RULE

This rule describes when an insurer is an insurer concerned in relation to a third party.

13.2

RULE

Generally an insurer is an insurer concerned notwithstanding that –

(a) the customer had obtained insurance cover after the accident from which a claim arose and the insurance is backdated

(b) insurance was obtained by fraud

(c) insurance was obtained by misrepresentation

(d) insurance was obtained by non-disclosure of a fact material to the risk or by mistake

(e) there is a breach of a warranty, term or condition

(f) the driver was not authorized to take the vehicle

(g) the vehicle was being used at the time of the accident for a purpose which was not authorized by the policy

(h) the vehicle was being driven at the time of the accident by a person who was not authorized by policy

(i) the driver did not hold a driving licence

13.3

RULE

Notwithstanding rule 13.2 (h) an insurer will be entitled to refuse a claim when the third party being a passenger in the accidented vehicle knew that it was uninsured.

14.1

RULE

An insurer must respond promptly to a notification by a third party or customer of a claim.

14.2

RULE

Notification of a claim is a demand by a third party or a customer to pay damages occasioned by a motor vehicle that may be covered under a motor policy covered by the insurer.

14.3

RULE

Such a demand should be given to the insurer in writing through the submission of a duly completed claim form.

14.4

RULE

An enquiry that precedes such a demand, for example, as to whether a particular loss is covered, and therefore whether a claim could be made is not notification of a claim.

14.5

RULE

Generally a prompt response would be one within five business days of the making a claim.

15.1

RULE

An insurer must keep the claimant reasonably informed about the progress of his claim.

15.2

RULE

A third party claimant has a duty to respond without undue delay to any reasonable request by the insurer for information, and not to resort to litigation if he has failed to do so.

16.1

RULE

In determining liability it is reasonable for an insurer to apply the rules established in the Drivers’ Fault Chart.

17.1

RULE

Loss of use means the financial loss which a person actually incurs as a result of being deprived of the use of his/her own vehicle. The Insurer which accepts liability must pay the third party such loss of use.

17.2

RULE

It is not reasonable for a third party to claim such loss of use when the accidented vehicle is still in a roadworthy condition, except for the days when it is being repaired and on condition that the claimant actually incurs a financial loss as a result of being deprived of it.

17.3

RULE

Subject to Article 17.1, it is reasonable for a third party to claim loss of use throughout the period of repairs approved by the insurer’s surveyor, including any intervening weekends.

17.4

RULE

It is not reasonable for a third party to claim loss of use, for any time following the insurer’s notification to him, that the accidented vehicle is beyond economical repair. It is not reasonable for a third party to claim loss of use, for any repair delays occasioned because of the unavailability of a particular repairer or spare parts.

18.1

RULE

An insurer who accepts liability and elects to pay for the repair of an accidented vehicle, should recommend that the repair is carried out by National Standards Authority certified repairers in accordance with the national standard, as evidenced in the Motor Vehicle Repairs – Repairers’ Management System – Requirements (DMS 1400).

18.2

RULE

In the replacement of parts, it is reasonable for a third party to request that a vehicle which is less than 5 years old and which is well maintained should be repaired using original equipment manufactured (OEM) parts.

18.3

RULE

For older vehicles it is reasonable for the repairs to make use of non-OEM parts or recycled second hand OEM parts.

19.1

RULE

This rule describes the respective duties of the parties when an insurer accepts liability, but declares that the accidented vehicle is beyond economical repair. (See also rule 17.4).

19.2

RULE

If the owner chooses to retain the said vehicle, the insurer must pay to the owner the pre-accident market value of the said vehicle, less the vehicle’s wreck value. In any such case it is reasonable for the insurer to require, prior to making any such payment, that the owner should deliver to the insurer:

a) a copy of the log book;

b) a receipt in full and final settlement.

19.3

RULE

If the owner surrenders the vehicle, the insurer must pay to the owner the pre-accident market value of the said vehicle. In any such case it is reasonable for the insurer to require, prior to making any such payment, that the owner should deliver to the insurer:

a) the log book, with a transference note duly signed;

b) a certificate from ADT (commonly known as a garage or scrap note) showing that the vehicle is laid up, its registration numbers returned to ADT and all liabilities thereon fully discharged; and

c) a receipt in full and final settlement.

19.4

RULE

In all such cases, it is reasonable for the insurer to determine the pre-accident market value of the accidented vehicle by reference to the Vehicle Value Guide.

20.1

RULE

If the insurer is of the opinion that liability is to be admitted, whether in full or in part, then it must give notice to its customer of its intention to pay the claim and the proposed amount of settlement.

20.2

RULE

Such notice should also include an explanation of the consequences to a customer who objects to such payment. This should follow the lines described in this rule.

20.3

RULE

The notice should be given in writing and sent by registered mail or judicial letter.

20.4

RULE

A customer who receives such notice is taken to agree to the payment of the claim unless, within ten days of receipt of such notice, he gives written notice to the insurer of his objection to such payment.

20.5

RULE

If a customer objects to such payment, the insurer must inform the third party of his customer’s objection to such payment.

20.6

RULE

A third party is entitled to challenge that objection, through litigation, and the insurer must pay a claim, which is awarded by the courts or arbitration, notwithstanding the customer’s objection.

20.7

RULE

The settlement due by the insurer to the third party will include the damages so awarded as well as costs and interest.

20.8

RULE

However the insurer is entitled to recover the legal costs and interest from the customer who had objected to such payment. Such recovery will be in proportion the customer’s liability as established by the final judgment or award.

21.1

RULE

It may sometimes not be possible to determine which of two or more vehicles is responsible for material damages occasioned to another third party, who in no way contributed to the accident (“innocent third party”).

21.2

RULE

The insurers involved must strive to handle and settle the claim of the innocent third party without delay. However when the said insurers are not in agreement as to the liability of the parties involved in the accident, or such liability is contested by such parties, then the insurers must make a proposal for the provisional payment “without prejudice” of the claim of the innocent third party, by sharing such payment equally between them.

21.3

RULE

It is reasonable for the insurers involved in such a proposed payment to give notice to their customers of the proposal and to require them to submit to arbitration as a means for determining ultimate responsibility.

21.4

RULE

Such notice shall be given in a similar manner to that described in rule 20.

21.5

RULE

It is not reasonable for an insurer to proceed with the proposed payment to an innocent third party, if any customer objects or fails to submit to arbitration.

22.1

RULE

Within three months of receipt of a claim, the insurer must notify the third party:

(a) its acceptance of liability and if so whether the damages have been quantified; or

(b) its rejection of liability.

22.2

RULE

If the insurer accepts liability, and the damages have been fully quantified, then it must make a reasoned offer of settlement.

22.3

RULE

Otherwise, the insurer must explain why it rejects all or part of the claimant’s claim or makes a compromise offer:

(a) if the insurer accepts liability, but the damages have not been fully quantified, then it must explain this to the third party claimant.

(b) if the insurer rejects or does not admit liability, then it must explain this to the third party claimant.

22.4

RULE

The insurer must, in respect of each part of the claim that it accepts, inform the third party claimant whether the claim will be settled by paying him, or by paying another person who is providing goods or services to the third party claimant, saving what is stated in rule 24.1. Examples of a payment to others for the provision of goods or services are the payment of professional fees to a lawyer commissioned by the third party claimant.

22.5

RULE

The insurer must give this information in a durable medium.

22.6

RULE

If liability though initially denied or not admitted, is subsequently accepted, then the insurer must within three months make a reasoned offer of settlement, if, by that time, the relevant claim for damages has been fully quantified.

22.7

RULE

If a third party’s claim for damages is not fully quantified when it is first made, within three months of the subsequent receipt of a fully quantified claim for damages, the insurer must make a reasoned offer of damages, if liability is admitted at that time.

22.8

RULE

A claim for damages will be fully quantified when the third party provides written evidence which substantiates or supports the amounts claimed to the satisfaction of the insurer.

23.1

RULE

An insurer must settle a claim promptly.

23.2

RULE

Settlement terms are agreed when:

(a) the insurer accepts the third party claim; and

(b) the third party accepts the insurer’s offer of settlement.

23.3

RULE

When the insurer settles the claim by paying the third party, the insurer should aim to make payment within fifteen business days after the insurer and the third party have agreed settlement terms, subject to the submission of the relevant receipts and any other requirements as are laid down by the insurer or in law being met by the third party. This does not prevent the insurer paying a claim before the third party has finally agreed settlement terms.

23.4

RULE

An insurer may not delay payment of a claim on the grounds that premiums or excesses are outstanding by its customer.

24.1

RULE

An insurer who settles a claim by paying for the supplies of replacement goods or for repair services must ensure that the receiver of those goods and services is the claimant. Therefore the insurer must ensure that any tax invoices clearly show that the supply was given to the claimant. The insurer must also ensure that no direct payment is made to the repairer or parts supplier; but that the payment be effected by the insurer to the claimant who in turn pays the repairer all the costs inclusive of VAT.

24.2

RULE

A survey report is a communication made by the insurer to the repairer concerned. In that communication the insurer must give clear instructions that he is acting as insurer in respect of the vehicle that is being repaired; and that any invoice should be issued to the vehicle owner and not to the insurer. Where VAT is recoverable by the vehicle owner, then the survey should be clearly marked as “without prejudice”. If on the other hand the survey is carried out on a “with prejudice” basis, then it implies that the insurer is undertaking to pay the full costs of the repairs or parts inclusive of VAT.

25.1

RULE

A third party claimant, who does not accept an insurer’s rejection of his claim (or part of it) may challenge that rejection. If he chooses to do so through the courts, the law lays down certain requirements as to the steps to be taken during such proceedings.

25.2

RULE

In general the third party is required to give written notice to the insurer of such proceedings. The failure to give such notice will prevent a third party from enforcing judgment against an insurer.

26.1

RULE

Every insurer in Malta must have a claims representative in each other EEA State and in Switzerland.

27.1

RULE

Every insurer in Malta may appoint a claims correspondent in each other State that is a member of the green card system. Such an appointment is optional.