Serious Financial Situation Because of a Car Accident over a Year Ago

Ok first some background information about me:

When I had this accident, I was studying my 2nd year of engineering at university. As part of our requirements, I need to intern for a company for 12 months between the 3rd and 4th year. Just keep this in mind for later.

So I've always been on the poorer side of the scale. My father has a car worth 500$ on the market, and ofcoarse, no insurance because we simply can't afford these extra costs, we were struggling to just get by. At one point, I needed to go get some shopping done and had an unavoidable car crash.

I was at fault because I rear ended the other vehicle. I repaired my fathers car myself by getting the damaged parts from wreckers (radiator, needed recompression ofc, bent the metal back in place, replaced bumper and hood). That cost me about what the car was worth.

I'm not going to give too many specifics on the accident, however it was a Nissan 2006 model which had about 140,000km on it. I checked the worth of the car going on gumtree and carsales at the time and it was about $5,000. This happened at the worst possible time too, I was saving up for a decent car and insurance and at the time of the crash I had reached $3,000 saved up, I offered it to him because I didn't have insurance and he rejected it. It was more than reasonable for bumper damage. It definately wasn't serious, noone was injured, police werent even called, he had to get it towed though because his back wouldn't close and I had to get mine towed because I busted my radiator. Anyway he decided to take it through insurance.

I didn't hear back from the insurance company for over a year. I figured something must have happened and I was luckily let off the hook. Now I get an email demanding $8800 wihin 14 days or else legal action will be taken. Something is very wrong to be charging that amount, that's more than 1.5x the cost of the car, I expected $3,000 max, In fact, I still have that $3,000 stored just incase this came back to bite me but there is just no way I can deal with triple that amount! Some stuff that was in this email included a flat cost for insurance expenses of $8000 (no specifics as to what was repaired, or were quotes were obtained etc), and towing which was approximately $800, the distance of towing was literally 10-20km.

Referencing back to being a student, I am now in between my 3rd and 4th year. I couldn't find any work where I was living so I had to move out and I am now getting my experience at a company paying pennies, working overtime hours WIHOUT overtime pay just so I can do my required hours. I am literally scraping on pennies (above that $3,000 mark which I had saved for the insurance) between rent, food and bills and I have no idea what to do.

Can someone shed any advice here? Is it worth looking for legal aid, simply what can I do here? I can't take out a loan because I am not earning enough and I have no assets worth even a third of what they are asking.

I'm really sorry that was long, heres a TL;DR, but please avoid giving me an answer like, you should have got insurance if you didn't read the whole thing:
Poor uni student with virtually no assets and income has a car accident and now the insurance company is demanding 8000$.

Edit with update:

Thanks all for your replies I'm going to leave an update here because I feel I owe it to you :).

I spoke with the insurance company and explained my situation, after a heated discussion and demands of what you guys listed below and several threats where exchanged (debt collector threats mostly), as well as to why they took so long (they decided to write it off, really?), we finally reached an agreement, $2500 and 190$ per week for 8 weeks. I still think its a bit much and the next 8 weeks are going to be tough but nothing I won't be able to handle hopefully and given my current situation I'd rather have it over then have to go through a long battle.

As for the letter coming by email, the original letter went to my original address (to my father), I had to look at the email one.

Now for the collision, the reason it was unavoidable was the driver I rear ended had unsafely lane switched into my lane, I looked up at my back mirror for a split second after the lane switch and when I looked forward noticed he was right infront of my face. The driver infront of him had decided to turn into a turning lane in the last second which was full, so he came to a full stop. I was at fault because he had already completed the lane transfer and there was no way to prove what he did (perhaps a dash cam would have yielded a different result). My car was lower than his so I took slightly more damage and the radiator line got punctured. His bumper got pushed in and slightly nudged the loop which locks his boot in, nothing a hit with a hammer couldn't straighten back.

Having said that I never exactly admitted fault, we both took each others details, the day after that I got a call from the insurance company and they were saying I was at fault and I stupidly said without thinking 'I'm completely broke, but how much is it going to be?", wasn't much that was exchanged after that, they were just like we'll let you know.

Case closed, if anyone has any opinions about this offer I'd still like to hear it though.

Cheers

Comments

  • +14

    Ask for proof. An itemised quote, pictures detailing. Ask them if the market value of the car was around $5000, why was it not considered an economic write off. I feel for you man.

    Declare bankrupt last resort. I believe the legal action result would be to set up a payment plan. Heard as low as $20/fortnight.

    • Will do, they say in the email the car was worth $9000 which was simply not true.

      I remember this because I did thorough research on the night of the crash and gave serious thought about if its possible to simply buy him a car with similar mileage and in better condition for $5000, take his one and sell it for what its worth.

      I didn't accept that either though.

      • It was probably insured for $9000 which is why they deem it worth $9000.

        • Get the same model to him as a replacement? max you be paying for that car now is still $5000 if you can find one on gumtree.

      • 2500 seam fair company are rip if they can.

    • +10

      Advising someone to declare bankruptcy over $8k is bad advice. Bankruptcy is not some magical 'get out of debt free' card, it imposes heavy penalties during the insolvency period, including being unable to leave the country without permissions from the trustee and having wages garnished or assets seized if OP was to come into any money during the period.

      Not to mention OP will forever have a bankruptcy on his record and for the next decade will probably be unable to take out any sort of loan (mortgage included) regardless of his income as an Engineer.

      As toristo mentioned below the best and only option is getting legal advice, preferably from a free provider such as legal aid. The whole thing sounds fishy and even if OP has to pay it back in its entirety there may be options due to his income and work status.

      • Hence why I said last resort, like it shouldn't be an option. You'd get a personal loan before that.

        • +3

          Why mention it then?
          Shoulda said personal loan…

      • The insurance company would very likely just keep sending you letter and ask for money because they need to pay for the legal actions but they can not sure that all money can be recovered. Chasing for just $8000 and they may need to pay a few thousand more for the recovery service, legal actions but may end up not able to get any of it back if the person disappear or declare bankruptcy.

        Few of friends have just ignored the letters sent from insurance and even returned the letters saying there is no this person living at this address. And after a year keep doing this, there are no more letter and they still ok. They can still purchasing insurance, home loan, traveling, go in and out of the country without problem.

        But as he said he is studying in engineering and I would not advise of that. It is because engineer are need to be good at their own fiance record in order to register.

    • Sorry for the obvious question, but doesn't third party insurance come mandatory along with rego payment?

      • +6

        Damage to people, yes
        Damage to property, no

        Common misconception out there. A lot of people believe this insurance covers damage to other cars etc. It generally doesn't

      • +1

        The only thing that comes with rego is CTP (paid separately in NSW, otherwise included in rego), which is technically third party PERSONAL insurance (versus third party property (TPP)). Which covers medical costs etc but not damage to property, so of no help here.

        edit: beaten by 11secs

      • I think the compulsory CTP insurance only covers personal injury, not any damage to property.

  • +7

    Some universities have legal aid kind of services available to students. Absolutely get advice immediately. If they contact you directly in the 14 days, explain you are awaiting legal advice and will reply within that time period.

    Do not offer any money, settlement etc or discuss the particulars with them until you have spoken to someone qualified to provide the advice. This is ozbargain - we'd of been more help when you needed to fix your car and could have got you one for 1/10th the price you expected and it runs on Eneloops.

    Jokes aside, good luck and don't let it stress you. There is no point worrying until you've got the advice and can proceed armed with knowledge of what they can do, can't do and what your next steps should be.

    • +5

      If you do intend to seek advice, which I concur is the right course, I suggest writing to the insurance company stating you are doing so. If they hear nothing from you they may be quicker to escalate.
      So far, you have received a bill. It is up to them to demonstrate that you must pay it.

      I am sympathetic to your problem, good luck.

    • +1

      Thanks,

      I will definitely be seeking legal advice then, probably tomorrow, I will write back to them as soon as I have had a chance to consult with a lawyer.

      • Definitely get legal advice ASAP and let the insurance company know that you're seeking legal advice
        But don't say any more than you have to, to avoid incriminating yourself. Bankruptcy should be your very last resort.

      • +4

        And don't let this stress you, it's seriously not worth it. They are a money-focussed company. They will settle for less, especially from a poor student. $3k vs the costs of going to court with a slim chance of recovering money from you… they aren't idiots.

        And if you're going to drive, you really need to get some insurance cover. You can't rely on being poor and helpless to get you out of situations.

        • No for sure, as upset as I am over the situation I put myself in to begin with, I'm just happy I didn't get injured, injure anyone else or crash into something alot more expensive.

          Cheers.

      • Your students association or SRC would be useful to talk to.

  • Good luck mate, Update us on what happens.

  • +31

    If you can't afford $150 per year for 3rd party property damage insurance, you have no place being on the road.

      • +1

        Should have Uber'd using one of the $25 free credit ;)

      • +7

        $1500? That's not right. Maybe for full comprehensive insurance but definitely not for a <1k car.
        Going on a few websites for an 18 yo with no history, 1k car I get figures of $250-350.

        I agree with t_c. If you cant afford insurance (which is like half the price of rego) then you don't belong on the road.
        You could of caught a taxi, had groceries delivered (both coles and woolies offer this)

        Imagine you are the other guy who has a decent modern car, pays his rego and insurance, gets rear ended by someone
        with a crap car and no insurance? How would you feel?

        • Third party property may be as high as $1500 for a P-plater uninsured before. I've that number before.
          It may be as low as $150 for an older driver with 10 years no-accident insurance history, I've paid something close to that.
          I would say both t_c and firstphase are likely correct with those numbers.
          As for "how the other guy feels" - he is insured, not a worry in the world.

          This is between an insurance company and their favourite rip-off repair shop and some unlucky student who should go find someone to represent him quickly. Without paying. That means asking your uni or something - someone will help you - find them.

        • +3

          $150 is quite low - but $1500 is absurd. As an 18-21 year old I was paying something in the range of $250-400 from memory.

        • -1

          @AlanI:
          It's not absurd, just where are you guys getting third party insurance for that low? I just did a quick check with similar information to what I would have had previously (adjust my date of birth to be 18) and the lowest I got was $1300

        • @firstphase:

          Check bingle, it's relatively cheap because they don't hire phone staff, it's all done online

          They are backed by aami -> suncorp

        • @firstphase: Are you looking at the premium or the excess? I paid around $240/year for 3rd party when I was 17 (7 years ago) with a $4-5k Magna. My sister (18) is paying $800/year comprehensive insurance for a $14k golf.

        • +1

          @firstphase:

          I just checked racq, third party property for a 17yo is approx $250pa, or you can even opt to pay monthly at $30 per month.

        • +1

          @firstphase:

          okay, so made up quote:
          DOB: 01/12/1997 (18 years old)
          Gender: Male
          Date of obtaining P plates: 05/12/2015
          Car: 2001, Ford, Fairmont, Sedan, Auii, Ghia, 40, Fuel Injection (mech & Elec)
          Starting cover: Today - 19/12/2015
          Location: Ringwood VIC 3134
          Finance: No finance
          Car use: Private Use
          Previous car accidents: -none-

          Bingle Third Party Property Damage: $298.47/year (Quote QTE009411455)

          Just Car Insurance Third Party Property Damage: $427/year (Quote QTE864043591)

          Most insurers won't outright refuse to sell you a policy based on your answers to their questions, but if they decide you're too risky (e.g. too young, really old car, too many insurance claims) they just give you a quote for an insane amount of money (like 5+ times the going rate) because they know there's no way in hell that you'll buy it. So, if you see an insane price, that just means that particular insurer isn't for you and you should look at another more open to your particular risk profile.

      • +8

        It really concerns me that you say rear ending the guy was unavoidable, that you were "just unlucky", and that there is no alternative for you to drive despite it clearly being beyond your financial means.

        It also concerns me that you can do so much damage to the car you were driving, yet expect the damage to the other car was minimal.

      • +3

        Can't afford insurance = Can't afford car

        I really disagree with the way you describe it as an "extra cost". Leather seats, premium sound system, etc are extra costs. Insurance is not.

  • +12

    Should have caught the bus that day mate. At least as a minimum you should get 3rd party car insurance.

    Ive had an uninsured driver rear end me, nothing major but about $2000 damage private cash repair 2nd hand parts or $5000 insurance repair all new parts.

    I gave the guy who hit me the option, he went radio silence on me for 6months so i handed it over to insurance. I got a call not long after with a sob story and then abuse.

    So as much as its a shit situation you prob shouldnt have ignored it and just fixed him up.

    • +2

      Should have caught the bus that day mate.

      No kidding

      So as much as its a shit situation you prob shouldnt have ignored it and just fixed him up.

      I think he knows that now.

    • +2

      I did not ignore him, I offered him $3000 which was more than enough for the damage done to the rear end of a $5000 car and I even offered to buy him an equivalent one and buy his crashed one from him. This was at the time of the crash.

      He was adamant about going the insurance route and I even kept that original $3000 incase he came back, I just did not expect a reply a year later for $9000.

      • -1

        You will find the insurance company probably wrote the nissan off and that was the market value or agreed value $9000 at the time. The owner may have had accesories that you, carslaes and scumtree did not factor in. For instance on one of my vehicles i pay a little more for insurnace for an agreed value. Expect the unexpectable in situations like this

        You can go down the legal aid way but legal aid can only help you to a point, then youll need to engage a law firm and the costs will end up exceeding the 9k you owe the insurance company.

        Bite the bullet, pay and get on with your life, you will eventually graduate, work and look back at this as a insignificant speed bump in your life

        • +1

          So what?
          If the owner had it insured for an 'agreed value' of eg. $20K that suddenly means anyone damaging it owes them that much???
          The guilty party can not owe more than what the car is really worth (plus 'pain and suffering' if it ever came to that, but we are not the US.)

        • +1

          Yes. Eg 4wd with bullbar, tow pack, offroad accessories, long range tank, roll protection etc. When the car gets written off by the insurance company it gets written off entirely. So the agreed value is the market value plus the cost of replacement. Which is what you owe if you hit it.

          Make sense flyboy?

        • -2

          No.

        • -2

          Get rich quick scheme

          Insure car for 1 billion dollars

          Slam on down high pedestrian route and say someone was stepping out when car close behind you

          Profit?

      • +5

        Fight them all the way.
        They should have provided quotations for the damage. You are only responsible for the damage you did, not what they decided to do. If you only damaged the bumper, you are only responsible for the damage to the bumper.
        Make them prove the damage to the car firstly.
        It seems that you are being taken for a ride.
        And you dont need a lawyer to fight them, just solid and proper preparation.

  • +4

    arrange a payment plan stating you dont have money…. they might take 10 off you a week or so, and after one year just write it off….i knew a chick who did this

    but id also ask for reason bill so high.. and given you had no control over to the repairer they could have paid a premium one who gave kick backs…. legal aid may be able to negotiate a smaller fee…. maybe the insurance company has room to move but seeing if you bite

    • +2

      +1 Unclesnake. This is spot on. If they try and threaten you just remember that's all it is. You have plenty of rights bud.

    • Might have had something to do with the fact that it was ilegally parked

  • +1

    I thought the insurance company needs to send you a letter (not just an email).

    Are you sure it's not a scam?

    • +1

      I thought the same thing. The first thing I would do would be to contact the insurance company directly (find the contact details through a verified source - scamming companies can have phone systems set up too!). If they confirm it's true, I would d an immediate sob story on the phone and explain how poor you are. DO NOT tell them about the 3k. Thanks your option of last resort. Good luck…I feel really bad for you.

  • +2

    3000 is really the cost of a very minor damage nowadays.
    If the email is real it prob isnt up to you whether gumtree sells for 5000 or $50000 if iy got repaired or not.
    (I would NOT reply to the email at all before seeking real, non forum, advice. no email reply or phone call)

  • +2

    Whether he went through his insurance or not the cost for repairs should have been the same. Did you take pictures of the damage? Normally if you had third party you would have just paid the excess and your insurance company may argue with the other insurance company behind the scenes that the cost is too high for the damage to the vehicle but now you might have to do that yourself.

    Also I wouldn't say you were 'unlucky' that you rear ended someone or that it was 'unavoidable', if you want to take the risk of potentially hitting a lexus or something similar you should be ready to accept any repercussions and should have driven much more carefully.

    Is it possible to take one of those loans that go onto your HECS? Or an interest free university loan?

    Anyways, best of luck!

  • +6

    and ofcoarse, no insurance because we simply can't afford these extra costs,

    I'm gonna stop you right there WTF? Why didn't you have TPP insurance? If you can't afford those extra costs then how the hell do you afford rego, fuel. servicing etc ?

    I'm not going to give too many specifics on the accident, however it was a Nissan 2006 model which had about 140,000km on it.

    How do you know how many KMs?

    Now I get an email demanding $8800 wihin 14 days or else legal action will be taken.

    Alright so that $8800 will include

    • Towing

    • Possible hire car

    • Parts

    • labor

    The car might even be a right off…

    I offered him $3000 which was more than enough for the damage done to the rear end of a $5000 car

    How do you know what the value of the car is? Gumtree is NOT a accurate guide.

    I hate to say this but it is probably an accurate quote. Having said that contact the insurance company and ask for a itemised quote and post it on here.

    Did you take any pictures at the time of the crash?

    Also for god sakes get insurance… What would have happened if you hit a BMW or a Ferrari? Not a crappy 2006 nissan?

    • +1

      you can lookup the market value of any car online

      • +1

        Yes indeed you can. But looking on redbook for the market value is much better than gumtree.

        I don't get why I'm being negged - probably because I'm saying you should basically pay up because to me that quote sounds fairly reasonable.

        By all means ask for a itemised quote as well I just think it won't show anything unusual.

        Talk to legal services at your university - do this today most businesses close today and reopen on the 3rd of Jan.

        Also talk to the insurance company just to basically make contact with them so they won't start legal action.

        • I mean, I looked at other sites too…

          That WAS what the car was going for, If I were to buy his car before I crashed into it I sure as hell wouldn't have paid $9000… no one would…

        • @firstphase: $9000 might be what the market value is and therefore you wrote it off… Not to mention the guy probably claimed a hire car for a week or so, the insurance company will be wanting to recover towing fees

          The really really important thing is to 'respond' first thing Monday morning if you haven't already. If you call them and say "can we sort this out after christmas" they will most likely be fine with that.

          Ask for a itemised quote though.

        • @knick007:

          There's an update mate in original post, thanks for your help :).

  • +3

    I went through this situation this year . bought a car and on the way home rear ended someone

    Lawyer sent me a letter demanding $7000 with in 14 days

    I replied with a very brief response via email (offered $1500 or ill pay off $3000 at $10 a week)
    I mentioned i was under financial difficulty.

    Lawyer came back and said he will take the $1500 + $3000 paid off at $10 a week

    I said no , you can have one or the other and offered $1500 + pay off $1000

    a week later they accepted.

    They claimed the value of the vehicle was found using redbook
    I paid the $20 and got the values .. From what i believe … in the circumstances if one person not at fault does not have insurance. The insurance company will pay out the lowest end of market value.
    He threatened me with the magistrates court each time which i ignored as it was more of a QCAT matter.
    I could not get free legal advice as there was a 4 week wait for a appointment.

    Push financial hardship and offer a very low amount - it shows you are trying to negotiate :D

    • +2

      We were both un insured - so didnt have a insurance company chasing me.

      The lawyer also gave me detailed quotes which itemized everything , even the factory tool kit to be replaced.

      The lawyer tried to put his fee's on me $258 i always included that in my offers as i would not pay anymore to cover his costs etc.

      The quotes failed to show the KM of the car.. ended up being 350000 on the clock which devalued the vehicle as i wouldnt buy one with that amount of k's

      Sure the guy wants his money … but keep bargining and making counter offers .. do not offer something you can not afford not go bankrupt over it.

      If it goes to court they will see you are a student and possibly honor it at $10 a week , and also see that you have been trying to make a offer to settle .

      • +1

        For the person you hit, high kms is irrelevant. You took their car off then, which may only have seemed like $2000 on redbook, but as a car that may be reliable, had for years etc, it's worth a lot more than having to buy a new one, transfer tax, new rego, new insurance,

        And most of all, time and money without a car.

        Think about this next time your value someone's car at the lowest value on redbook.

        • Valid points.. But in my case he accepted my lower offer finally so must of been happy.

    • +1

      This is the recommended course of action I would take. Surprised it wasn't higher up.

  • +11

    Being poor is no excuse for not being insured. So what if the guy went through insurance? I would go through insurance too. What you see isn't necessarily everything - you could've done damage that you can't see, and an insured value of $9000 for a 2006 car isn't that unreasonable either - my 2001 turd car is insured for $5000 with 120,000km on the clock despite similar age cars going for $3000 or so on scumtree.

  • +12

    As an aside,

    had an unavoidable car crash.
    I was at fault because I rear ended the other vehicle.

    If you rear ended him, it was not unavoidable. Simply drive at a safer distance, if you're not now already doing so.

    • +1

      Simply drive at a safer distance, if you're not now already doing so.

      Not always an option, especially driving on highways in rush hour. Leave a substantial gap between you and the car in front of you, and some arse in a BMW will swerve into your lane to get the 20 millisecond advantage in his daily commute. If you leave a gap, another car will fill it and you will always be closer to the car in front of you than is safe enough to stop.

      • +2

        Leave a substantial gap between you and the car in front of you, and some arse in a BMW will swerve into your lane to get the 20 millisecond advantage in his daily commute

        So the 20 miliseconds that you MUST prevent him saving on his daily commute is worth the risk of rear ending someone, or worse, costing a life or two? If you're travelling at a safe distance and "some arse" cuts into the gap, the time it's going to cost you in your daily commute to then create a safe gap again is, quite literally, ONE SECOND. Do the math - if 300 people were to cut in front of you (never going to happen) it would add a MASSIVE 5 minutes to your daily commute. Stay safe!

  • +3

    Let them take you to court. They should have provided quotations for the damage. You are only responsible for the damage you did, not what they decided to do. If you only damaged the bumper, you are only responsible for the damage to the bumper.
    Fight them all the way. Make them prove the damage to the car firstly.
    It seems that you are being taken for a ride.

  • +13

    Firstphase, for some reason I cant private message you.

    However DO NOT PAY THAT.

    I work in Consumer Protection and they cant just send you an $8000 bill and expect you to pay that.

    Do not be intimidated by debt collectors. The ACCC has published guidelines for debt collectors at https://www.accc.gov.au/publications/debt-collection-guideli…

    If you encounter behavior that is concerning, please make a complaint to the ACCC.

    Good Luck

  • +9

    That sucks OP.

    I wonder what took them a year, they're usually pretty quick at following up when people owe them money. As others have said get legal aid from your uni or student union. Make them at least itemise the charges.

    Let this be a reminder to everyone reading. If you can't afford 3rd party property then you can't afford to drive. Yes it's a cost, but it's not that expensive

    • Lesson learned, thanks m8.

    • If you can't afford 3rd party property then you can't afford to drive

      It cost $1200 a year for third party insurance in Western Sydney on my $1500 1996 Camry when I was on my P's. On top of that was the green slip, and on top of that was the standard rego costs. Trying to play it off like it's not expensive is wrong.

      • If it costs $1200 then you should get it or get the bus/train/uber/bicycle. It's a huge risk.

        When I say it's not that expensive I mean it's not expensive compared to having a very minor accident with even a moderately priced car. As in the OPs case.

  • +15

    Sorry to hear mate.

    I was in a similar situation a while back because I stupidly forgot to renew my bike insurance for about 2 weeks. Fortunately for me the bill from the insurer was only about $500.00.

    First of all - don't let them intimidate you. The advice from the posters above is solid and pretty much sound.

    Definitely ask for an itemized bill and if you can seek legal advice from your university - they should have some kind of legal clinic available for students, otherwise there is legal aid.

    Given that the sum is $9,000.00 - your best bet is to deal with this on your own after some preliminary advice. Lawyers get extremely expensive, very quickly and depending on your jurisdiction, might not be able to represent you in the minor claims division or your state's equivalent in Court.

    Now onto the good news.

    Debt recovery is a notoriously long process that is more in favour of the debtor than the creditor.

    Seeing as you have NO assets, in the absolute worst case scenario, if you do declare bankruptcy you will be released from your debts. There are other consequences of bankruptcy i.e. not being allowed to leave the country (for 3 years), and your ability to obtain credit in the future could be effected. But it is highly unlikely things will progress to that.

    More likely your options would be:

    1) Negotiate with the insurer - what I would do is do a shit ton of research into the car, and repair costs etc. I would take copies of ads of the same car, find its redbook value, and the value of anything else the guy may have claimed. I would also ask for quotes for towing, repairs from as many people as possible - and would find quotes for anything else the insurer has itemised after they send you an itemised bill (which they are required to do if you ask them). Come up with a justifiable case as to why you think $9,000.00 is excessive based on your evidence.

    2) Then negotiate a payment plan - you're effectively impecunious. This works in your favour. If the insurer knows you have no money at all - they'll be willing to take what they can get because debt recovery at Court will take years and cost them time and money. Don't commit to any payment plans that you are not 100% comfortable with. It is not uncommon for payment plans of $5-$10 per week/month being set up.

    3) Ask for a deed of release and have your free legal service read over it.

    4) Now – if negotiations break down or the insurer is just plain difficult – they might issue a claim against you.
    Don’t panic – it will take a while for it to come, but it’s really not that bad.

    A claim for $9,000.00 will sit in the lowest jurisdiction at court. Often lawyers are not allowed to represent clients there – so the insurer will have a costs clerk there instead.

    Lower courts are also much more patient and sympathetic to unrepresented litigants so long as you’re not blatantly rude to the Magistrate and so long as you show respect.

    The key thing is to turn up to the hearings and if you can’t, seek an adjournment by contacting the otherside + court registry.

    Don’t unnecessarily defend your claim – you’re clearly at fault.

    What you can dispute is the debt sum – hence the evidence from earlier.

    Be honest to the magistrate about your paying capacity.

    The insurer will probably think you’re lying and will get judgment against you either for the $9,000.00 or some lesser amount if you were successful in persuading the magistrate.

    The insurer will ask to go onto an investigation summons – where the court will ask to look at your financials.

    After the magistrate lol’s at your finances they’ll make a payment plan for you to repay the debt – and this is where everything is in your favour. The courts look very sympathetically to unrepresented, impecunious defendants. You’ll get a payment plan that is like $20 a month or something – so the debt won’t be paid off for years. There's a whole heap of things they can't take away from you such as your car, house etc. unless you make repeated and almost deliberate failures to stick to the payment plan.

    So given the pain in the arse the court system is – you can see why the insurer might be inclined to take a significantly reduced but upfront payment without the hassle.

    Just be ready for the long haul and try not to stress too much about it.

    Best of luck! Keep us updated.

    • Solid advice, thanks for taking the time to write something with this much detail.

  • +2

    You should declare bankruptcy bro, it worked for me !!

    • +2

      Terrible, terrible advice.

      • +6

        Given his username, im pretty sure he's joking

    • lol wut

  • Just understand that if you declare bankruptcy or refuse to pay, your credit rating will ensure you have financial difficulties for quite some time to come. Just make sure you negotiate rather than refuse.

  • +9

    Hi firstphase, I work in insurance and negotiate and settle these types of demands everyday. If u want, you could forward me these demands and I can do a review for u.

    Cheers

    • -4

      Thanks for the offer though I won't need it :).

    • Sounds like one of your files?! What took you a year? ;)

      • Ahahhah I don't recover money for the company fortunately.

  • +1

    Is it the insurance company that sent you the demand or a debt collection agency? If it is the later, you likely already have a mark on your credit file so you may as well tell them you have no assets of value, no income or in otherwords, tell 'em to jump off a cliff. If it's the insurance company, they'll pawn it off onto a debt collector if you don't come to some payment arrangement with them. If you do decide to pay, negotiate the price down as they have a lot of wiggle room.

    As you're young, it's probably you will not be buying a home in the next 5-7 years, and by that time you will have established yourself in a career a bit more and the bad mark on your credit file will drop off. If you do this, don't feel bad for the driver as it sounds like his car has been fixed and he has long forgotten about it and you. You won't go to jail and you won't have a criminal record, it's purely a civil matter.

    I say forget about it and just focus on building a career. Everyone wins then except the insurance company, and who cares about them.

    • No it was a letter of demand, they threatened with a debt agency if I didn't respond in 14 days.

  • +1

    Can someone enlighten me please - with accidents I thought the insurance companies normally ask you who's at fault or what your side of the story is? Isnt that they case ? From reading OP's story it seems they just listen to their clients story and send you the bill. (not saying OP is not at fault just want to know the process)

  • +1

    even if you couldn't afford insurance, you need protection from these type of things. Insurance companies let you pay for their premiums week/monthly.

    8000$ might seem high at least you didn't hit and bus or Porsche, you might end up selling you home to cover the costs.

    • Rents, so would more likely be a kidney

      • Bankruptcy would've been a valid choice here sadly :/….

  • +1

    Honestly, just give the insurance company a call and tell them you only have $1000 to give them because of your financial situation. They will reject, but then just ignore the barrage of letters. They might sound serious and mention legal action and debt collectors, but just keep cool and say you only have $1000 to give. After like 6 months they will accept your offer and move on. Done it before and would do again. These insurance companies just try to Capitalise on these types of situations.

    • +2

      These insurance companies just try to Capitalise on these types of situations.

      Well they had to pay out their customer. You can't blame them for trying to recover the costs from the person responsible.

      • +3

        You can't blame them for trying to recover the costs from the person responsible.

        No, but you can blame them for trying to extort inflated fantasy figures from the person responsible.
        You can also blame the victim for immediately stupidly ruling out what was probably the best deal they were going to get (direct from OP.)

        But mostly you can blame the OP (and many others) who drive around (what are probably in many cases unroadworthy vehicles) with no insurance at all. It should be illegal.

    • "These insurance companies just try to Capitalise"

      haha good one!

  • +3

    Advice in this forum is exceptional: well done responders.
    The one exception is the bankruptcy advice: totally wrong for a paltry $9,000.
    Summary:

    -do loads of research into cost of repairs, table it to ins co
    They will fear you tabling same in a court and will be responsive
    - don't be bullied by their arbitrary discernment of actual costs
    - make them prove they got quotes. These may be rigged so be prepared to investigate
    - spend a lot of time sending emails to the ins co. Be a PITA and keep them busy responding to you. Bombard them!
    - demand they show full evidence.
    - make a lowball offer in settlement not $3000 by the way, more like $1000.
    - let them know you are prepared to challenge their claims as unreasonable in a court.

    Don't fear, you should not be intimidated by these pricks!

    • Well, I started at $1000, but as per the updated OP, I decided to settle for a sum higher than what I originally planned. I have too much stuff on my plate for a drawn out battle with an insurance company atm.

      Cheers

  • +2

    Lucky OP didn't hit a new Lux car! Or my car.

    • Yes I'm lucky I didn't hit something expensive either, I'm also happy there was no injures caused which wouldve been far worse than $9000.

  • Probably looking at ur phone.
    No insurance which is around $300~ Like others have said.
    No sympathy from me.

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