Ask an Expert


A claim has been lodged, accepted and paid for by the insurer.

An uninsured third party reversed into the customer's parked vehicle. The uninsured driver was identified. The insurer has established liability with the third party and has set up a payment instalment plan to recover the debt.

Insurer is stating that the customer excess will only be reimbursed once recovery of all costs has been completed. With the payment plan agreed this will take 12 months.

Even if the insurer has a policy of not waiving the insured excess. I have suggested that the customer excess should take priority over the insurer's costs.

I have asked that once third party payments reach the level of the insured excess, that the insured excess be reimbursed and then all further payments should be retained by the insurer.

Reply: Crossley Gates

Unless the policy itself sets out the priority for reimbursing uninsured losses over insured losses, the legal position in New Zealand on this point is unclear. 

There is clear legal authority in England that reimbursement of the excess to the insured is the last priority, not the first. This is somewhat surprising, and is based on the reasoning that the excess is something the insured voluntarily agrees to. I suggest that is often not the reality. The insurer may be relying on this authority being followed in New Zealand in reaching its decision.

Historically, there has been a convention (and nothing more than that) for the excess to have first priority.

June 2019

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