Claim Farming After a Car Accident: How to Protect Yourself

Most drivers do the sensible thing after a collision: they look up their insurer, call the number they find, and expect their insurer to arrange the claim, repairs and contact with the other driver's insurer. Unfortunately, some drivers are being diverted away from their insurer by businesses that appear to be connected with a genuine insurer but are not. This practice is often described as claim farming or claims harvesting.

What is claim farming?

Claim farming generally involves a third party identifying people who may have a claim and steering them towards a particular repairer, claims manager or law firm. In a motor vehicle context, it may happen when a driver searches online for their insurer's phone number and clicks on an advertisement or search result that looks like the insurer but is operated by someone else.

The driver may then be encouraged to authorise towing, repairs, a hire car or legal action before they have spoken with their own insurer. Their vehicle may be taken to a repairer they did not select, and a related law firm may be engaged to pursue the other driver or the other driver's insurer for the repair costs.

The problem is not that every third-party claims service is improper. The problem is that a consumer may be misled about who they are dealing with, lose control of the repair process, or become involved in a dispute they did not understand or intend to start.

Why it matters

If your insurer manages the claim, it will usually arrange assessment, repairs and communication with the other insurer under the terms of your policy. That is part of what your premium pays for. If your claim is diverted elsewhere, you may not receive the same repair pathway, and you may not have the same comfort that the repairer is approved by your insurer or suitable for your vehicle.

There can also be cost and liability issues. For example, charges for towing, storage, hire vehicles, repair work and legal costs may become disputed. In some cases, the at-fault driver may be pursued directly for amounts that could have been dealt with more simply between insurers.

Warning signs to watch for

• The business answers in a way that does not clearly identify your insurer.
• You are asked to sign an authority before you have received clear written information about who you are dealing with.
• You are told not to contact your own insurer.
• Your vehicle is towed or booked for repairs before your insurer has confirmed the claim process.
• You are promised that everything will be free, but the paperwork refers to recovery from the other driver or legal action.

What to do after a collision

• Check that everyone is safe and call emergency services if required.
• Exchange names, registration details, contact details and insurer details with the other driver.
• Take photographs of the vehicles, the scene, number plates, damage and any relevant road conditions.
• Contact your insurer using the phone number printed on your policy documents, insurance certificate, insurer app or official website.
• Do not sign repair, hire car or legal authority documents unless you understand who is providing the service, who pays, and what happens if recovery from the other driver is disputed.

The key message

If you are involved in a collision, report it to your own insurer as soon as possible. Let your insurer explain the claim process and deal with the other driver's insurer where appropriate. Before you agree to any third-party repair, hire car or legal service, make sure you know exactly who you are dealing with and what you are authorising.

A few minutes spent checking the phone number and asking the right questions can help you avoid delay, unnecessary disputes and repair arrangements you would not otherwise have chosen.

Need advice?

If you are unsure whether a claim, repair authority, hire car agreement or demand for payment is legitimate, seek legal advice before you sign anything or respond. Early advice can often prevent a small motor vehicle claim from becoming a costly dispute.

Disclaimer: This article is general information only and is not legal advice. Motor vehicle insurance rights and obligations depend on the policy wording, the facts of the collision and the applicable law. You should obtain advice about your own circumstances.