Uninsured loss recovery refers to the process of getting compensation from your insurance company or another source when you’re involved in a car accident that isn’t your fault, but your own insurer doesn’t cover all your losses. This can include out-of-pocket expenses like the excess you paid after an accident, costs for hiring a replacement vehicle while yours is being repaired, and even missed work due to the incident.
For example, imagine you’re hit by an uninsured driver who flees the scene (often called a "hit-and-run"). Your insurance company might cover your car repairs but won’t reimburse you for the excess or any time off work. In this case, you can seek compensation through uninsured loss recovery provisions in UK law.
This is important because it helps ensure that victims of accidents aren't left financially vulnerable when other drivers are at fault and don't have proper insurance coverage. Under the Motor Insurance (Third Party Risks) Regulations 1988, insurers must cover their customers for such scenarios to a certain extent, ensuring motorists get some financial relief.
A practical tip is to always keep detailed records of any expenses related to an accident that isn’t your fault. This includes receipts for hire cars, notes about missed work, and proof of any other out-of-pocket costs you incur. Keeping these documents will make it easier to claim back what you’re entitled to under uninsured loss recovery provisions.
How This Relates to the FCA Redress Scheme
The FCA motor finance redress scheme covers 12.1 million agreements with an average compensation of £829 per agreement. The total cost to firms is £9.1 billion. If you had PCP or HP finance between 6 April 2007 and 1 November 2024, you may be eligible. The final deadline to complain is 31 August 2027. You do not need a claims management company.