Should I bank an interim payment?
I had an accident when a car pulled out of a junction. I couldn’t swerve as there was a car coming the other way. We collided and I went over the bonnet.
My claims company sent me an “interim payment” from the third party’s insurer and said I should pay it in. I’m worried if I do cash it will be seen as full payment or I may have to repay it because the letter is worded “This is an interim payment issued without prejudice. Because of this we reserve the right to claim this payment back if we find further evidence that changes our understanding of this claim”.
Can I bank it?
Rebecca Burton, by email
Answer
This is a partial payment paid on an interim basis, until such time as the claim concludes. The value of interim payments made is deducted by the paying party at the end of the claim to avoid a Claimant obtaining a double recovery.
The wording used by your opponent’s insurer is to protect them should something come to light meaning that in fact the accident was your fault. They have reserved the position to reclaim the money from you in the event that this is the case. Based on the facts you have outlined this is unlikely to be relevant.
Sometimes insurers issue interim cheques with the cover letter stating that it is in full and final settlement of the claim. In these circumstances the Claimant’s solicitor should write confirming the real position and that it will be banked on the basis of it being an interim payment.
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