Urgent help needed for Car Insurance query

yablue · 4 April 2012 at 11:45AM

I purchased my car insurance June2011 from MMA through the broker Swinton, to be paid by monthly instalments. In September, I had a non-fault accident which resulted in my car being written off and I received a cheque from MMA Insurance minus my policy excess which I was instructed to recover via my solicitor from the third party. 2-3 months later and I notice that Swinton are still taking the monthly direct debit payment so I cancel the DD at the bank and ring them to ask for my money back. They have told me that I should have rang them to cancel the policy and that I now owe them another £225 which includes a cancellation fee and that if I dont pay immediately (today) then they will pass onto debt collectors resulting in further charges. Is this right, or should the responsibility of cancelling have been between themselves and MMA and can they legally pursue me for insurance on a car that was uninsurable due to them writing it off?

thenudeone · 4 April 2012 at 12:28PM

The policy is an annual one, not a monthly one.

You'e entered into an agreement to borrow the annual cost of the policy and spread it out over 12 months, but the policy is still an annual policy and has to paid in full, even if the policy has ended.

Once a total loss claim has been made and you've been paid for the value of the car, technically speaking the insurance policy ends.

You bought insurance to cover the cost of the car in case it was in an accident. You've now received the value of the car (which is what you paid for when you bought the annual policy). End of policy.
However, in many cases with a reputable insurer, they will allow any unused months to be transferred to a replacement car, although they may not have to.

The cost of the "lost" months, plus your excess can be claimed from the third party, if they admit blame. If you have motor legal cover, get them to sort it all out

If the third party admits blame, it may have been better to try to claim directly from their insurers rather than make a claim on your policy. They sometimes fall over themselves to help in these circumstances because otherwise you may go to a credit hire firm and the costs would rocket.

yablue · 4 April 2012 at 1:19PM

Thanks for the quick reply.
The policy details state that the policy can be cancelled subject to a cancellation charge (approx £50). I was under the impression that as its a non-fault accident, that the claim comes off the third party and not my policy? If so, then the issue is whether they should have cancelled the policy when they wrote the car off (and I sent in my documents) or whether I should have made an additional call to specifically cancel the policy. They're saying its the latter and thats why I still owe them and won't be getting a refund.

InsideInsurance · 4 April 2012 at 1:29PM

Many insurers when a total loss occurs will suspend the policy and it is then the customers choice if they want to cancel (and pay the cancellation charges) or transfer the policy onto a new vehicle for the remainder of the term. If the customer doesnt make the choice within a predefined time limit it then is assumed to be cancelled.

Ultimately however these practices vary between insurers.

From what you say, unless the TP was also insured with MMA then you claimed off your insurance not theirs. Your insurer will then counter claim against the TPI on your behalf and recover their outlay. This makes little difference but may stop the cancellation be effected until after MMA receive their money back as until the cheque is in the bank you can never be 1000% sure you're going to be reimbursed in full.

It sounds like your real complaint is with your brokers or insurers for not explaining the process correctly - though certainly cancelling your DD is NEVER the way to cancel a home or motor insurance policy. It is like saying your employers just not paying you at your next payday is an adequate way of dismissing you.

First of all re-read the letters you were sent to ensure there was no instructions in there and in the second instance complain that the process wasnt explained and you didnt think the insurance could continue as there is no insurable interest given the vehicle was total lossed.

thenudeone · 6 April 2012 at 9:44PM

This is the crucial bit:

InsideInsurance wrote: »

then you claimed off your insurance not theirs.

Which is why I mentioned about claiming from the Third party. Unfortunately since you claimed on your insurance, not theirs, it's your policy that gets hammered, at least until it all gets sorted out.

Urgent help needed for Car Insurance query

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