Car insurance total loss claim - MSE newbie needs help!!!

mistryman86uk

Hi all,

This is my first post to the forum after being a long time MSE fan and follower.
I really need help as im so confused about where i stand with my car insurance claim!
I am 23 years old and in april this year i bought a Lexus is200 for £3850 from a private seller in B'ham.
The car itself was bought with my own money but i my dad chose to help me out by having the car and insurance put in his name as the legal owner and main driver so i could get a lower premium
I only ever use the car to commute to work and at weekends (SD&P) but my dad is the main driver, so on 17th July on my way to work i lost control of the back end of the car after taking an exit at a roundabout. It was a wet morning and i totally accept liability for the accident - luckily there were no other cars or people involved.
The Lexus however was not as lucky - the impact of hittin a signpost side on had bent the bottom part of the chassis thus twisting most of the body panels making it a write off.
I rang the insurance company yesterday, after having waited 4 weeks for some sort of contact, and to my amazement they have issued me with a cheque for £275 after excess deductions.
My father and i were extremely dissapointed with their outcome. They said that because my car had been valued at £1000 by me on the documentation - even though i felt i had queried this at the time of the intial claim, i had told the operator that the car was worth nearer £4k.
After trying to explain that this can't be right i was passed from pillar to post between the underwriters and the intermediaries; both of which seemed unwilling to help or make the effort to find out how to rectify this.
For a young driver like myself i can accept that the accident was my fault but it would take an idiot to see that the type of Lexus it was added to its condition would mean i would get a much higher payout.
Having read a few similar problems on various websites and forums i have seen that many people eventually write to the ombudsman.
But because of the £1000 valuation on my documents i dont know where i stand - even an advisor at my insurance company said its an easy mistake to make because the 4 is next to the 1 on a normal keyboard and a £4000 valuation compared to a £1000 valuation would have made no difference to the policy price.
I am going to ring the underwriters again tomorrow to try an dispute the amount they have settled on.
But in the meantime can anyone help or advise me further as i see it as a mistake on the documention or a typo on their part.

Many thanks for any replies given

Mitch.

debtfreein4years

accept what you got and walk away without making a fuss as they could cancel the policy for having your dad as the main driver when you were in fact the main driver.

dacouch

The Ombudsman has guidance notes where the policy holder puts the valuation down as to low on the proposal form. Here is the relevant note

We are likely to award the policyholder the full retail value, even if he/she inadvertently under-estimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth. And we have seen exceptional cases where a vehicle’s value genuinely rose between the date it was bought and the date of the damage/theft.

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html

However as the above poster has noted, it sounds like your father is fronting the car insurance for you which is technically fraud. If you complain about this there is a chance they may investigate the claim and discover you paid for the car (Which is one of the ways they discover fronting). You could find out that the entire claim is thrown out and your father ends up with an Insurance refusal on his record which can make it very difficult to obtain Insurance at a reasonable price again.

If you were being fronting it would be fairly easy to get this sorted out (Although it may mean a reffering it to the ombudsman which takes a long time to go through). With the element of possible fronting it makes the matter much more complicated

mattymoo

Sorry but you commute to work in it everyday and use it at weekends? When does your dad get to use it? You are the main driver of this car.

The other giveaway is the fact that you seem to be making all the calls to the underwriters / claims team. That would surely be the job of the policyholder / main driver. Their car, their policy you see. Only its not in your case is it?

financial_illiterate

If I was you I'd stay very quiet because, far from helping you out, your Dad has commited fraud, and whilst the intention to do so probably wasn't there, the intention to save money by doing so certainly was.

If you're using the car to commute (presumably daily?) and also at weekends, how can your dad conceivably be the main driver?

There are other issues; do you have SD&P cover, or SD&P and commuting cover? Because if its the former, you have no cover for the incident in any case.

Also, you'll be very lucky if your insurance company accepts that the declared value of £1,000 was a typo, rather than a deliberate attempt to bring your premium down. I know mine wouldn't.

Did you damage the signpost? Because if you did and your vehicle was identified as the cause, there'll be a claim for fixing that out there somewhere; if they track down your insurer, you'd presumably want them to deal with it.

Finally, if you've an insurance intermediary involved, I'd consider suing them; they have totally mis-sold your policy (based on what you've told us).

dacouch

Thats assuming the broker was aware of the full circumstances, its not unusual in these types of cases for people to conceal the real truth when giving the details to a broker.

If I have any of this type of business where they tell me the parent is the main user, I explain what gives it away to me and how the Insurers will use the same logic when there is a claim. I offer to quote the client on the correct basis as the only option, its not worth trying to conceal it as if it goes wrong every always blames you and besides what are the chances of a young male driver having an accident in their first year...

financial_illiterate

I agree. I'm working on the assumption that the OP is an innocent party who has been badly represented by an unscrupulous broker (e-broker, even, since he appears to have mistyped his vehicle valuation)

If I was being cynical, I'd say that by chasing the very cheapest premium possible by answering all the questions to his advantage, the OP has done himself up completely, and I'm surprised he's got as much as he has out of the insurer so far.

dacouch

They probably suspected foul play but seeing as the net payout was only £275 did not bother investigating it as it was not economical.

He could complain and get the premiums refunded when the policy is voided...

The claim from the council for the street lamp is normally quite high, I've seen a few and you would think they are gold plated judging by the price

mistryman86uk

Hi guys many thanks for your speedy replies.

Firstly i do not feel my father is fronting when he is the main driver; i work a normal 9.30-4.30 but my father uses the car for his night shift job which starts at 6pm and finishes at 4am which is a 6 day a week job 30miles away. When i meant he would help out he sold his old car to share with me. he paid for the insurance in full as he drives it more than me.
So in that respect he is in possesion of the car most of the time and spends a lot longer driving it. I am only able to drive the car on a weekend if he is at home.
The car was paid for in cash so it makes no real difference so long as he has declared he is the legal owner and we did state on the policy that it was going to be used for commuting for both of us, but i was a named driver.
I make all calls to the insurance company as my father finds the whole process tedious and would rather me deal with it, esp as he has a strong indian accent and people find it difficult to understand him. This usually entails my father giving authority for me to discuss any details with the insurers at the start of the call.
I am in no way tryin to conceal any untoward 'fraud' or fronting scheme.
Please try to understand my predicament as i feel it is genuine.

BTW the council bills for the sign etc have already been settled and i have been driving for over 2 yrs not under 1

Many thanks again for any help/advice.

Mitch.

financial_illiterate

In that case your only option is to complain via your insurer's complaints process and ultimately via the Financial Ombudsman.

I'd start gathering evidence of what you feel your vehicle should have been worth, too.

Just an observation, if casual readers of an online forum without any specific insurance knowledge suspect foul play (even though we're wrong), you can be sure as anything the insurance company do too, and you'll be required to submit actual evidence in order to convince them otherwise.

dacouch

If you want to appeal the decision then use the ombudsmans guidance I posted earlier, you will need to ask teh Insurer to correct the value, if that fails you then need to make an official complaint and only then can you go to the Ombudsman.

Bear in mind they will look into the purchase of the car especially in your case as you are saying you paid more than the value on the Insurance. They WILL ask for the the purchase receipt, if this is in your name it will cause problems. Please do not produce a dodgy receipt as they have ways of detecting these and they will try and ring and check with the vendor. They are also very likely to ask for a copy of the bank statement to show the cash was withdrawn from your dads bank account.

Good luck but please take into account the potential pitfalls