Car insurance comp backdating charges from 2 years ago.

Gav123_2

Hi, I've had a look on the site for something similar to the issue I have and can't find anything so I'm hoping that someone here can give me some advice.

I've been with the same car insurance company for the last 5 or 6 years. Usually they just send me a letter with my new quote saying they will take the money from my account on the said date unless I dont want it, in which case, I have to call them to cancel. When I got my latest quote through the post it was a lot higher than usual, thus I decided to have a look about, taking Mr Lewis' advice and using multiple insurance comparison sites. When I found it cheaper I called my insurance provider to cancel and as expected they said they would match the other company's quote. The problem being that when I had used the comparison sites, I obviously told them the truth in that I had 3 penalty points from 2 years ago for a speeding offence. My insurance company didn't know about this because I hadn't told them. I understand that I should have but with the process they use for renewal where no contact is needed, it totally slipped my mind. Now they are asking for £300 for the 2 years I was with them since the speeding offence. My insurance only costs about £300/yr as it is so by my calculation they are telling me that it would have cost £450 for each of the last two years yet this year it's still only £300. I asked what would happen if I just took my insurance with someone else and they said that they would send letters and eventually debt collectors to collect the money that they think they are owed from me.

I obviously have no choice but to pay but the problems I have are

1. If I had claimed in the last 2 years for anything, I'm pretty sure they would have done everything not to pay as my insurance would've been void from not having told them about the penalty points.

2. How do they calculate how much I owe them? Could they have said, well Sir, you owe us £2000 from the previous 2 years? If I had told them about the offence 2 years ago and if they told me that my premium was going to be 50% more, I would've taken my insurance with someone else.

I'd like to point out that I didn't withhold this information on purpose and it seems like they have the power to charge what they want for cover that in effect they didn't provide in the first place.

If anyone else has experienced this I would like to know how they dealt with it and if there is anything I can do.

Regards
Gav123

dacouch

If you had a claim you would have expected the Insurers to pay a claim and they would have had to pay a claim.

Insurance law works on the basis that providing the non disclosure of the conviction was not intentional and the Insurer would have offered cover had they known about the non disclosed conviction then they have to deal with the claim. They would have requested the extra payment before they would have dealt with the claim.

They cannot just pick a figure out of the air, they have to charge you what they would have charged had they known about the conviction. Some companies do however raise an administration charge for the extra work the matter has caused.

Had you declared the conviction at renewal there is a good chance you may have been able to negoiate cheaper renewal premiums including the conviction but obviously the chance to do this has now gone.

If you look through MSE there are plenty of posts from people who have had claims and the non disclosed convictions have been discovered. There claims were either dealt or not dealt with depending on whether the Insurer would have accepted the business had they been aware of the conviction and the non disclosure was not intentional

raskazz

Gav123 wrote: »

1. If I had claimed in the last 2 years for anything, I'm pretty sure they would have done everything not to pay as my insurance would've been void from not having told them about the penalty points.

No. Where the reason for the non-disclosure is inadvertent (which it is here on the face of it) then where the insurer would have accepted the business at different premiums/terms then they must deal with the claim according to the premium/terms which they would have charged had the facts been disclosed correctly.

Gav123 wrote: »

2. How do they calculate how much I owe them? Could they have said, well Sir, you owe us £2000 from the previous 2 years? If I had told them about the offence 2 years ago and if they told me that my premium was going to be 50% more, I would've taken my insurance with someone else.

They will work from the relevant underwriting guides which they used at the time. For convictions there is usually a 'demerit' system where 'points' are calculated according to the offence code, the date of conviction and the points/fine received. Then there are different premium loadings for different points totals. If you did raise a complaint and it went to the Ombudsman then the insurer would provide the relevant guides to verify that its calculations were correct.

Gav123 wrote: »

I'd like to point out that I didn't withhold this information on purpose and it seems like they have the power to charge what they want for cover that in effect they didn't provide in the first place.

It's not a question of 'withholding' the facts - it is a question of not disclosing the facts, which - as the renewal notices would have pointed out - was a requirement of the contract. You can complain if you wish, not sure how far you will get though.

dunstonh

1. If I had claimed in the last 2 years for anything, I'm pretty sure they would have done everything not to pay as my insurance would've been void from not having told them about the penalty points.

As said already, there is a process in place for non-disclosure and inadvertant non disclosure would not result in a rejection if they would have accepted it from the start (albeit with a higher premium).

The FOS publish exactly what they would expect to see. So, things are pretty well clear in this area now apart from perhaps the decision over it was intentional or inadvertant.

2. How do they calculate how much I owe them? Could they have said, well Sir, you owe us £2000 from the previous 2 years? If I had told them about the offence 2 years ago and if they told me that my premium was going to be 50% more, I would've taken my insurance with someone else.

They charge you what you should have paid had you had insurance with them. It doesnt matter that you may have shopped around. You gave them incorrect information and the fault is with you.

I'd like to point out that I didn't withhold this information on purpose and it seems like they have the power to charge what they want for cover that in effect they didn't provide in the first place.

They dont have the power to charge whatever they want. Just what they would have charged in the first place. That is the ruling set by the ombudsman.

If anyone else has experienced this I would like to know how they dealt with it and if there is anything I can do.

If you dont pay, they can record it as an unpaid debt and pass if on for debt collection. Typically that means going to small claims court and wrecking your credit record in the process. You may also have to declare that a previous insurer has adjusted its terms due to non-disclosure and that could have an impact on future insurance premiums you pay.

Gav123_2

I appreciate all your advice and comments. It has cleared things up for me. I do admit that it was my own fault and I will be paying the charges. I still find it difficult to believe that my insurance premium would have been 50% higher for the last two years yet this year it's the cheapest it's ever been. They told me what the charges were for each year and I would have understood if it was 50% more for the first year, then 25% and now back to normal but this wasn't the case. Obviously they have a system for calculating this charge but it doesn't seem to make sense (Perhaps there was some charge for not disclosing the details earlier but if there was they never mentioned it.) Well, I've certainly learned from this experience and will make sure my details are up to date in the future. Thanks again to everyone who posted.