Car insurance and floods

sense_2

Evening

my friend recently lost his car in the floods in cumbria the insurance company is saying that he needs to pay his premium in full or have the outstanding amount deducted from his payout he was paying by direct debit by the time they have deducted the outstanding amount he will be left with virtually nothing
Can they do this?

he has also bought a replacement vehicle a van which they now say they will not cover can they also do this?

lisyloo

Yes and yes.
When he was paying by DD it was a loan as the full amount it due up front. It's not "pay as you go".

The insurer don't have to insure vans either if they don't want to.

It would have been sensible to check this out before purchasing the van.

dacouch

It is common amongst Insurers to either deduct the balance of the instalments from the claims settlement or require the remaining instalments.

You may find this helpful

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

17. outstanding premium instalments or premium refunds

Usually the policy is a yearly contract and the full premium is payable even if the vehicle is written-off during the year. If the policyholder paid the yearly premium up-front, no refund is due. If the policyholder was paying the yearly premium by monthly instalments, the outstanding instalments are still payable.

sense_2

thanks folks I will pass the info on