Car Insurance query on Remaining Insurance Premium when claim for total loss car

carcrashsam

Needing advice - This thread is specifically to discuss the car insurance policy terms and conditions by Insurance companies.

Basically my car has been declared a total loss.
My Insurance was done so I could make monthly payments - but due to the accident a settlemet is to be done by the Insurance company Elephant.

They have the:
Market Value £
Less Excess £
Less Remaining Insurance Premium £
Settlement figure £

they have not only deducted the excess from the Market value but also the remaining insurance premium.

Surely, if your insurance is cancelled and you have made payments till that point thats that? Are they allowed to still claw the remaining months amount payable even though you have cancelled your insurance??

Can anyone please advise on this as I am totally confused.
Thanks

bouncydog1

Motor insurance is usually offered on the basis of an annual contract and insurers offer a facility to pay monthly - however in the event of a claim the insurers are entitled to receive the balance of any outstanding premium for the year.

The exception to this would be if you purchased cover for say one month only in which case you would pay a premium based on short period rates and would be required to pay the whole amount in advance.

Anihilator

Yes they are.

insurance is an annual contract and repayable in full. Insurance can be cancelled with fees payable however if a claim is made it becomes payable in full for the year.

Some insurers will allow you to continue the policy on a new car.

spark_deals

Hi Sam,
WELCOME to the forum.
In my opinion, you buy an annual insurance and take a loan from the insurance provider's chosen lender which spreads the cost to monthly instalments. In any case, claim or no claim, you are support to honour your loan contract. Isn't it?
Also, there are pay as you go policies, where you pay by month, insurance company sends you a new certificate of insurance every month.(eg. Ecar insurance) and you stop paying once you claim on PAYG policy, not the annual policy.

Hope this helps.

dunstonh

Surely, if your insurance is cancelled and you have made payments till that point thats that?

No. You are assuming car insurance is pay as you go. It isnt. it is an annual contract where you pay once a year to cover any event in the next 12 months. If you pay monthly, this means you have arranged a credit agreement where the insurer is paid but you owe the money under the credit agreement.

If you make a claim, you have used the policy for what it is intended for. Therefore no refund is made.

Are they allowed to still claw the remaining months amount payable even though you have cancelled your insurance??

Yes.

However, many, if not most, will allow you to transfer the insurance to your replacement car. Its only in total loss situations where you dont get a replacement car where you tend to lose out.

iamana1ias

carcrashsam wrote: »

Needing advice -

There is a search function on this site. Had you used it you would have saved these posters from answering a question which gets asked every single day.