Car insurance and cat D

dacouch

There are a few companies that will not accept cars that have been previously written off.

vaio

Just as there a few (quite a lot actually) companies that won’t quote for my S4.

Presumably the companies that don’t want cat c & d on their books check the write off database before quoting as policy holder might not know so asking is pointless

dacouch

I don't believe all of them check on the databases, they tend to rely on a question as to whether the car has previously been written off or on listing a series of assumptions about the quote that declares the car has not previously been written off.

The situation will probably change when they new rules on non disclosure come into affect.

vaio

Is this widespread because I don't remember being asked by any of the companies I've ever used or any of the price comparison sites.

If they do ask how does it work if the policy holder unknowingly gives an untrue answer?

ellives

My research suggests mixed messages...

Some sources say inform your insurance company BUT not one of the on-line companies asked any form of question regarding this?

They don't ask but doubtless they'll not cover you if you fail to tell them.

More Than have informed they will not - or at least that's the reply I received.

Confused?

dacouch

vaio wrote: »

Is this widespread because I don't remember being asked by any of the companies I've ever used or any of the price comparison sites.

If they do ask how does it work if the policy holder unknowingly gives an untrue answer?

If they unknowingly do not declare it to an Insurer who do not like written off cars then the standard procedure for non disclosure would apply (You can view these here) http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

The system is changing shortly though so these will change slightly.

Swiftcover certainly don't accept customers whose vehicles are written off, it is contained in their quotes although a lot of people will probably miss it. Although interestingly we had a Swift customer whose claim was denied and policy cancelled when they discovered it was a Cat D. He took advice on the Insurance forum and Swift have now backed down and agreed to pay the claim although on the face of it they could have probably not paid the claim

scheming_gypsy

i've had a cat D, didn't mention it to the insurance as they didn't ask but they had the reg number which told them everything they needed to about the car. When the car got hit and written off (again) they just paid out less because it was worth less.

vaio

dacouch wrote: »

If they unknowingly do not declare it to an Insurer who do not like written off cars then the standard procedure for non disclosure would apply (You can view these here) http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

The system is changing shortly though so these will change slightly……

Nice link, reading it it seems to say that the FSO expects companies to follow best industry practice and then goes on to quote the ABI which says…..

“……. that insurers should ask clear questions about facts they considered material. In deciding whether to avoid a policy, insurers should rely only on the answers given or withheld. They should also only avoid policies where the non-disclosure or misrepresentation was deliberate or reckless, not where it was innocent. The ABI made it clear that customers were required to answer questions only to the best of their knowledge and belief…..”

It then goes on to consider innocent misrepresentation……

“[FONT=&quot]innocent[/FONT]
Customers act in good faith if their non-disclosure is made innocently. This may happen because the question is unclear or ambiguous, or because the relevant information is not something that they should reasonably know. In these cases, the insurer will not be able to ‘avoid’ the contract and (subject to the policy terms and conditions) should pay the claim in full.........”

I’d say that it covers it nicely, the only people likely to get claims turned down are those who do get asked and who deliberately tell lies. Which in my mind is the way it should be.

dacouch wrote: »

…….Swiftcover certainly don't accept customers whose vehicles are written off, it is contained in their quotes although a lot of people will probably miss it. Although interestingly we had a Swift customer whose claim was denied and policy cancelled when they discovered it was a Cat D. He took advice on the Insurance forum and Swift have now backed down and agreed to pay the claim although on the face of it they could have probably not paid the claim

Hmm, swiftcover altruistically paying out claims they don’t have to?

I’d have said that more likely was swiftcover trying to avoid paying and then backing down when they realised that if they didn’t pay the policyholder would go to the FSO (and almost certainly win)

dacouch

Non Disclosure currently works on the basis that assuming the non disclosure was not intentional and / or the question was not clear then the claim will be paid. However assuming the previous are true but the Insurer would not have accepted the client had they been aware of the correct information when the policy was applied for then they can still avoid the policy and deny the claim.

For instance if you had a drink driving conviction and did not declare it, assuming the non disclosure was not intentional and / or the question the Insurer asked was not clear they can deny the claim if they would not have accepted you as a client had you declared the drink drive conviction.

See the passage in the link on Inducement which covers this.

The rules are changing shortly which basically mean the inducement part will not apply so providing it was unintentional and / or the question was missleading then the claim will be paid.

For the record here is the relevant part from the Swift website (Click on the link "What we can't cover") https://secure.swiftcover.com/esales/products/esalesloop.aspx?action=init&productid=1&processid=1 They also make a clearer statement further on after you are going through the purchase process

I don't believe the person would have beaten Swift Cover had they gone to the Ombudsman as assuming the Swiftcover had clear warnings on their website about not accepting previously written off vehicles on their website at the time the person bought their cover then Swift would be entitled to deny the claim and void the policy irrespective of whether the non disclosure was unintentional or not

vaio

Nah, the FOS site is absolutely clear about the three stages need to deny a claim and the inducement stage is only considered if the preceeding “clear question” stage is passed.

If the insurer doesn’t ask a clear question then inducement doesn’t come into it and claims must be paid as normal, from your link……
[FONT=&quot]
“the Financial Ombudsman Service approach[/FONT]
[FONT=&quot]
Taking account of the law and good industry practice, we approach non-disclosure/misrepresentation cases in three stages. We summarise these three stages below, before describing each one in a little more detail.[/FONT]
[FONT=&quot]
1. [/FONT][FONT=&quot]When the customer sought insurance, did the insurer ask a clear question about the matter which is now under dispute?[/FONT]
[FONT=&quot]
2. Did the answer to that clear question induce the insurer; that is, did it influence the insurer’s decision to enter into the contract at all, or to do so under terms and conditions that it otherwise would not have accepted?[/FONT]
[FONT=&quot]
3. Only if the answers to both (1) and (2) are ‘yes’, do we go on to consider whether the customer’s misrepresentation was an honest mistake, a dishonest attempt to mislead or due to some degree of negligence……….”[/FONT]

The way I read it if the “clear question” and “inducement” stages are passed then the nature of the misrepresentation is considered ie, the proposers state of mind is considered and they give four possibilities…..

The first two are “deliberate” and “reckless”. In both these the claim can be avoided and the company get to keep the premium.

The third is “innocent” (which I’d argue covers me insuring a car which was a cat d but I didn’t know) and the claim would have to be paid as normal

The last possibility listed is “inadvertent” which is incomplete or careless answers when the proposer could have answered fully. In this case the company would be required to rewrite the policy on the full information. This could result in an increased premium or it could be that they would have declined the risk in which case the claim can be denied but the premium gets refunded.