Will this affect credit rating?

Gti

If car insurance payments were set to come out of my account but the insurance was actually in somebody elses name and payments weren't kept up (e.g insurers tried to take money that wasn't in the account) who would recieve the black mark on their credit score, the account holder or the policy taker?

amiehall

It depends. If the bank authorised the payment and the bank account went into unauthorised overdraft, only the bank account holder would be affected. Quite often this will be what your bank will do and it's normally better for you than the other option. They can also decline the DD payment, often bill you for the privileged, possibly push you into unauthorised OD with this charge and mark your record. Also the insurance company would not have been paid and they will mark the record of the person with the policy.

pipsi_2

Depending on the insurance company i would think they would just cancel the policy if payments weren't kept up as opposed to putting a 'black' mark against the person who held the policy. Payments are usually paid in advance of the period for which cover is needed therefore if a payment isn't made they can cancel the policy straight away and nothing is owed. However i would think the insurance company would offer some sort of grace period to allow a payment to be paid and then if it became a month overdue, they would then cancel the policy.

also worth noting, if a payment hasn't been met then it could be that the person who is named on the policy is driving around without insurance, i would check this out as a matter of urgency.

Hannah_10

I've been in this situation. I was the person with the insurance policy and someone else was paying it. The marks went on my file. As to if they went on his file too I don't know and can't now ask.

DarkConvict

1 Late/no payment = little black mark
Several Late/no payment = black mark
Default = big black mark
CCJ = huge black mark
Bankruptcy/Insolvency actions = catastrophic black mark

If the payment is not missed, then there is no black mark on the account(insurance) holders credit report.
If a payment is missed on an insurance policy, then the account(insurance) holder get a late/no payment marker. With insurance what tends to happen is if you miss a payment then they cancel your privilege to pay by instalments and will ask for the remainder to be paid within 30 days. If this goes unpaid then the account(insurance) holder will get a default on there credit file, and no longer be insured as the policy has been breached and thus ended in favour of the insurance company.
If the debt is not paid off then it tends to goto collections/DCAs, and potentially a CCJ.
These marks all go against the person who is liable to pay the debt (person named as the account holder on the insurance policy), not who is paying it.

Now onto the other side. Who is paying. What happens depends on if the DD is active, the balance of the account, and how the bank treats the DD when there are not enough funds.

If the person paying the insurance, cancels the DD so no money is taken out, the account (bank) holder is unaffected.

If they do not cancel and the money comes out as normal, and they are in good standing (authorised overdraft/in credit) then account (bank) holder is unaffected.

If again the DD is not cancelled but there is insufficient money in the account (overdraft would be exceeded), the bank may or may not pay the direct debit, each case i believe this decision is done by hand. Either way the bank account holder will be charged for them dealing with this whether they pay it or not. The charge will then push them into the unauthorised overdraft and account (bank) holder may receive a late payment marker as well as a warning to get out of the unauthorised overdraft. As well as suffering all the fees attached to been in an unauthorised overdraft.

If payment is made then they are simply further into the unauthorised overdraft, no additional black marks. The account(insurance) holder will not get a black mark as payment was made ontime.
If payment is not made, again no further black marks other than going into it, but because payment is not made the account(insurance) holder will get a late payment marker as the insurance went unpaid.

For the most part that will be that. However in what is in reality unrelated to the insurance (its just an outgoing payment really), if the unauthorised overdraft is not bad off, then obviously charges increase and black marks are left monthly until it is corrected. It highly likely if it goes uncorrected the bank will consider the account in default and place that on the credit file. It then ends up like other ordinary debts, Collections/DCAs court action etc.

You just need to consider them as been separate accounts. Insurance companies place marks if payment is not made, and banks do it if you go into your unauthorised overdraft (or fail to make agreed payments on money going into the account (i.e. £xxx a month) even if you carry on using the OD). That bit all depends on the T&Cs and arrangements the bank has with the bank account holder.