Car Insurance-didn't advise of previous claim and now charge being backdated

Quentin

alanfp wrote: »

I suggest you just ignore their request (or invite them to sue you...we all know what would happen in that case - nothing).

Ignore this advice.

If you take it, and ignore their request for the money you owe them, then it is inevitable that they will cancel your policy (as well as pursue you for the money).

As already advised if you end up with a cancelled policy on your record then the consequences will be much worse for you, (you have to declare this for ever, and will have to resort to expensive specialist insurers who take on such clients who cannot get any insurance elsewhere).

PNPSUKNET

Unless their is a genuine complaint dont waste the fos time, or your furture higher insurance premiums. When everyone goes to the fos how do you think its funded and where do the companys get it back from....

dacouch

Alan it is fairly simple, Insurance is based on the principle of "Utmost Faith", you tell the Insurance the truth so that they can accurately price up the risk of a claim (They have similarities with Bookmakers pricing up odds), the Insurer in return agrees to pay claims that are covered under the wording of the contract (Policy).

If you do not declare some information, the Insurer will investigate why you did not declare the information (They will normally ask you for a written explanation). If you "Deliberately" or "Fraudulently" with held / declared the wrong information then the Insurer can declare the contract (Policy) null and void. This is probably how the case involving the smoker was dealt with as not declaring you are a smoker when applying for life cover would normally fall into the above hence her claim not being paid.

You also have "Inadvertent" which is basically they miss understood the questions / the questions were not clear / the person who sold the policy did not ask all the relevant questions etc. If this happens the Insurer would normally have to see if they would have offered cover had they been aware of the true facts, if so would it have changed the premium or cover terms. If so they would handle the claim and the policy holder would pay an extra premium or increased excess etc. This is probably how the OP's claim would have been dealt with.

You also have "Innocent" which is basically the questions the Insurer asked were very unspecific etc for instance a policyholder not declaring they are an Axe Murderer. This might be classed as innocent if the Insurer did not ask about convictions. In these circumstances the Insurer would have to deal with the claim.

You also have "Clearly Reckless" which is similar to "Deliberate" but the policyholder has not deliberately with held the information but the information they have not declared would be obvious to a reasonable person eg they had just got their licence back after a driving ban shortly after taking the Insurance out. It could also apply if they have made no regard to accuracy when completing the application form.

Here is a more detailed explanation from the Ombudsman on this matter http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-ins-nondisclosure.htm

dunstonh

I've done some research and am writing an official complaint letter to the insurer and can then after 8wks pursue with the financial ombudsmen-I just wondered if anyone has come across anything similar and know if I have a case or not? They are now chasing me for owed money!

The facts are covered on this thread already by some but there is also some misinformation as well

1 - Technically you do owe them the money. What you should have done when you realised your error is not tell them but insure your vehicle elsewhere giving the correct information. You would have got away with it then. However, by admitting your mistake and telling them you owe them the money.

2 - As you owe them the money, there is no point complaining to the FOS as you are in the wrong. The FOS have published guidelines on non-disclosure. So, as long as the company are following those (which they are) then a complaint will likely be rejected

3 - A claim would be paid out if it was deemed your non-disclosure was accidental and the insurer would have covered you at the time. Any missing premium would have to be paid. They could not reject your claim unless a) your non-disclosure was intentional or b) they wouldnt have offered cover had they been aware of the facts. Again, this follows the FOS guidelines.

The guidlines published by the FOS are here: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-ins-nondisclosure.htm

if you dont pay the money and cannot persuade them under goodwill to perhaps reduce it then ultimately they can treat it as a bad debt and you face the consequences of that. The bottom line is that this is your error and they insurer is acting correctly.

edit: started my post before dacouch posted the reply above. However, he beat me too it. Hence the duplication in some of the information. Sorry about that but the Bacon sandwiches for lunch were too nice to put aside to complete the post quickly

mikey72

I think both of the above show there are enough cases where a claim would have resulted in cancellation of the policy, not a request for an extra payment though, and they deal with the current year only. As for a backdated payment, ring the FOS and get advice over the phone. It'll cost nothing, and give you a good idea of how to respond.

melb

I wish i had the same faith in insurers' integrity when actually paying out for what we insure against or for in the first place as some of the posters on here who think they would pay out for the claim and then claim back what further premiums would be payable. Have you not seen the numerous cases on Watchdog and the like where insurers refuse to pay out on holiday insurance where they refuse to cover costs and also insurance which pays out - or rather doesn't - when you lose your job. If they put half the effort into helping those that need to claim after years of paying premiums that they do into trying to find ways of not paying they would have a far better reputation. We had a car stolen and the insurers wriggled and wriggled for 18 months to try and get out of paying out the grand sum of £1000 using excuse after excuse until i wrote to the CEO and received a cheque after 4 days.

TSx

melb wrote: »

I wish i had the same faith in insurers' integrity when actually paying out for what we insure against or for in the first place as some of the posters on here who think they would pay out for the claim and then claim back what further premiums would be payable. Have you not seen the numerous cases on Watchdog and the like where insurers refuse to pay out on holiday insurance where they refuse to cover costs and also insurance which pays out - or rather doesn't - when you lose your job. If they put half the effort into helping those that need to claim after years of paying premiums that they do into trying to find ways of not paying they would have a far better reputation. We had a car stolen and the insurers wriggled and wriggled for 18 months to try and get out of paying out the grand sum of £1000 using excuse after excuse until i wrote to the CEO and received a cheque after 4 days.

It depends on the insurer I guess. I work for one who still use UK call centres, aren't involved in the 'race to the bottom' for premiums and who seem to treat their customers fairly. My experiences are purely based on handling claims for them. I come across claims every so often where there are undisclosed claims (for whatever reason) - when that happens, we check the underwriting criteria for that scheme - if the scheme would have accepted the policyholder, then we process the claim and update our records so next years premium will be possibly increased. If we would not have accepted the policyholder, we refer it and 9 times out of 10, it comes back saying "proceed, subject to taking an additional premium of x".

The industry is very fair towards the consumer by law, in general, but I'm sure that some insurers are a bit more unscrupulous. Unfortunately, cheap is usually good, until it comes to making a claim.

dunstonh

I wish i had the same faith in insurers' integrity when actually paying out for what we insure against or for in the first place as some of the posters on here who think they would pay out for the claim and then claim back what further premiums would be payable.

The bottom line is that the FOS has set the guidelines. If the insurer doesnt follow them then you complain to the FOS who will check to see if they have been followed.

Have you not seen the numerous cases on Watchdog and the like where insurers refuse to pay out on holiday insurance where they refuse to cover costs and also insurance which pays out - or rather doesn't - when you lose your job.

Watchdog is a joke. They pick up minority cases and sensationalise it to make it appear its the norm.

If they put half the effort into helping those that need to claim after years of paying premiums that they do into trying to find ways of not paying they would have a far better reputation.

The problem is that it has become adversarial on both sides. They suffer massive consumer fraud and a general public where the majority feel its ok to defraud the insurance company. So, they react back to that by looking at claims with the view that there is a pretty good chance you are trying it on. I'm not saying its right to be like that but if they accepted everyone at face value they would go bust. Personally, i don't know a solution to it. Perhaps banning no win, no fee claims companies would be a start and making the consequences for fraudulent claims higher whilst making the fines for bad claims handling by the insurer higher. i.e. hit both sides hard where there is wrong doing and let the genuine people benefit from the improvements.

withabix

Did you have a claim on 2009 or 2008 policy?

I'm not sure that the ombudsman WOULD find in the insurer's favour for anything other than THIS year's premium IF no claim was made in the previous years, because the 'risk has passed' and the insurer cannot prove actual loss for that period.

Personally I think they are just trying to maximise their profits.

dacouch

withabix wrote: »

Did you have a claim on 2009 or 2008 policy?

I'm not sure that the ombudsman WOULD find in the insurer's favour for anything other than THIS year's premium IF no claim was made in the previous years, because the 'risk has passed' and the insurer cannot prove actual loss for that period.

Personally I think they are just trying to maximise their profits.

The risk has not passed, just because there were no claims, the Insurer still carried an increased risk of a claim hence why they are requesting the premium for the current year and back dated.

As stated by previous posters and by the Ombudsman in the link provided the Insurer is entitled to recalculate the premiums that should have been paid (Assuming it was not classed as an innocent non disclosure). This would also have happened if there had been a claim and the Insurers discovered the non disclosure (Assuming it was not classed as fraudulent/deliberate or reckless non disclosure.