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

mikey72

dunstonh wrote: »

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.

Imposing a penalty for insurers that refer customers to claim management companies, and selling details onto personal injury lawyers as well.
It would be far better if claims were handled in house again, and insurers didn't try to take a commission on it instead.

ranger1066

melb wrote: »

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.

But if you pay attention, the person has always magically forgotten they suffer from some illness, so if you lie (sorry forgot you are ill) why should they pay out?

mikey72

dacouch wrote: »

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.

Of course the risk has passed.
As stated in the previous link the calculation only applies for the current period, where there is still risk.
In fact, in no claim was made, with hindsight if no claim was made you could argue there was no risk at all equally as well.

Quentin

mikey72 wrote: »

Of course the risk has passed.....

Why so aggressive?

And you know the risk hasn't "passed" at all!

ranger1066

TSx wrote: »

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.

I also work for a insurance company, and to be honest the only policies I have seen voided from inception, are the ones where customers have either been prosecuted for drink driving and not declared it, had multiple (in excess of 5 claims in 2 years) or not actually in possession of a licence. In the majority of claims where the customer has 'forgotten' they had a claim or got a minor motoring conviction, they are asked for the back-dated AP, before the customer receives any payout.

The company I work for uses the CUE (Claims Underwriters Exchange) system, which informs us of any previous claims logged against a customer from other insurers that use this system. So before you lie, sorry I mean 'forget' you had a crash or went 40 in a 30 and got points on your licence, the chances are this will show up if you make a claim.

dacouch

ranger1066 wrote: »

The company I work for uses the CUE (Claims Underwriters Exchange) system, which informs us of any previous claims logged against a customer from other insurers that use this system. So before you lie, sorry I mean 'forget' you had a crash or went 40 in a 30 and got points on your licence, the chances are this will show up if you make a claim.

Just to clarify for any readers CUE does not check if you have convictions, for an Insurer to be able to access this information they would either have to subscribe to the DVLA to be able to check, request a copy of your driving licence or contact the DVLA with you on a conference call to give your authority or obviously you tell them

lisyloo

Imposing a penalty for insurers that refer customers to claim management companies, and selling details onto personal injury lawyers as well.
It would be far better if claims were handled in house again, and insurers didn't try to take a commission on it instead.

Don't claims management companies also deal with uninsured losses?
In which case that part cannot be handled "in house" if the customer does not have the uninsured loss recovery policy and even then they generally claim things back and don't always provide a car up front.

Please correct me if I'm wrong.

dacouch

mikey72 wrote: »

Of course the risk has passed.
As stated in the previous link the calculation only applies for the current period, where there is still risk.
In fact, in no claim was made, with hindsight if no claim was made you could argue there was no risk at all equally as well.

"Where there has been inadvertent non-disclosure or misrepresentation, we expect insurers to rewrite the insurance. This should be done on the terms they would originally have offered if they had been aware of all the information. In some cases this may result in a proportionate payment; in others it may result in no payment at all. This is because the inadvertently-withheld information would, if disclosed, have led to the firm declining the application altogether"

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

The above is assuming it is classed as an "Inadvertent" non disclosure, if the non disclosure was at the inception of the policy then any difference in premium / terms would apply from the inception of the policy. If it was for instance a conviction or accident that happened mid way through the policy it would either apply from the date of the incident or next relevant renewal date that they would "rewrite" the policy eg apply terms and / or difference in premium

mikey72

dacouch wrote: »

"Where there has been inadvertent non-disclosure or misrepresentation, we expect insurers to rewrite the insurance. This should be done on the terms they would originally have offered if they had been aware of all the information. In some cases this may result in a proportionate payment; in others it may result in no payment at all. This is because the inadvertently-withheld information would, if disclosed, have led to the firm declining the application altogether"

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

The above is assuming it is classed as an "Inadvertent" non disclosure, if the non disclosure was at the inception of the policy then any difference in premium / terms would apply from the inception of the policy. If it was for instance a conviction or accident that happened mid way through the policy it would either apply from the date of the incident or next relevant renewal date that they would "rewrite" the policy eg apply terms and / or difference in premium

I think you're agreeing with me?
It only applies to a current policy.

dacouch

mikey72 wrote: »

I think you're agreeing with me?
It only applies to a current policy.

Not at all.

This is the relevant wording "we expect insurers to rewrite the insurance. This should be done on the terms they would originally have offered if they had been aware of all the information"

So they in effect rewrite the policy and premium (If appropriate) from inception or from when the information was not declared. Any difference in premium would be due to the Insurer.

The ombudsman is basically saying the policyholder mistakenly did not declare some information that was relevant to the policy. However as it was a mistake they can benefit from the cover however in return the Insurer can rewrite the contract from when the information should have been declared on the terms / premium they would have charged had the information been declared at the write time. This ensures it is fair for both the customer who is covered by the policy in the way they would have been done had they given the correct information and it's fair to the Insurer as they apply any terms they would have applied and collect premiums they would have (Assuming they would have altered these) from when the information should have been declared. It means the system is fair for both parties