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

mikey72

Think the op would be best phoning the FOS and taking it from there.
Would be good if they could post back the outcome for future reference.

KJones78

Thanks for all your comments and advise, I've written a letter to the Diamond Quality Manager and will see what happens, this is what the FOS advise is first step, I'll post the outcome for your reference.

raskazz

mikey72 wrote: »

Of course the risk has passed.

In light of the Limitation Acts, why on Earth would the risk be 'passed'?

alanfp

Originally Posted by dacouch 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.


I think, dacouch, you have confused the issue here of whether the risk has passed by saying that the insurer CARRIED a risk. If he carried it (past tense) then the risk clearly has passed. If you're saying that it hasn't fully passed because someone could come out of the woodwork and make a claim after the end of the period of insurance, I can't disagree with you on this technicality.

That aside, in your previous (genuinely helpful) post explaining the ins and outs of types of non-disclosure you seem to have missed the point that the OP did disclose the full information - it was the insurer who made the mistake (they do sometimes, you know ) and that is why the OP is upset.

You're clearly very knowledgeable in this area - you don't work for an insurance company by any chance?

alanfp

dacouch - you don't work for an insurance company by any chance?

As it's gone very quiet, I guess we've got the answer to that question.

dunstonh

I dont work for an insurance company and I agree with him. They took on a risk and should be paid for that risk. If there is wrong information that leads to the price being quoted wrong then they are entitled to ask for the money that should have been paid. That is the standard. You dont just pay it if you have a claim.

Often it is possible to avoid it. Such as making sure you renew with a different insurer next time and use the right data from that point forward. The chances of the old insurer finding out are remote and you effectively get away with it then. Its not being ethical but its not breaking any laws.

alanfp

Hi DunstonH

Thanks for your frank reply.
But I think you (as well as dacouch) have forgotten that it was the insurer who made the mistake! This is NOT a case of non-disclosure.

My other point about insurers refusing to pay out (rather than requesting backdated premium) was highlighted again a week or two ago in the national press, with a couple who had a problem with their home insurance. They inadvertently signed up to not leaving their property empty for 30 days, but actually left it unattended for a little while longer (can't remember now, might have been 50 days or something). Insurer is refusing to pay the claim. Or is car insurance dealt with differently from home insurance? Perhaps you could answer that for us. (or Dacouch could, of course).

dunstonh

But I think you (as well as dacouch) have forgotten that it was the insurer who made the mistake! This is NOT a case of non-disclosure.

I just looked at post #1 again and it says the OP made the mistake of non-disclosure.

If it was an error by the insurer (as in knowing the risk but offering a wrong price) then I would agree with you. However, where the policyholder is wrong, the price offered was not for the right risk then the insurer is within their right to ask for it.

My other point about insurers refusing to pay out (rather than requesting backdated premium) was highlighted again a week or two ago in the national press, with a couple who had a problem with their home insurance. They inadvertently signed up to not leaving their property empty for 30 days, but actually left it unattended for a little while longer (can't remember now, might have been 50 days or something). Insurer is refusing to pay the claim. Or is car insurance dealt with differently from home insurance? Perhaps you could answer that for us. (or Dacouch could, of course).

This is clearly a case that the FOS non disclosure rules should apply. In this case, if the insurer are not playing ball a complaint went to the FOS I would expect the FOS to decide if it was deliberate or accidental. i.e. were they trying it on to save money in premiums (as empty properties cost more) or it was an accidental error. If deliberate, the claim should not be paid. If accidental, then the claim should be paid, if the insurer would have offered cover in the first place on that basis with the extra premium, if any, deducted from the claim payout (or refund premiums if they wouldnt have offered cover)

vaio

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"

Just a thought……..

If I innocently fail to declare an accident when making a proposal to an insurance company AND that mistake induces them to offer me cover when, if I had declared it, they would not have offered cover then when that mistake is discovered the contract is void from inception and all premiums are returned to me.

(Fair enough as I think legally a contract based on a mistake is no contract)

Turn it around, not unreasonable as contracts are (or should be) two way things……..

If an insurance company innocently fails to take into account a declared accident when making an offer to me AND that mistake induces me to take out cover when, if they had taken the accident into account, it would have generated a premium that I would have not accepted then, when that mistake is discovered surely the contract is also void from inception and all premiums should be returned.

dacouch

alanfp wrote: »

Hi DunstonH

Thanks for your frank reply.
But I think you (as well as dacouch) have forgotten that it was the insurer who made the mistake! This is NOT a case of non-disclosure.

My other point about insurers refusing to pay out (rather than requesting backdated premium) was highlighted again a week or two ago in the national press, with a couple who had a problem with their home insurance. They inadvertently signed up to not leaving their property empty for 30 days, but actually left it unattended for a little while longer (can't remember now, might have been 50 days or something). Insurer is refusing to pay the claim. Or is car insurance dealt with differently from home insurance? Perhaps you could answer that for us. (or Dacouch could, of course).

If you read the OP again, they state that they are "Sure" they told the Insurer the information last year. I suspect they are mistaken, what gives it away is the accident they refer to was in 2008 hence the Insurer back dating the additional premium to renewal 2008. If they had declared the accident at last renewal (Dec 2009) they would have had a back dated premium to pay for that period. Obviously they could have rung and the person they spoke to had not actioned it correctly. However it would not explain how the incident was not declared in 2008.

With regard to your example in the newspapers, leaving a home unoccupied is a very significant risk to Insurers. They typically impose a limit of 30 days and ask a specific question about this along with having the exclusion in cover spelt out clearly in the policy wording

The person in the newspaper will have "Inadvertently" non disclosed but the Insurer almost certainly would not have accepted them as a customer had they declared the correct information as very very few companies would accept a customer who leaves there home unoccupied for in excess of 30 days. Thus when the Insurer looks at the correct information and rewrites the policy on the basis it should have been on if they had been aware of the correct information they discover they would not have covered the person so the policy is declared void.

It is a different situation to the OP as they had a claim which the Insurer would have accepted had they been aware hence the back dated premium