Insurance backdated payment

jackson2_2

Hi need some advice. My son got his renewal for his car insurance, and called Admiral his supplier to check prices for the new term. During the previous year he got 3 points on his licence for using his mobile phone, but when his insurance renewed last year my son was not in the county for 3 months. so it renewed at normal price. He forgot to tell them about the points and just declared it this year.
They told him that the price for the coming year would go up from £600 to £800 and then he would also need to pay £218 for last year because of the points. My son then said he would shop around as he felt that the insurance was a bit expensive. (he is 27 years old) with 4 years no claims bonus). Admiral said that whether he took this years or not he would still be liable for the £218 for last year. And if he didnt pay they would send in the debt collectors. He has now received a letter giving him 7 days to pay.
Has he got to pay? surely if he had had to claim Admiral would have said his insurance was void because he had not declared the points.
Also when my son asked for a rebate because his car was off the road and garaged for 3 months whilst he was out of the country he was told that this made no difference and they could not give him a rebate.
Can anyone advise on this. My son has got cheaper insurance with AA now but still needs to know if he can do anything about the back payment

bouncydog1

Insurers are entitled to receive the correct premium for the risk they write. Had your son disclosed the points to them at the time, they would have increased the renewal premium. As you clearly state he did not, they are legally entitled to ask for the money because he has had the cover.

If he does not pay them the back premium, then he risks them appointing debt collectors which will probably be expensive as I think that they can add their costs to the amount that they try to reclaim for the insurers. Worst case scenario will be that he gets a CCJ, which will make it almost impossible for him to get credit for quite a while.

Although it leaves a bad taste, I would pay the £218 and be done with it. For the future he should also ensure that he makes a diary note for a month before his insurance is due for renewal to investigate alternatives. He can also, I believe, write to his insurers and tell them not to auto renew.

He should make sure he fully understands all of the clauses in the policy before he buys it so he doesn't end up in a similar position again.

jackson2_2

Thanks Bouncy D!!!. I think we knew that was the way forward. Although when my son first told me it there was an issue over when it happened. But your input has clarified how it works. Thanks again

no-oneknowsme

£218 is a massive increase in premium just for 3 points though !

A lot of Companies charge an extra few pounds and some dont even charge at all for the first three points (my OH's dont) so £218 just seems extreme to me.

vaio

£200+ does sound a lot for 3 points,

He could do some dummy quotes on their web site and see if the increase is what they would charge a prospective customer rather than them taking advantage of the fact that he is a captive existing customer.

If they are taking advantage then print every thing off and challenge it, if they aren't then the money is due and he should pay

Quentin

vaio wrote: »

£200+ does sound a lot for 3 points,

It does, though this won't be just because of the undeclared points - there will be the inevitable admin fee included in this, and it relates to a previous year when the OP would have had less NCD than currently, thus the loading his points warranted would not be discounted so heavily as they would be now.

And they have quoted a similar £200 increase for his current year's premium.

Maybe the insurer doesn't just rate on 3 points, but what offence caused the endorsement in the first place. It does seem insurers take a dimmer view of traffic light points than speeding points, and maybe this insurer is dead against mobile phone convictions.

no-oneknowsme

Ahhhh , yeah , i forgot to factor in the admin charges.

vaio

Quentin wrote: »

It does, though this won't be just because of the undeclared points - there will be the inevitable admin fee included in this, and it relates to a previous year when the OP would have had less NCD than currently, thus the loading his points warranted would not be discounted so heavily as they would be now.

And they have quoted a similar £200 increase for his current year's premium.

Maybe the insurer doesn't just rate on 3 points, but what offence caused the endorsement in the first place. It does seem insurers take a dimmer view of traffic light points than speeding points, and maybe this insurer is dead against mobile phone convictions.

Yep, all true but I'd still investigate whether they genuinely charge these amounts on the open market (fair enough) or are taking advantage of a captive customer (not fair & therefore open to challenge)