Total Loss Still Paying Insurance

NilSatisOptimum

I was involved in car incident 31/10/10, in which my car was made a total loss, the insurance settled with my agreement on 18/11/10.

However in January of this year I noticed that they were still taking monthly debits, I duly cancelled the payments. I have now received a letter stating I must pay a cancellation fee. I've tried phoning them however they say they have no record of this or settlement and must pay or face the collectors.

Q Do I really continue to pay or pay cancellation fee.

McKneff

They are correct, They offered you the premium at a cost, you accepted it.
The fact that you paid it of in monthly installments is irrelevant. You still have to
pay the amount or the cancellation fee.

NilSatisOptimum

o well, i'll add to the losses, as the other driver caused and is now convicted.


Thanks given.

alanfp

McKneff wrote: »

They are correct, They offered you the premium at a cost, you accepted it.
The fact that you paid it of in monthly installments is irrelevant. You still have to
pay the amount or the cancellation fee.

I think you've missed the point that the car, now having been written off has no value and cannot cause anyone else any damage, so was actually only on risk until the date of the incident. I think it's entirely reasonable to stop paying for something that's not being received. (I'm assuming he didn't transfer the policy over to a new car).

noh

alanfp wrote: »

I think you've missed the point that the car, now having been written off has no value and cannot cause anyone else any damage, so was actually only on risk until the date of the incident. I think it's entirely reasonable to stop paying for something that's not being received. (I'm assuming he didn't transfer the policy over to a new car).

No you have missed the point.
It is entirely reasonable for the insurance company to expect to be paid for something they have provided.
The insurance is an annual contract.
The vehicle was a total loss the insurance paid out.
The OP owes the annual premium as agreed when the policy was taken out.

vaio

NilSatisOptimum wrote: »

I was involved in car incident 31/10/10, in which my car was made a total loss, the insurance settled with my agreement on 18/11/10.

However in January of this year I noticed that they were still taking monthly debits, I duly cancelled the payments. I have now received a letter stating I must pay a cancellation fee. I've tried phoning them however they say they have no record of this or settlement and must pay or face the collectors.

Q Do I really continue to pay or pay cancellation fee.

It sounds like it wasn't your fault, did his insurance company pay out or did you claim on yours?

If you claimed on yours they normally deduct the remaining premium from your payout.

If you claimed on his then yours would just continue as normal which, re-reading your post looks likely as they are letting you cancel and effectively giving you a refund

Having said all that, I can't see how you can have a policy on car that no longer exists so I'd expect them to either end the policy or suspend it and then swap it to your new car

basically, more info needed

bouncydog1

In the event that you have made a claim on your policy, your insurers have honoured the annual contract between you and are entitled to receive the annual premium.

In your case you have chosen to pay the premium over twelve monthly instalments, which means that your insurers are still entitled to receive the balance.

As vaio stated, if you claimed off the tp directly without involving your own insurers in any way, you may be able to cancel your insurance. However if your insurers are aware that there has been a claim, even if nothing has been paid from your policy, they will still expect the rest of the premium in case there is an action forthcoming from the third party.

If your insurers have settled the claim with you, check the amount received for your vehicle and ask for a breakdown to make sure they haven't deducted the balance of premium from the claim cost.

vaio

bouncyd!!! wrote: »

.......However if your insurers are aware that there has been a claim, even if nothing has been paid from your policy, they will still expect the rest of the premium in case there is an action forthcoming from the third party.......

Is that right? if you have a non fault you lose the right to cancel/get refund on the grounds there might be a claim at some time in the future?

mikey72

Mine won't let me cancel if I've made a claim.
But it certainly doesn't suggest I can't cancel if there has been a claim off a third party, and I've told them for information only.
It should be a pro-rata cancellation, with a reasonable fee, as has already been ruled on by the FOS.

vaio

In danger of drifting off topic and I know it is generally the case but I’m not even sure about the logic/fairness (rather than contractual) of stopping cancellation rights/ending policies if there has been a claim.

Risk is a minute by minute, day by day thing and the pricing reflects that.

If a company decides that my risk is say £1 a day then it doesn’t seem fair that if I make a claim after 10 days the insurance company can end my policy and effectively get £365 for ten days cover when the agreement was they would provide a years cover for that sum.

It’s an agreement and just as I can’t adjust the price after the event if I don’t claim they shouldn’t be able to adjust it if I did.

keeley1973

vaio wrote: »

It sounds like it wasn't your fault, did his insurance company pay out or did you claim on yours?

Having said all that, I can't see how you can have a policy on car that no longer exists so I'd expect them to either end the policy or suspend it and then swap it to your new car

basically, more info needed

I agree with this. Insurers will usually let you transfer cover to a new car or "suspend" your insurance until you get another car (if it is not before the end of the policy then they should give you a % credit towards the next year - assuming you have a car then and stay with them). However, they would not let you stop payment of the annual premium (assuming they did not already deduct the balance of premium from your claims settlement).