Co-op insurance threatening withdrawal of indemnity

kav99disco

Hi, wondering if anyone can offer any advice...

My husband had a fault crash in our car. The CIS were undervaluing our car and continue to do so. I wrote a complaint letter. They have now written to me increasing the value by a menial amount but have stated that the car had alloys (I had brought this to their attention when discussing the value - we bought the car with alloys) and because I didn't include it as a modification that they would not have provided cover and so have passed it to their underwriters to see if they will provide cover.

It is worth noting that despite bringing it to their attention if I had accepted their low offer this would not have been an issue.

I am not petrified that they will not provide us with cover...the long term effects of having the insurance withdrawn would be horrendous and to boot we have finance on the car so would be left high and dry.

I did not deliberately hide this from them, it just genuinely didn't occur to me that it was a modification.

Any advice would be much appreciated.

Thanks

kingstreet

You need to await the insurer's answer, then write to complain if you are not happy with the outcome.

Once you have exhausted all avenues of settlement with the insurer, you can take the matter to the Financial Ombudsman Service (FOS).

Based on what you've said, FOS would probably deem this "inadvertent non-disclosure" of a modification, so your claim would probably be met.

However, in these circumstances, FOS would probably allow the insurer to charge you the difference in premiums which would have been payable had you declared the modification when you took out the policy.

For your info;-

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/61/61-insurance.htm

For us to conclude that a consumer's non-disclosure or misrepresentation when applying for a policy was reckless rather than inadvertent, we must be satisfied from all the evidence (including that relating to any conversation, marketing documentation, other advice or paperwork available at the time to the consumer), that in answer to a clear question the consumer:

did not care whether their answer was true or false and
understood, if only in a limited way, that an answer was required, that it was important to the insurer and that there was a consequence to it.

kingstreet

More here;-

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

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.

Everything turns on the individual circumstances. Customers will find it more difficult to prove that they acted inadvertently if they answered several questions badly. To get one or two questions wrong may be regarded as inadvertent; to get several wrong starts to look like recklessness.

kingstreet

kav99disco wrote: »

Hi, wondering if anyone can offer any advice...

My husband had a fault crash in our car. The CIS were undervaluing our car and continue to do so. I wrote a complaint letter. They have now written to me increasing the value by a menial amount but have stated that the car had alloys (I had brought this to their attention when discussing the value - we bought the car with alloys) and because I didn't include it as a modification that they would not have provided cover and so have passed it to their underwriters to see if they will provide cover.

It is worth noting that despite bringing it to their attention if I had accepted their low offer this would not have been an issue.

I am not petrified that they will not provide us with cover...the long term effects of having the insurance withdrawn would be horrendous and to boot we have finance on the car so would be left high and dry.

I did not deliberately hide this from them, it just genuinely didn't occur to me that it was a modification.

Any advice would be much appreciated.

Thanks

Are alloy wheels available as a factory-fitted option for the make/model/spec or were they an aftermarket addition not linked to the manufacturer?

vaio

kav99disco wrote: »

.......because I didn't include it as a modification that they would not have provided cover and so have passed it to their underwriters to see if they will provide cover........

Is the critical bit, if the non disclosure was ruled inadvertent then the company can void the policy if they would not have accepted the risk in the first place.

If they would have offered cover then you just have to pay the increased premium they would have charged or get a pro-rata reduction in pay out.

If the non disclosure was ruled innocent then you are ok as any claims will be paid whether or not they would have offered cover.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-ins-nondisclosure.htm

is a better link and explains more fully.

kav99disco

Thanks for your replies.

It was a second hand car and to be fair the dealer did say that they he had put new wheels on it as a selling point, but again we didn't know whether he had just replaced old ones, especially as they were the same make as the car and it's not as if we were provided with a recipt for them. In the excitement of owning our first proper car though when I was looking at quotes as I said it just genuinely didn't occur to me to include it.

It's just frustrating that had we accepted their second offer (which was still low) then even though they were aware of it they wouldn't have raised it as an issue.

I know it's my own stupid fault but in all honesty in this day and age I know a lot of people who most likely haven't included them because it just doesn't occur to them.

MrRedundant

I wouldnt let the insurers know the dealer told you that.

vaio

Ford wheels on ford car say I'd certainly argue is innocent, if you'd thought about it at all you'd have assumed they had been on the car from new.

As far as the value of the car goes, http://www.financial-ombudsman.org.u...luation.html#9 is the FOS guide on how cars should be valued