Car written off - still have to pay insurance?

vaio

jazzy wrote: »

I would have thought that the policy and monthly payments would continue. The usual procedure is that you would replace the car and the policy is then transferred to the new car.

If that was the case then surely you would have the ability to cancel the policy and get a refund which reflects the savings to the insurance company of not have to cover the replacement car?

An increasing number of companies end a policy (no refund, full premium payable) on a total loss payout.

Whilst both these will be spelt out in the T&C I have doubts about whether either would pass the “treat the punter fairly” test.

zappahey

property.advert wrote: »

Yeah I understand but I contest that it is an unfair term and potentially unlawful.


Additionally, there is the simple fact that you cannot / don't need to insure something which does not exist i.e. a written off car. This premise does not seem to have been sufficiently tested.

Donkeys years ago the argument that insurance was an unbreakable annual contract was more valid, though still unfair back then.



The public are being shafted and there is ample argument for reform but simply little appetite for it.

There's another equally valid argument that the insurer could end the policy at the time of write off, with no refund and anything else is a bonus.

If we ignore minor damage for the moment, the policy covers the risk that a specific vehicle is written off within a specific time period (typically 12 months). If that vehicle is written off, and the insurer pays up, then they have filled their side of the bargain by paying out against the risk and, arguably, the contract ends.

thenudeone

property.advert wrote: »

Yeah I understand but I contest that it is an unfair term and potentially unlawful.

What do you think is unfair?

It's perfectly possible to buy insurance on a month-by-month basis (or even shorter terms) but if you CHOOSE to buy an annual policy then you have paid for the year, and you forgo the flexibility that comes with shorter policies.

Post no. 4 puts hit the nail right on the head.

vaio

zappahey wrote: »

There's another equally valid argument that the insurer could end the policy at the time of write off, with no refund and anything else is a bonus.

If we ignore minor damage for the moment, the policy covers the risk that a specific vehicle is written off within a specific time period (typically 12 months). If that vehicle is written off, and the insurer pays up, then they have filled their side of the bargain by paying out against the risk and, arguably, the contract ends.

I prefer the argument that the policy covers me for all valid claims within a year and if I write my car off in month 2 then I still have 10 months of available cover which I should be able to transfer to another car or relinquish the cover and get a refund for the unused period.

ceebeeby

So, basically, if the friend who had the accident wanted a new car, they would have to have two policies running concurrently to cover the vehicle because the old one only covered the first car, which no longer exists - is that right?

zappahey

vaio wrote: »

I prefer the argument that the policy covers me for all valid claims within a year and if I write my car off in month 2 then I still have 10 months of available cover which I should be able to transfer to another car or relinquish the cover and get a refund for the unused period.

There is no unused period, the risk has been realised and the policy has paid out.

Some may allow you to transfer the cover to another vehicle, none will give you a refund.

adamc260

But Vaio, you pay for 12 months cover to be indemnified in relation to an accident. Once your car is written off they pay out on it, therefore putting you back in the same position before the claim happened. As there is now no vehicle to cover the policy is cancelled as they have met their obligation to pay you out. Some insurers do let you put a new vehicle on cover but others don't.

vaio

bug ger my post has disapeared, if anyone has a copy please re-post it

raskazz

property.advert wrote: »

Yeah I understand but I contest that it is an unfair term and potentially unlawful.

Er, it is not an unfair term or unlawful - indeed, it would not require any contract term for this to be enforceable - it is based on common law principles of contracts being "discharged by performance".

property.advert

raskazz wrote: »

Er, it is not an unfair term or unlawful - indeed, it would not require any contract term for this to be enforceable - it is based on common law principles of contracts being "discharged by performance".

But you are not getting 12 months insurance, which you paid for, if the vehicle is written off after 1 month.

You have not insured the car merely for a write off, which would, as you say, determine the contract, but rather you have insured the car for a multitude of risks, such as theft, 3rd party etc. and those events cannot now happen, yet you have paid for them (or are being asked to pay for them).

This is not a life assurance policy but more akin to private medical insurance. There may be a claim and the insurance continues. If however the policyholder dies, then there is no need to pay additional premiums. I have assurance which goes out for decades to come. By this argument, I should pay those monthly premiums even if I die tomorrow.