Insurance cancelled after car written off

pietaster

Just thought I'd share this tale and see if anyone else has had similar issues with their insurer.

The other week my car was at the front of a three car shunt at a traffic island. I was stationary, the two other vehicles behind me are now apparently disputing which of them was to blame and I have to wait for this to be resolved before the claim can be fully settled.

I have recently heard from my insurer (esure) that my car is deemed uneconomical to repair. The price they have offered is, I guess, reasonable for the age and mileage of the vehicle.

However, I have also been informed that the insurance will now be cancelled. There will be no opportunity to transfer onto my replacement vehicle when I obtain one, nor will they offer any reimbursement of the 8 months of cover which was left outstanding on the policy. Their reasoning for this is that they have paid out on that vehicle and as the vehicle is now scrap that is the end of the insurance agreement.

My feeling however is that if I've paid for 12 months insurance I should get 12 months insurance cover.

I've tried pointing out to them that by refusing to allow me to transfer the outstanding insurance cover on my next vehicle it is a tangible loss to myself of a fair few hundred pounds.

It seems to me that this is a hidden 'excess' on the policy for owners of lower value older vehicles as these are more likely to be uneconomical to repair in the event of an accident.

In my opinion they should be reclaiming the cost of my vehicle from the 'at-fault' parties insurance plus any losses that I incur. They are quite happy to claim back my normal policy excess, but they state that my loss due to the cancellation of the policy cannot be claimed back.

I am therefore in the rather frustrating position of having:
1) No car.
2) Having to source and pay for a whole new insurance policy on my new vehicle when I get one.
3) Having to declare an 'accident - claim not settled' on the new insurance policy as the at-fault parties are still in dispute. This will no doubt load my new insurance premium up even further.

So all in all, for an accident which was not my fault and having what I thought was a 'comprehensive' insurance policy from a reputable supplier, I am now hundreds of pounds out of pocket. Marvelous.

Coincidently, the customer service person at esure did tell me that this policy of cancelling the insurance after a write off is new and only came into force July last year. Apparently I should have been told when I came to renew.

I'm not sure if this is just esure who do this or whether its a more universal policy change. I'm certainly going to be asking my next insurer the question (and it certainly wont be esure).

dunstonh

nor will they offer any reimbursement of the 8 months of cover which was left outstanding on the policy.

That is totally correct and normal.

Car insurance is not pay as you go. You pay once a year to cover you for a claimable event in that year. If you make a claim then the policy has done its job and you do not get a refund. (if you pay monthly you are borrowing money to pay the annual premium).

There will be no opportunity to transfer onto my replacement vehicle when I obtain one,

That is less common. Most insurers will transfer your policy on to the new vehicle. However, you mention esure if the insurer. In recent years they have targeted low risk drivers and low risk areas. They have gone quite risk averse.

My feeling however is that if I've paid for 12 months insurance I should get 12 months insurance cover.

That is the wrong assumption though as mentioned above. You can of course attempt to claim the extra costs through the responsible parties.

In my opinion they should be reclaiming the cost of my vehicle from the 'at-fault' parties insurance plus any losses that I incur.

They will deal with the vehicle but you or your legal team deal with your out of pocket expenses.

I'm not sure if this is just esure who do this or whether its a more universal policy change.

Its not a policy change. Its always been that way. Its just that esure dont take on or price themselves uncompetitively for higher risk cases which you now are at this time.

newama

pietaster wrote: »

Just thought I'd share this tale and see if anyone else has had similar issues with their insurer.

The other week my car was at the front of a three car shunt at a traffic island. I was stationary, the two other vehicles behind me are now apparently disputing which of them was to blame and I have to wait for this to be resolved before the claim can be fully settled.

I have recently heard from my insurer (esure) that my car is deemed uneconomical to repair. The price they have offered is, I guess, reasonable for the age and mileage of the vehicle.

However, I have also been informed that the insurance will now be cancelled. There will be no opportunity to transfer onto my replacement vehicle when I obtain one, nor will they offer any reimbursement of the 8 months of cover which was left outstanding on the policy. Their reasoning for this is that they have paid out on that vehicle and as the vehicle is now scrap that is the end of the insurance agreement.

My feeling however is that if I've paid for 12 months insurance I should get 12 months insurance cover.

I've tried pointing out to them that by refusing to allow me to transfer the outstanding insurance cover on my next vehicle it is a tangible loss to myself of a fair few hundred pounds.

It seems to me that this is a hidden 'excess' on the policy for owners of lower value older vehicles as these are more likely to be uneconomical to repair in the event of an accident.

In my opinion they should be reclaiming the cost of my vehicle from the 'at-fault' parties insurance plus any losses that I incur. They are quite happy to claim back my normal policy excess, but they state that my loss due to the cancellation of the policy cannot be claimed back.

I am therefore in the rather frustrating position of having:
1) No car.
2) Having to source and pay for a whole new insurance policy on my new vehicle when I get one.
3) Having to declare an 'accident - claim not settled' on the new insurance policy as the at-fault parties are still in dispute. This will no doubt load my new insurance premium up even further.

So all in all, for an accident which was not my fault and having what I thought was a 'comprehensive' insurance policy from a reputable supplier, I am now hundreds of pounds out of pocket. Marvelous.

Coincidently, the customer service person at esure did tell me that this policy of cancelling the insurance after a write off is new and only came into force July last year. Apparently I should have been told when I came to renew.

I'm not sure if this is just esure who do this or whether its a more universal policy change. I'm certainly going to be asking my next insurer the question (and it certainly wont be esure).

Having the same problem, im owed 7 months refund from ESURE which they are withholding even though i said i was happy for the insurance to continue until another car was found. I spoke to someone today who said this came in about 4 months ago a handful of insurance companies do this now ! So not a universal policy change then. This is theft!
Paid for a year and should get a year. Disgusting .
were you informed that they were going to cancel policy before or after
accepting settlement?

Quentin

newama wrote: »

Paid for a year and should get a year. Disgusting .
were you informed that they were going to cancel policy before or after
accepting settlement?

Weren't you informed this would happen (in the policy) when you took out the insurance what would happen in the event of a write off/total loss?

If so, you have no beef.

If not, make a complaint to your insurer and follow it up if you get no response.

vaio

Yet another case where a policyholder loses out because they claim on their own policy rather than going direct to the TP insurer.

OP….you really have two choices, if you aren’t too far down the road then it might be an idea to cancel the claim with your own insurance company and deal direct with the third party insurance.

Otherwise, document your costs and add it to the claim against the third party

pietaster

Hello all,

Many thanks for your responses, they are appreciated.

Dunstonh - I have thought about your comments. I would agree that this is how insurance should work if I were just solely insuring against damage to or loss of my vehicle. However, the vast majority of my premium is to insure against third party liability. That third party liability cover should contiue to run to the expiry date of the insurance. (for example, my occupational third party liability insurance would not be cancelled after I make a claim, in fact as far as I'm aware there is no limit to the number of claims I make over the insurance period). By denying me the ability to transfer this part of the insurance onto my next vehicle Esure are, in effect, just pocketing my money and walking away. The full amount of my claim will be recovered by them from the third party insurer and therefore they will have suffered no loss whatsoever. I however, will have suffered a considerable loss. I don't therefore consider that the policy has done its job.

newama - I was informed that the policy was going to be cancelled when they phoned to tell me that the vehicle was a total loss.

Quentin - I have been with Esure for a number of years. Apparently this change to the policy was made last year. I should apparently have been told this when I came to renew. I still have my renewal invite letter from Feb this year and there is nothing in there stating this change. Esure state that it is in their policy document (which was sent out after I had renewed). As usual this document is a bewildering assortment of legal jargon which no lay-person could ever have a hope of following.

Vaio - I did not even know I could approach the other parties insurance directly. I have always thought I need to contact my insurance in the event of an accident and that they should deal with all the hassle of contacting other parties. I thought this was one of the things I was paying them so much each year for!

pietaster

Vaio - one other thing. I asked about adding this as a loss to be recuperated from the third party. Esure state that they will not do this as the third party will refuse to pay for losses which are as a result of a policy issue. They will pay to cover my excess though (which I would have thought was also a policy issue).

vaio

You need to tell them but in an accident that is clearly not your fault you will almost invariably get a better result dealing with the third party insurance company direct.

In fact, in your case (and assuming the driver hit you was identified), you'd have been better off if he hadn't been insured and you'd claimed off the MIB

It's a ridiculous situation and I can't see it changing anytime soon

vaio

pietaster wrote: »

Vaio - one other thing. I asked about adding this as a loss to be recuperated from the third party. Esure state that they will not do this as the third party will refuse to pay for losses which are as a result of a policy issue. They will pay to cover my excess though (which I would have thought was also a policy issue).

the basic principle is that you should be put back in the position you would have been in had the accident not happened. If the third party refuse to pay for any of the costs you have incurred as a result of the accident then sue them

dunstonh

Dunstonh - I have thought about your comments. I would agree that this is how insurance should work if I were just solely insuring against damage to or loss of my vehicle. However, the vast majority of my premium is to insure against third party liability. That third party liability cover should contiue to run to the expiry date of the insurance. (for example, my occupational third party liability insurance would not be cancelled after I make a claim, in fact as far as I'm aware there is no limit to the number of claims I make over the insurance period). By denying me the ability to transfer this part of the insurance onto my next vehicle Esure are, in effect, just pocketing my money and walking away. The full amount of my claim will be recovered by them from the third party insurer and therefore they will have suffered no loss whatsoever. I however, will have suffered a considerable loss. I don't therefore consider that the policy has done its job.

You are paying for cover on that vehicle. The vehicle has a total loss so the policy comes to the end.

it is a bit of an anomaly that most providers will transfer your policy to the new vehicle but not refund anything if you dont. However, that is the way it is.

You can claim all your out of pocket expenses, including the costs you incur with the new insurance from the responsible party. So, whilst you are out of pocket to begin with, you will get it back if you were not responsible.

anniecave

Is there a list somewhere of which insurers do the "total loss - cancel your policy" procedure? or can we compile one.

A few years ago I had total loss with elephant (part of admiral) but the car was still fit to drive (just not worth repairing) and I asked to keep the car and they kept insuring me until the end of the policy term. They did initially want to cancel the policy though, but they offered me a credit against taking a new policy out. I didn't take them up on that option though, as I kept the car and the policy continued.

My insurance is up for renewal and I've just looked at my current policy - Tesco - and this doesn't have the total loss = cancelled policy clause in it.

The new policy they are offering me does have it in there. It's hidden right at the end of the policy.

I've just looked at my best quote so far - Admiral - and this also has total loss = no cover.

So so far:

Esure
Admiral (and I asssume Bell, Elephant, Diamond et al.)
Tesco

all have the total loss = cancel your cover clause.