Car Insurance back dating premium charges because of endorsements

Sezzy007

I received my car insurance renewal in the post last week and gave them a call to tell them I have had some extra endorsements.

I forgot to do that last year so I had 2 to tell them about. 1 in 2010 and 1 in 2011.

They said because I didn't tell them last year I now have to pay £250 for the extra on last years policy. I said no because if I did need to claim you probably just wouldn't have paid out so why I should I pay now for something I didn't have. They argue that they would have paid out as they don't like to not insure people but would have asked me to pay the extra premium.

Is this the norm? If I hadn't have told them now they never would have known and I never would have been charged the extra. I've told them I'm not renewing with them but they are still charging me the £250.

My renewal was £406 but on doing a quote search with both those endorsements I have found a quote for £480. My insurance company was always the cheapest of anyone every year so I don't think they needed to add on £200 per endorsement.

Is there anything I can do or do I just have to pay it?

Thanks

Sezzy

McKneff

I think your argument about them not paying if you made a claim is wrong in part, maybe they wouldnt have paid out anything that you yourseld paid but i think legally they are bound to pay out any third party claim. I'm no expert though. So in actual fact the important things would have been covered.

To be honest, I would pay up before they turn round and cancel your policy altogether, then you will have the devils own job getting insurance anywhere, because you will be asked 'have you ever had insurance cancelled' and of course you would have to say yes, and then they would probably decline because you would have to say lack of disclosure, and go through the whole rigmarole time and time again with different providers.

Sorry. There may be experts coming along to advise better than me, thats just my common sense answer.

Sezzy007

Thanks. My policy ends next week so I've told them i'm not renewing and have just bought insurance elsewhere.

jonnyd281

Watch this space for the Court Action, CCJs and the rather large gentlemen at the door requesting payment.

dunstonh

I said no because if I did need to claim you probably just wouldn't have paid out so why I should I pay now for something I didn't have.

You obtained insurance pricing using incorrect information. So, you asked the insurer to take on a risk which you told them was less than it actually was. They would have paid out but you would have had to pay the premium owed. So, your assumption is wrong. That is unless you were committing fraud. In which case your assumption is correct. I doubt you would admit to that though.

Is this the norm?

Yes.

If I hadn't have told them now they never would have known and I never would have been charged the extra.

Yes. You would have got away with it but its a loophole rather than what is right.

I've told them I'm not renewing with them but they are still charging me the £250.

You do realise that they will not release proof of no claims discount if you refuse to pay. So, when your new insurer asks for proof from the old company, they will not get it which will result in your premium from the new company going up, as well as a possible admin charge or even they may cancel it if its a company that does not take on people with no NCD.

You are now in debt with the old insurer and if you paid monthly, they have a credit agreement in place which means they can put on your credit file that you are in arrears. That will then destroy your ability to get credit (including mortgages) in future. They can (and usually do) sell the debt to a collection agency who will then go through the usual events to get you to repay the money. This includes applying to court for a CCJ. This may also be something you have to declare to your employer and that may impact on your job.

Finally, as the policy is in force and you have refused to pay, the insurer can cancel the policy before the expiry date and that means you would need to declare this cancellation to all insurance for the rest of your life. This can go on the register and the new insurer can then come after you for an increased premium due to non-disclosure of this cancellation. They may even cancel the policy leaving you with two cancellations to declare.

You are leaving yourself open to so many hassles and increased costs all because of your error and refusal to pay a legal debt.

InsideInsurance

If it were the case you didn't have to pay the extra for your "mistake" then we would all "accidentally" put ourselves down as a 50 year old female driver with 30 years claim free driving and an NCD to match with no points and only pay up to what it should have been if a claim happened.

You made a mistake in getting the points, you made a second mistake by not declaring them, do you really want to make a third mistake and end up with a CCJ as well as being blacklisted for insurance? At the moment they've accepted it was an accidental mistake and allowing you the opportunity to rectify it by paying the correct premium.

Sezzy007

Thanks for the advice. I have paid it as they have my card on file that I pay by every year so they are just taking it from that.

I was just wondering if they had the right to do that and if there was anything I could do. If there isn't then that's fine.

McKneff

Sezzy007 wrote: »

Thanks for the advice. I have paid it as they have my card on file that I pay by every year so they are just taking it from that.

I was just wondering if they had the right to do that and if there was anything I could do. If there isn't then that's fine.

There, it's done, you dont have any future hassle so you dont have to stress about it anymore,

It could have affected you majorly for many years to come, I really think they have been fair with you by accepting that it was a genuine error

Best wishes to you.

dunstonh

i know this thread hasnt resulted in the responses you wanted. However, not everything the insurers do is bad or wrong.

thenudeone

If you make a claim but had failed to disclose relevant information, my understanding of the FSO rulings is that
1) if the insurer would still have insured you (but perhaps at a higher premium) if you had declared it; they should pay the claim less the extra premium they would have charged, or pay the claim less the proportion by which the premium was underpaid
BUT
2) If the information was serious enough that they would not have issued insurance at all, they do not need to pay the claim (although if they are forced to pay third parties due to the provisions of the Road Traffic Act then they can pursue you for the cost)

Here are some links that explain the thought process:
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/25/25-insurance-casestudies-non-disclosure.htm

They have already stated that your circumstances fall into category 1), i.e. they would have paid any claim; so it's not unreasonable to ask for the extra premium. It's completely irrelevant that you didn't claim. You had the benefit of cover. Pay what you should have paid in the first place.