Excess Protection Insurance

InsideInsurance

Well, RIAS has the following on their Motor policy add on if you look at the top of page 3:

http://www.rias.co.uk/webfiles/uploads/motor%20policy%20web.pdf

It explicitly excludes claims under the excess:

Any claim where the total cost or repair/replacement of the insured car does not exceed your excess under your Motor Car Insurance Policy

Sledgehead

Yep, un-bloody believeable. We're in the middle of sorting out ~£17bn of PPI mis-selling and these jokers are already building the next scandal.

We should check across all the insurers. My feeling is this an industry wide thing. Tell folks on the phone they can claim. Suggest they can claim by reference to multiple claims up to the excess (= insured sum) whilst all the time having no intention of paying out.

Just how does that differe from the PPI scandal eh?

InsideInsurance

Would need to understand how long they have been selling the product.

If it is fairly new it sounds like the staff training has been skimped on. Having done plenty of NPD in the past at times the speed to market can be considered too important -v- ensuring all staff fully understand the new product/ features/ offers. For all but the last it normally corrects itself after a few months. The later is harder due to the one off or periodic nature of offers.

Rarely do any of them get to the state that PPI did. I did look at doing a deal with excess insurance and the aggregators but the risk of customer miss understanding was far too high for my comfort.

Sledgehead

I've been with them for three years. Same wording all along, yet staff today are telling me this product will pay out for claims less than the excess. There is no excuse. They know why peeps buy this : to remove the marginal risk.

Nobody buys excess insurance to reclaim the £300 on a £1m personal injury lawsuit. When they do that much damage they are are only too happy to pay the first 300 quid. This is for people who either think they can mitigate the costs of damage after having increased their excess to reduce their premia, or for people who resent the fact they find themselves out of pocket for multiple sub-excess knocks and scrapes despite having paid good money for insurance. Yet those are exactly the people these policies will never cover.

InsideInsurance

If you had a £1m pi claim you wouldnt be able to use the insurance either as it is only for when the xs is unrecoverable (eg fault accident, hit & run, fire, theft)

For many ordinary people with normal cars etc simply paying for a £0 excess is cheaper than buying excess insurance. Where it is good is for those with very high motor premiums or those with compulsory excesses (eg inexperienced drivers, convertibles etc) who cannot otherwise get a £0 excess.

If they have been selling it for 3 years then there is no excuse for not knowing its T&Cs or their compliance/regulatory risk team for not picking up the miss selling.

Sledgehead

re £1m PI, lol, of course you are right.

I'll check out how much I can get my excess down to following your advice.

You'll be pleased to know your MSE 'thank rate' is edging up

I'd like to ask you another question which often flumoxes me. I have another old car. If this car is totalled / stolen-unrecovered, how relevant is the valuation of it on my policy? I'm pretty sure the valuation is way more than I'd get on the open market and certainly way more that 'we-buy-any-car' will give. The car I'm thinking of now is really very old and although it's a good runner, cosmetically good, bought new and a good marque (and thus valuable to me), I can't see the insurer giving me a brass razoo for it. I can even imagine they might not even value it at more than the excess. I'm guessing in those circumstances I'd get sweet f.a., bacause again, the excess might be higher than the write-off valuation, so I would not even benefit from any excess protection I might buy.

Thanks for your advice.

InsideInsurance

As always, different insurers take different approaches. The value you enter on the quote system for standard motor at best has no impact at all and at worse sets a maximum value for payout. A former client also used it for if you could get TPFT cover or not (they didnt allow TPFT on vehicles the PH valued at over £5,000)

If the vehicle is a total loss then they will calculate market value using the likes of Glass Guide. To avoid the argument of "I insured it for £2,000 but you are only offering me £500" most insurers state "market value" on documents rather than what was entered into the quote engine.

Certainly if the valuation of the vehicle is below that of the excess then excess insurance is pointless as you'll never have an accidental damage, theft or fire claim to own vehicle large enough to trigger the excess being payable. In these cases it would probably be most sensible to drop the xs ins and increase the xs to as high as they'll allow as the excess is only payable on your own damage claims and so you may as well reduce the premiums by having the high excess given you'll get nothing either way.

Alternatively you could reduce the xs to below the vehicle value and get the xs ins to ensure you get a payout but you need to weigh up the cost of doing that -v- the value of the vehicle

Sledgehead

InsideInsurance wrote: »

Certainly if the valuation of the vehicle is below that of the excess then excess insurance is pointless as you'll never have an accidental damage, theft or fire claim to own vehicle large enough to trigger the excess being payable. ...

... BUT correct me if I'm wrong, I am right in saying that should a third party be involved and I am deemed to be at fault, there is a good chance I will end up paying out my excess for work done on their vehicle, right?

In that case excess protection will have a value and is therefore not pointless, yes?

dacouch

The clue was in the quote you provided..."The Excess Protection Policy provides insurance to cover reimbursement, up to the Sum Insured, for Your Excess under your Motor Car Insurance Policy following the successful settlement of a claim

It's the sort of add on product that the staff often receive bonuses or targets for their sale. Unfortunately transiant staff will sometimes lie to get a sale.

I worked for a direct company for a year some time ago in customer services. We frequently had problems to sort out where the telesales staff had lied or fudged things to get a sale. They received their commission once the policy was taken out with no cancellations clawback. They got their commission, they did not have to deal with any subsequent problems as it would be CS or claims that found the problem and sales staff tend to move on a lot so it added up to them not caring

Sledgehead

dacouch wrote: »

The clue was in the quote you provided..."The Excess Protection Policy provides insurance to cover reimbursement, up to the Sum Insured, for Your Excess under your Motor Car Insurance Policy following the successful settlement of a claim

Yeah, and the clue I understood as much was in the bold type I employed :cool:

I'm still keen for Inside Insurance to comment on the post I made prior to this one, if he's out there. Cheers.