Letter From Swinton Owing Money

motinter

Last November I renewed my moped insurance policy with Swinton (3rd Party Fire and Theft). My policy is underwritten by Highway.

In March of this year I had an accident whereby I had a light collision with another car (damaged radiator on his car).

On the day of the accident I went through the usual process of letting them know about the accident. I didn't claim myself, the man who I hit was the only one actually claiming from the insurance.

My bike sat on my drive for 2 months unused as I couldn't find the parts to fix it, and so I cancelled my policy with Swinton. I payed the cancellation fee by direct debit.

Fast forward to today and I receive a letter from Swinton saying I owe £140 odd which is due in full immediately following a claim.

A little shocked I rang Swinton as soon as I had read the letter. The lady (who was very helpful) explained to me how the underwriting works - that Swinton pay the policy in full to Highway, and I then pay Swinton monthly.

Onto the owed amount. She said that Highway are refusing to pay Swinton the remainder of the policy (from my cancellation date to the end of policy) and therefore I have to pay Swinton the remainder of the policy (which I have not used and have cancelled!).


How is this so?

Faith177

I would ask them to explain why Highway aren't refunding the money or call Highway themselves 0845 373 1242.

It could be that the claim hasn't been closed down properly and still showing as open.

Just give them a call should be easy to sort

motinter

Highway have said that they do not return the premium if they have had to pay out for a claim.

What is the point in insurance if these guys just keep your money?!!?

antrobus

The Key Facts for Highway Motorcycle insurance states;-

You may cancel this insurance outside of the 14-day period by providing confirmation to your insurance adviser and returning any cover note and/or certificate of insurance. We will work out the refund on a pro rata basis less an additional charge of £25 + Insurance Premium Tax to cover our administration costs. If you cancel your policy following a claim there will be no refund of premium.

http://www.highway-insurance.co.uk/upload/lv-rebrand-2009/pdfs/broker/21226249_highway_motorcycle_key_facts_0712.pdf

vaio

Yep, that is a more or less standard term in policies

Thinking about it, it's illogical and I wonder if it would stand the FOS fairness test

Quentin

You could see if you can reimburse them their costs and thereby make it a non fault claim. (If cost effective).

You could then cancel and get any refund due. Check with swinton how much it will cost to cancel - their cancellation fees can be high.

Either way this claim will have to be disclosed to future insurers when asking for quotes.

motinter

IIRC it's £40 or so to cancel with Swinton.

I just think it's a strange part of their contract. So if I wasn't to have cancelled I would have just paid the rest of my premium for the remainder of the contract and not owed them anything?

Quentin

Yes.

All insurers would want the full year's premium once again claim had been made.

motinter

Unfair IMO, but what can I do - I've agreed to the contract.

I have no bike, so I cancel my insurance yet I still owe the remainder of my premium and have paid a cancellation fee to Swinton also.

vaio

as above the FOS enforce a fairness requirement on insurers so if you think it's unfair then complain and if they don't change their minds you can refer to the FOS for a decision.

If they think any of the T&C are unfair to the consumer then they will rule against it and make it unenforceable so the fact that you (as a consumer) agreed to it doesn't matter

The "no refunds once a claim has been made" condition is certainly illogical and I can see a good argument why it is also unfair.

dunstonh

mattyashy wrote: »

Highway have said that they do not return the premium if they have had to pay out for a claim.

What is the point in insurance if these guys just keep your money?!!?

The point of the insurance is that if you had not had it then you would have to pay the money yourself.

You bought a policy where it was agreed should a claim occur during the 12 months of cover then the policy will deal with it. you had a claim. The policy did its job. It is not a pay as you go policy. You dont get money back because you were only x months into it when the claim occurred.

The "no refunds once a claim has been made" condition is certainly logical and I can see a good argument why it is also fair. This is standard in insurance. The financial ombudsman service does not consider it unfair either and have published it in issue 54 of their publications:
Similarly, the provision that premiums for an annual contract are not refundable if a claim has been paid does not appear to be unfair.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm