Rejected insurance claim

BigV_2

I took out fully comprehensive cover for this week on my dad's car for a drive to France.

I got into Paris on Tuesday morning and was driving to the hotel. As I was moving away from a traffic light, my engine broke down, with a piston breaking off causing the engine to collapse. The car was towed to a Peugeot garage. The next day they gave me a quote for the repairs of about 10000 euros and the car is valued at around 5000 pounds max so it would be written off.

I contacted my insurance company (RAC) to tell them what had happened. At first, they accepted what had happened, told me to keep the car at the garage and they would take it on from there and pay whatever costs (storage/repairs) etc.

However, about 4 hours later, I got a call back from one of the RAC linguists saying that my fully comprehensive cover was only valid in the UK and not in Europe. I honestly did not know this as my personal understanding of the words "fully comprehensive" is that it's the maximal insurance policy and that it would be valid within the EU the same as in the UK. They told me they couldn't get involved with the case. At no point when I was sold the cover was I told that European cover was at an additional cost.

Since then, Norwich Union overseas claims department have phoned to tell me there's nothing they can do and that I need to contact RAC customer services, who have said they will call me back.

This has all got into a big mess and I feel that my ignorance has been exploited. All because of a technicality my parents stand to lose the one thing of any value that they possess. What can I do?

Should I go to Peugeot themselves? The car is 5 years old and the warranty has expired but I phoned them up and asked them whether a 5 year old diesel engine should fall apart after 60000 miles and they say it shouldn't provided it's driven smoothly and serviced regularly. My dad drives very conservatively (no claims in 20 years) and has an immaculate service record, so do we stand a chance of taking Peugeot on for building an substandard engine?

I'm really desperate for help. This is a really serious situation for my family. Is there any ideas anybody has as to what I can do?

Thanks.

dunstonh

car insurance does not cover mechanical failure. So, one assumes that you are referring to breakdown recovery. However, you then mention comprehensive insurance which suggest car insurance.

Which is it that you have?

BargainHunterCat

Comprehensive cover only ever covers the UK unless specifically stated otherwise. All UK policies automatically give you Third Party Only cover for Europe but that is it. Third Party Only just means that if you have an accident that is your fault, then the other person's damage is covered so you won't be sued.
You must inform the insurers if you want fully comp for a holiday abroad which will usually be subject to an additional premium - it's what used to be called a "green card" which covers you for things like Bail Bonds in Spain.
If you feel RAC misled you when you took out the cover, then that would be a matter to take up with the Ombudsman.
When you took out the cover was it a completely new policy or an extension to an existing one? When you take out insurance there are certain things they must and do say over the phone and this will be backed up by policy documents which they will send you which you must read!!! I know most people don't, but it's a big mistake.
If you didn't mention the trip abroad, the exclusion is clearly stated in your policy documentation, and your just assumed you would be covered, there's not much you can do I'm afraid.
As mentioned previously - it wouldn't cover mechanical breakdown if this was purely a wear & tear issue. If as a result of the breakdown you caused an accident, your insurers may consider the resulting accident damage but not the cost of the broken-down parts.
If you do have Breakdown cover which covers Europe, they may be able to help with moving the vehicle and maybe repatriation depending on the level of cover.
Sorry I can't be much help here.

BigV_2

Thanks.

I understand that I should have done that but in my inexperience, I thought fully comprehensive meant that it's absolute. While this might be defined differently within the insurance industry, to me as a layperson, I thought it would be literally fully comprehensive, especially as from what I knew from other policies, the EU is also comprehensively covered.

I realise that insurance wouldn't cover a mechanical fault so I told the insurance company that I thought it was because I drove over a speed hump too hard. But why does this not count as an accident anyway, it was a fortuitous event and completely unintentional, why do they look at things differently?

The nature of the accident was completely unrelated to the fact that I was driving in France. It had nothing to do with right hand drive, it had nothing to do with priority to cars on the right etc, it was an event that could very well have happened in this country (driving over a bump). Therefore, the additional risk of being in France was not to blame here, again.

The breakdown is fine, I was covered in Europe, the car was initially towed to the Peugeot dealer in France and will be repatriated within 3 weeks. My passengers and I were flown back.

I have a 3PFT policy for my car (a Peugeot 306) with RAC because it's value is much cheaper than any insurance policy. I was taking my dad's car (a 406) to France and I added that onto my policy with the sole purpose of the holiday to France and I took fully comprehensive cover because the car is worth much more, it would be a mistake not to be covered.

Is there really no generosity, understanding, or humility in insurance? Everybody I speak to over the phone seems to accept that this was just a misunderstanding but it means nothing to them as human beings. The repurcussions are extremely grave for us but despite this, despite my intentions when taking the policy out etc, they feels it's not unjust that we get nothing out of this.

Is there any chance of getting the money back off Peugeot if it was a premature mechanical fault? Again, I cannot see it being fair to have a 3 year warranty on an engine for a car that initally cost 17000 that has been well serviced and done 60000 in 5 years.

brazilianwax

I used to sell insurance.

If you knew you were taking the car out of the country, why didn't you check that it would be covered. I'm sorry, but assuming that insurance bought in the UK would also cover the whole of the EU is ridiculous. For a start, the recovery costs from the far reaches of Europe would be massive, and as the majority of people don't take their cars abroad, why would that be covered? Your premium would probably double if they were to provide such cover for everyone unneccessarily.

Secondly, why didn't you just get yourself added to your Dad's policy? That would be the most straightforward thing to do as a car should not be insured twice. Although the above would still apply.

As others have said, insurance doesn't cover mechanical failure. For an insurer to agree it was an accident you'd have needed to hit something I'd imagine. Knowing how slippery car manufacturers are when cars are under warranty, I can't see you being successful claiming against Peugeot, but you need specialist legal advice for that.

BigV_2

I can't see it as being that ridiculous. There wouldn't be any recovery costs as we have full breakdown and recovery, and I thought, just as fully comprehensive breakdown cover protects you in Europe, the same would apply to the UK. It honestly didn't cross my mind that Europe doesn't cout as fully comprehensive.

A car shouldn't be insured twice? That's the first I've heard of that too. Does that mean I've got even more problems? My dad is insured with SAGA but because I'm under 21, they needed to insure me for 6 months. That's why I went to RAC (my insurer) and they were happy to insure me for a week and didn't mention anything about not being covered twice.

People I've spoke to have suggested that once the car is here, I report a claim saying the accident occurred in this country with my dad driving. Would this work? The problem is, Green Flag (the breakdown service) was supplied by Saga and they have details of the breakdown incident. Are all these records stored? Would it be dangerous to do this?

mattymoo

I'm afraid ignorance on your part is no defence. You are expected to check the policy cover / schedule and ensure it meets your needs.

If you had asked the call centre salesperson "Am I covered fully comp to drive abroad" - and they answered yes and that later turned out to be incorrect, then yes, you do have some comeback.

However, it seems you extended your existing policy for the sole purpose of covering the vehicle abroad but failed to ask the basic question - will I be covered overseas?

Edit - as for your last para, you would be daft to do this.
Your insurer will have logged the claim on the CUE database (claims and underwriting exchange). If you log a claim with Saga they will check the database, see an identical incident with the same vehicle and smell a big fat smelly rat. Next thing you know the old bill is at your door (and your dad's since the Saga policy is his).

A fraud conviction hangs around like a millstone for years. Employers do not want to know you and neither to financial institutions like mortgage lenders, banks and insurers.

One ray of hope may exist.
Did your father have the car regularly serviced? Did he have the timing belt changed at the correct interval?
I had a car that broke its belt a few years back at 50,000 miles. Belt was not due for a change until 72,000 miles.
When a timing belt (aka cam belt) goes, you normally lose the engine as a result. In my case the manufacturer met 95% of the repair cost and 95% of the hire car costs. It was a company car though (huge fleet with over 1000 vehs) so my employer may have used a bit of clout.

Consider legal action against the garage / manufacturer. Use the legal expenses cover on your motor policy (assuming you took this out) to see if there is any merit in this.

PS: have never known a speed hump to knock out an engine. Damage to alloys, suspension and tyres yes but engine - never.

brazilianwax

I second mattymoo's comments.

I expect both RAC and SAGA have records of what you have reported (and it is possibly now on the motor insurers database). Trying to report a fake accident now could get you into a lot of trouble.

As for the dual insurance policies, see this link. It's aimed at students, but applies to everyone equally.

iceicebaby

I work in insurance, completely agree with brazilianwax and mattymoo

[Deleted User]

Car insurance doesnt cover mechanical damage it just covers crash damage, if your engine blows up its your responsibilty.

10,000 euros my a***!!! go down the scrappy you should be able to pick up a second hand engine prob about 1-200 quid a decent english garage will perform the swap for about 250 bucks.

Then sell it and never again buy a non-japanese car!!!!!

BigV_2

Thanks for all the advice.

The car has been serviced at the correct times, until 2004 it was serviced under warranty by Peugeot dealers, and subsequently by private Peugeot specialists. I dont know if the cambelt was changed but I dont think it was broken, I think it's got to do with the engine mount.

I think my dad has legal expenses included so can he use his (even though I was driving)? It is his car after all.

Thanks for the link I'll have a read through.

If I replace with a 2nd hand engine etc, how much will that depreciate the car's value?