Car written off, premiums refunded? No.

dunstonh

These days where our apprentice is paying three months wages for a car worth maybe 20% of what it costs him to insure ending a policy on a total loss payout means that insurers would be tempted to write off for really trivial damage as the retention of the remainder of the premium would be the largest sum involved.

How does that differ from in the past. My premiums when I first started to drive in the 80s were about 10% of my annual gross income. Yes, we are currently in a hard market for high risk areas, but all generations have had to put up with high premiums in the past.

To me it seems fair that the policy should be able to be transferred onto a replacement vehicle, and once you accept that argument then it logically follows that a refund should be available if transferring to a replacement doesn't happen.

Ok. We know your opinion but you are not an ombudsman. We know the ombudsman opinion and it is effectively on they that matter. I think if you pushed the point and it required a decision one way or the other then the insurers are more likely to remove the ability to transfer the policy in the event of a claim rather than all all to be transferred. So, perhaps its better to stick with the quality providers that allow that and not the bottom end of the market focused on lowest premium with things lopped off to allow them to be cheap.

vaio

Yep, looks like you got on the driving/insurance curve about 10 years after me, mine was two weeks wages so maybe 5% of income, yours was 10% but a couple of decades later our apprentice is paying 30+% of his wages. Seems like the curve is getting increasingly steeper.

Don't think it's to do with area, we both live in the same back water rural village where I can insure an Audi S4 for <£250 yet he pays >£3k for a small engined Rover 25

As for the ombudsman, I'd like to think that if a case like this came before them they'd say the term ending the policy on a total loss is unfair, you bought a 12 month policy so you are entitled to 12 months cover.

I can't see any practical difference between me claiming for a chipped headlight (replacement cost £500) and him claiming because he's dropped his Metro in a ditch (total loss pay out £500) yet his £3k policy would end but my £250 policy would continue until normal expiry. That's arbitrary and arbitrary is generally unfair

dunstonh

As for the ombudsman, I'd like to think that if a case like this came before them they'd say the term ending the policy on a total loss is unfair, you bought a 12 month policy so you are entitled to 12 months cover.

I did post a link to the FOS publication a couple of weeks ago but it did say in effect that where there had been a claim that it was reasonable for no refund to be given. I will take another look out for which edition it was in and post a link later (cant now)

I can't see any practical difference between me claiming for a chipped headlight (replacement cost £500) and him claiming because he's dropped his Metro in a ditch (total loss pay out £500) yet his £3k policy would end but my £250 policy would continue until normal expiry. That's arbitrary and arbitrary is generally unfair

Like most of your points, I do understand what you are saying and why (even if it doesnt always seem that way). However, I think this really comes down to quality of cover/provision. The assumption is a vehicle will be replaced. However, the cheap plans do seem to have more things lopped off. If we start standardising too much, you can bet your life it wont be the better option it is standardised to but the lower standard (such is the way things things usually end up0.

EdGasket

I think it would be better for this area to be 'standardised' then we'd all know where we stand. I hardly think anyone knows what happens to their remaining insurance until they have the misfortune to suffer a total loss. When comparing quotes this information is not readily available and if you spent your time reading the entire policies of every company you get a quote from you would either go nuts or be a very sad individual with no life.

It seems pretty clear to me that if you buy 12 months of cover than that is what you should receive; that would be fair. Other insurance like house contents, or even mobile phone cover doesn't stop when things get lost so why should car cover be allowed to be terminated with no transfer to another vehicle or a refund of the unused portion?

vaio

like a lot of insurance law & procedures I suspect this is a hang over from the days when insurance was done in a coffee shop and was mainly concerned with shipping. If a total loss payment is made on a ship/cargo then there is no need (or point) in the insurance continuing.

Fast forward 200 years and consider modern car insurance where only a small proportion of the premium relates to own car damage/loss with the bulk of the premium needed to deal with injuries/damage to third parties and it's unreasonable/unfair for the entire policy to be forfeit because of a total loss claim

dunstonh

Other insurance like house contents, or even mobile phone cover doesn't stop when things get lost

House insurance would if you did not transfer it to a new address. I havent got a clue about mobile phone insurance as that is a complete waste of money to being with!

EdGasket

dunstonh wrote: »

House insurance would if you did not transfer it to a new address. I havent got a clue about mobile phone insurance as that is a complete waste of money to being with!

Your post doesn't make sense. You make a claim on your house contents e.g. after fire or flood; you buy new contents for same address; insurance continues. I know someone who has had about 5 iPhones on his 12 month insurance; keeps losing them but the insurance is not cancelled after a claim.

dunstonh

EdGasket wrote: »

Your post doesn't make sense. You make a claim on your house contents e.g. after fire or flood; you buy new contents for same address; insurance continues. I know someone who has had about 5 iPhones on his 12 month insurance; keeps losing them but the insurance is not cancelled after a claim.

If you make a claim but stay at the same address you would expect it to continue. However, if you make a claim but then try to cancel that policy in the same year as the claim then you wont get a refund of the outstanding premium. If you move house and transfer the policy to the new house, it will continue.

EdGasket

Exactly; it would continue, not get cancelled!

dunstonh

EdGasket wrote: »

Exactly; it would continue, not get cancelled!

Exactly the same as the vast majority of car insurance providers.