Car insurance gone wrong! Please help!

ishrav

Hi everyone,
I'm looking for some advice for a friend of mine who's got himself in a bit of a situation! - in 2010 he received an IN10 conviction as a new driver. On the date of the offence he came home after he was charged and immediately applied for insurance but did not mention the earlier facts as he planned to appeal against it because he thought he did have insurance which his partner,being the main policy holder, had assured him had been arranged.
Then after appealing and going through the courts he was convicted after 4 months and received 6 penalty points and a fine.
Now in 2012 he was involved in an accident which he claims wasn't his fault as his car was hit by another driver who refused to accept liability although the major damage was to my friend's car. At the time the insurance company told him it was most likely to be a 50:50 settlement.
However, 5 months after the accident was reported the insurance company wrote to him that his policy was being voided from the start date as he hadn't declared the earlier conviction. Now,my friend, accepts he panicked at that point and realising he had made a big mistake by forgetting to tell them, ignored the letter thinking he didn't have to take any action since he had already renewed with another company by this time.
That was last year, Now a few days ago he received a letter from that insurance company asking him to pay £1300 to them for the costs of repairing the other driver's car! Now what does he do? Does he pay them? Is there any way he can dispute this? Please help!

spacey2012

He would need to make a final complaint and ask the FSA to investigate with regards to retrospective cancellation of a policy .
They usually only allow a policy to be cancelled once notice has been served and not retrospectively .
They can ask him to pay the cost of the correct premium, had he declared the correct facts
This may be what has gone on.
But once in force, Insurance is in force until cancelled in writing giving 7 days notice.

Sounds as if you only have half the tale.

ishrav

spacey2012 wrote: »

He would need to make a final complaint and ask the FSA to investigate with regards to retrospective cancellation of a policy .
They usually only allow a policy to be cancelled once notice has been served and not retrospectively .
They can ask him to pay the cost of the correct premium, had he declared the correct facts
This may be what has gone on.
But once in force, Insurance is in force until cancelled in writing giving 7 days notice.

Sounds as if you only have half the tale.

He says his policy ended on 3/8 and they sent him later voiding it dated 8/8. Also he says he had payed his full premium in advance when he took the policy out.

FlameCloud

spacey2012 wrote: »

He would need to make a final complaint and ask the FSA to investigate with regards to retrospective cancellation of a policy .
They usually only allow a policy to be cancelled once notice has been served and not retrospectively .
They can ask him to pay the cost of the correct premium, had he declared the correct facts
This may be what has gone on.
But once in force, Insurance is in force until cancelled in writing giving 7 days notice.

Sounds as if you only have half the tale.

As has been pointed out to you several times, the FSA do no investigate individual complaints.

As for the advise about the policy, you are frankly wrong.

The FOS allows voidance of the policy to either the inception of the policy or the renewal of it if the insurer is happy that the non disclosure was deliberate. In this case, it seems like the insurer is excercising this right (after all, it is reasonably hard to 'forget' a conviction of this nature.

Even if they do not believe that the non disclosure was deliberate, they can avoid the claim if they can prove- via their underwriting criteria, that they would not have accepted the policy had the disclosure been made. Given that for a lot of insurers an IN10 is an automatic no go there is this to consider as well.

If they have avoided the policy to prior to the date of the claim (like it sounds like) then they will be entitled to recover their costs.

I would recomend that you prompt your friend to not 'forget' convictions such as this- and he will likely need to disclose the voidance as well.

jobdone1

You state at the time of offence he decided not to inform the insurance company by going to court, Well if he reads the material facts it does ask if their are any PENDING convictions no excuse i'm afraid. Try to avoid has shot him in the foot.

dacouch

As he intentionally did not declare the conviction the Insurer is likely to rate this as be a deliberate non disclosure especially with the conviction date being so close to the date of arranging cover.

Being a deliberate non disclosure the Insurer has the option of also requesting the full premium although it sounds like they have not done this.

Your friend must declare to all Insurers who ask whether he has had a policy voided (In effect all of them) forever more.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

He can try an official complaint but due to the circumstances he is unlikely to change their decision.

ishrav

Thank you for all your advice everyone.
So is there no way he can talk to the insurance company and explain his reasons and are they at all likely to maybe reduce the damage done or come to some sort of an agreement mutually?
I understand my friend has made a mistake but the implications are so severe that he won't be able to afford having a car and him and his family won't be able to get out and about as much with the children

spacey2012

It is only a conviction once the offence has either been admitted by declaration or judged by a court.
In the reporting stage it is an allegation.
Insurance can not be retrospectively cancelled for the RTA element , case law is in force, they can recover costs from making a false declaration.
If insurance company's were allowed by Law to retrospective cancel policies, they would never pay out, for anything they would just find some reason not to and cancel the policy.
.
The insurance was voided from the notice of service of termination.

dacouch

spacey2012 wrote: »

It is only a conviction once the offence has either been admitted by declaration or judged by a court.
In the reporting stage it is an allegation.
Insurance can not be retrospectively cancelled for the RTA element , case law is in force, they can recover costs from making a false declaration.
If insurance company's were allowed by Law to retrospective cancel policies, they would never pay out, for anything they would just find some reason not to and cancel the policy.
.
The insurance was voided from the notice of service of termination.

Insurers can and do ask for details of pending convictions.

The Insurers can treat the policy as being void from inception but are obliged as you pointed out to pay out third party claims.

Insurers once they've voided a policy are are entitled to recover any monies they've paid out to third parties.

"A "material" fact is one which would influence an underwriter when they were deciding whether to accept the risk, and the terms and conditions that should apply. If a customer fails to disclose (or misrepresents) a material fact and this induces the insurer to accept the proposed risk, the legal remedy is to "avoid" the policy. This means the insurer is entitled to treat the policy as though it never existed. Unless fraud is involved, the insurer will normally return the premium and will not pay out on any claim made under the policy."

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_non_disclosure_insurance.htm

Quentin

spacey2012 wrote: »

He would need to make a final complaint and ask the FSA to investigate with regards to retrospective cancellation of a policy .
They usually only allow a policy to be cancelled once notice has been served and not retrospectively .
They can ask him to pay the cost of the correct premium, had he declared the correct fact.......

Sorry to bear bad news for you, spacey, The FSA (who you wrongly keep advising us to contact over problems like this) is now dead.

The FSA now deals with food - Food Service Agency, (or summat like that), so if you continue to tell us to go there with our "final complaint/deadlock letter" etc we are going to end up with egg on our faces.

http://www.food.gov.uk/

greyteam1959

FSA = Food Standards Agency NOT Food Services Agency.