'Fault' insurance claim resulting in loss of annual premium

alastairq

with respect...is there any reason why an insurer should give consideration to 'fairness?'

The policy is, after all, a business transaction, to mutual benefit....but with the risk being solely to one party.


If one insures a vehicle...then disposes of that vehicle, there is nothing therefore to insure for, or against. So, the insurance policy is cancelled? [no longer needed]...

Another vehicle is obtained, but needs insuring.

Is it reasonable to expect the previous insurer to simply continue as if nothing occurred?

Especially as the previous contract was terminated by the client?


I recently had a vehicle which was 'written-off' following a claim.

Albeit a no-fault claim.....however...my insurer was happy to continue the policy with a new [replacement] vehicle.....with administration fees, of course...

K-Lye

scheming_gypsy wrote: »

The fault loss wasn't the cause of the lost premium but the cancelling of the policy.

You pay the yearly premium to cover you for the cost of any claims you might have. As you had a claim they took the full cost of the premium, so your policy was paid up for the year.
the problem is that you were advised to cancel the policy... So i'd phone them to complain, the call should be recorded so there'll be proof that it was them that advised you to cancel it and not just you asking to. the best you could hope for is that they re-activate the policy for the remainder of the year, so you can change the car.

Yes, this is pretty much what I'm doing now. I just found it absurd at the disproportionate way it affects drivers within their term so wanted to share the experience. Have to say I'm a little bit surprised no one else appears to find this policy fundamentally flawed.

K-Lye

alastairq wrote: »

with respect...is there any reason why an insurer should give consideration to 'fairness?'

The policy is, after all, a business transaction, to mutual benefit....but with the risk being solely to one party.


If one insures a vehicle...then disposes of that vehicle, there is nothing therefore to insure for, or against. So, the insurance policy is cancelled? [no longer needed]...

Another vehicle is obtained, but needs insuring.

Is it reasonable to expect the previous insurer to simply continue as if nothing occurred?

Especially as the previous contract was terminated by the client?


I recently had a vehicle which was 'written-off' following a claim.

Albeit a no-fault claim.....however...my insurer was happy to continue the policy with a new [replacement] vehicle.....with administration fees, of course...

The 'fairness' I am so surprised about is lack of parity for drivers. Fair enough policy prices can vary depending on various factors (age, vehicle, etc) but to disproportionately penalise Driver A over Driver B simply by *when* they had their accident is disgraceful.

alastairq

surprised no one else appears to find this policy fundamentally flawed.

Is it perhaps a recognition that cancellation is , in simple terms, an option available to the policyholder?

Rather than a mandatory practice?


And , in recognition, it appears the OP was in receipt of advice from an Agent, rather than the insurer themselves?

alastairq

but to disproportionately penalise Driver A over Driver B simply by *when* they had their accident is disgraceful.

''so-far-so-good'' policy?

If you had not cancelled the policy, would the situation have arisen?

K-Lye

alastairq wrote: »

Is it perhaps a recognition that cancellation is , in simple terms, an option available to the policyholder?

Rather than a mandatory practice?


And , in recognition, it appears the OP was in receipt of advice from an Agent, rather than the insurer themselves?

See my prior post. I have no issue with the policy of irredeemable cancellation (mandatory or otherwise). The issue is with parity for all drivers.

K-Lye

alastairq wrote: »

''so-far-so-good'' policy?

If you had not cancelled the policy, would the situation have arisen?

Indeed not and that is a seperate issue - something forming the basis for my challenge back to them (the Agent having advocated this approach).

However that doesn't excuse the organisation or industry for practicing what is in effect a discriminatory policy.

vaio

As other have said it is likely that your policy T&C will allow retention of premium if you cancel following a claim, however these terms are only binding/enforceable if they are fair and ultimately, this will be decided by the FOS.

The logic I would apply is that you paid for a full year so should get a full year and if you decide to relieve the insurer of the risk (and associated cost/premium) of providing cover for the remainder of the policy then it's unfair that the insurer should retain the all premium. Similar logic applies to those insurers who end policies on a total loss payout.

OP, if you feel that you have been treated unfairly then the answer is to complain to your insurer and, if you are still dissatisfied, refer the case to the FOS.

Another string to your bow (or complaint) is the poor advice you were given by the agent you spoke to.

Joe_Horner

K-Lye wrote: »

What I am asking is is it fair that people who get 1 month use of their policy pay the same price as those who get 12 months worth of use? (assuming identical situations)

.

But you didn't get "one month use" you got "one total loss use".

On your thinking I could be asking if it's fair that I have to keep paying my premium every year without ever geting any "use" out of it because I've never had to claim on my own (or anyone else's) policy.

I've had to shell out for 12 months cover every year for the past 27 years and none of it's been of any use to me whatsoever - at least you've got your money's worth out of this policy!

K-Lye

vaio wrote: »

As other have said it is likely that your policy T&C will allow retention of premium if you cancel following a claim, however these terms are only binding/enforceable if they are fair and ultimately, this will be decided by the FOS.

The logic I would apply is that you paid for a full year so should get a full year and if you decide to relieve the insurer of the risk (and associated cost/premium) of providing cover for the remainder of the policy then it's unfair that the insurer should retain the all premium. Similar logic applies to those insurers who end policies on a total loss payout.

OP, if you feel that you have been treated unfairly then the answer is to complain to your insurer and, if you are still dissatisfied, refer the case to the FOS.

Another string to your bow (or complaint) is the poor advice you were given by the agent you spoke to.

Thanks Vaio. That is indeed how I plan to go forward with this although as illustrated in the debate here I'm not sure how far the FOS will uphold any view that logic should prevail. Clearly there's an endemic perception that this treatment is completely acceptable! At the very least I shall be gunning for the Insurer to reinstate my policy!