Insurers won't pay full indemnity

tekeazah

Wife's car got bashed. Car was a gift from a friend back in 2009. Insurers won't pay full indemnity because they say she should have known car was a CAT C write-off (only we never knew until they told us so. They also want to apply an additional premium charge because of this, and deduct amount before any payment.
Should they really be doing this? I no very little about insuring cars.
We need help in explaining what our rights, are if any.

vaio

Did the proposal ask if it was cat C? If it did and you knew and didn't tell them then extra premium might be due. If they didn't ask then no extra premium can be asked for.

If she didn't know then the FOS have ruled on this....search their site for the full details but from memory basically she should get paid out in full.

Quentin

The car's market value will be affected by it having previously been written off. The settlement value will correctly be less than if it had never been a write off.

As far as the premium increase this will depend on whether or not she was asked to declare if it had ever been a write off.

See if there is any mention of this in the policy docs where details of her car are shown.

If they never asked then dispute the extra they now want.

But if the wrong info was given then they can pursue for the money that should have been paid.

vaio

Quentin wrote: »

The car's market value will be affected by it having previously been written off. The settlement value will correctly be less than if it had never been a write off.

Nah, as above, it depends on knowledge

from http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#14

14. vehicles previously "written-off" and then repaired

Most buyers are (rightly or wrongly) put off by the knowledge that a vehicle was previously "written-off", no matter how well it was later repaired – and this can affect its value.

If the policyholder knew the vehicle was a repaired write-off, he/she is likely to have paid less for it. So we are likely to decide that it is not unfair for the insurer to make an appropriate deduction – not more than 20%, unless the insurer can provide good independent evidence for a higher deduction.

But if we are satisfied that the policyholder innocently bought (and insured) the vehicle in complete ignorance of its history, and the repairs were not obviously noticeable, he/she is likely to have paid full price (and a full insurance premium) for it. So we are likely to decide that it would be unfair for the insurer to pay less than the full market value.

chanz4

prove they didn't know

vaio

I assume that generally people tell the truth and I'd guess that in the absence of evidence to the contrary, the FOS would do the same