Paying outstanding premium when car is a write off

dacouch

dunstonh wrote: »

It was but I couldnt find the article specific to car insurance. However, the FOS apply the same principle across the board. Pleased you found the latest one though which verifies the position is the same.

I notice they have included a bit about transferring it to a new vehicle. That is a relatively new statement. I suspect it has come about because of these budget plans starting to cut that option out.

So, things are nice and clear now. You are expected to pay the premium but you can transfer to a replacement vehicle. Nothing to complain about.

The new stance (Note for general public they used to adopt the stance Dunstonh quoted) means the Insurer needs to allow the customer to cover their new car on the policy subject to any normal extra premium. If this is not offered by the Insurers an "Official Complaint" and then complaint (If needed) to FOS should enforce the Insurers to offer cover for the new car (Assuming it's a car they would normally cover)

It states there will be no refund of premium but if the Insurer does not give their client the option to cover their new car the Insurer would be going against the FOS advice so a complaint MIGHT result in a refund of the balance of premiums although it might not.

If the Insurer gives the client only fourteen days to find a new car before they cancel with no refund. The FOS might find this unfair although they might not.

It's a relatively new stance from the FOS so they and the Insurers will be testing the water so an "Official Complaint" and then a complaint to the Ombudsman may give the OP a good result and may help Insurers rewrite their Policy wordings in line with the FOS advice etc

vaio

I'd be arguing that if an insurer allows the option to transfer the remainder of the policy then they should give refunds if the option isn't taken up.

Logic being that the reminder of the policy available for transfer has a value and if it isn't used then it's unfair for the insurer to retain it rather than give it back to the policy holder.

dacouch

vaio wrote: »

I'd be arguing that if an insurer allows the option to transfer the remainder of the policy then they should give refunds if the option isn't taken up.

Logic being that the reminder of the policy available for transfer has a value and if it isn't used then it's unfair for the insurer to retain it rather than give it back to the policy holder.

The Ombudsman disagrees with that though.

"Most motor insurance policies are yearly contracts – so the full premium is payable even if the vehicle is written off during the year. If the consumer paid the yearly premium upfront, they will not receive any refund. Or if the consumer was paying the yearly premium by monthly instalments, they must still pay the outstanding instalments after the vehicle is written off."

It would be unusual for an Insurer to go against their policy wording and the Ombudsman guidance notes.

There is an argument now though if the Insurer does not give offer to cover the new vehicle on the policy

vaio

Yep, but that's just the FOS not quite getting there yet, sort of evolution

With a £1k premium and a total loss pay out after six months then there is £500 of premium left, everyone now accepts that the insurer needs to allow that £500 to be used on a replacement car so I can't see how, if it doesn't get used, it can be fair for the insurer to keep it.

I'm sure the FOS will come round eventually, just might take a while