car insurance - retrospective increase

roonaldo

DELETED USER wrote:

They can't make her pay more retrospectively for last year's policy. That contract is finished, she didn't claim on it anyway so they haven't lost out. Argue it with them and if they persist involve the ombudsman.

Not strictly true. Premiums are reflected with the information disclosed to them at policy inception and throughout the life of the policy, and at renewal. Premiums are based on risk, the drivers details, the car being driven, the area you live in, the amount of miles driven etc etc.

Making a false declaration to obtain insurance is an offence. Failure to notify of material changes (like a motoring offence) is also a requirement under the terms of the policy.

With your logic, you can say you are age 60, nil points, drive 1000 miles a year, park the car in garage and thats fine as long as long as the policy has finished.

It is an offence under the road traffic act.

s.174 (5) (a) Road Traffic Act 1988

QUOTE
(5) A person who makes a false statement or withholds any material information for the purpose of obtaining the issue—
(a) of a certificate of insurance or certificate of security under Part VI of this Act, or
(b) of any document issued under regulations made by the Secretary of State in pursuance of his power under section 165(2)(a) of this Act to prescribe evidence which may be produced in lieu of a certificate of insurance or a certificate of security is guilty of an offence.

The insurer can restropectively void the insurance, this will increase future premiums. Cancelling the DD is missed payments will just go on the credit file.

It would be wise to just pay up and disclose material information in the future.

thenudeone

DELETED USER wrote:

The previous contract is concluded,

The previous contract was breached by the policyholder by failing to disclose (when specifically asked) material facts.

In such cases the insurer can be entitled to void the policy from inception (which has to be declared for life, and which many insurers will treat as a "do-not-quote" flag).

Paying the premium which should have been paid in the first place is the best of all possible outcomes from this.

If you think the law means that people can get away with mis-representing the risks when buying an insurance policy, you're wrong.

Just search "non-disclosure" at http://www.financial-ombudsman.org.uk/

Quentin

roonaldo wrote: »

Not strictly true.........

No. [DELETED USER] is completely "strictly untrue"!

As others have posted, his "advice" in this forum is the good reason why we are all warned at the top of the page "this is an open forum - anyone can post. Please exercise caution......"

antrobus

A point for discussion....

The Consumer Insurance (Disclosure and Representations) Act 2012 states that an "insurer has a remedy against a consumer for a misrepresentation made by the consumer before a consumer insurance contract was entered into" and sets out the various remedies available in Schedule 1.

Assuming that the OP's case is one of "careless representation" Schedule 1 says;

6. If the insurer would have entered into the consumer insurance contract, but on different terms (excluding terms relating to the premium), the contract is to be treated as if it had been entered into on those different terms if the insurer so requires

7. In addition, if the insurer would have entered into the consumer insurance contract (whether the terms relating to matters other than the premium would have been the same or different), but would have charged a higher premium, the insurer may reduce proportionately the amount to be paid on a claim.

http://www.legislation.gov.uk/ukpga/2012/6/schedule/1/enacted

I can't see anywhere where the Act gives the insurer the remedy of actually charging more for the insurance retrospectively.

The Act came into force on the 6th April 2013, it might or might not apply to the OP's daughter who took out insurance "last year", and I am not a lawyer, I just read stuff. I'm just saying that's all.

Quentin

antrobus wrote:

I can't see anywhere where the Act gives the insurer the remedy of actually charging more for the insurance retrospectively.....

Your quotes (6 & 7) refer to the handling of claims following misrepesentation (nothing to do with this thread's issue over the premium being wrongly calculated based on false information from the OP's daughter)

antrobus

Quentin wrote: »

Your quotes (6 & 7) refer to the handling of claims following misrepesentation (nothing to do with this thread's issue over the premium being wrongly calculated based on false information from the OP's daughter)

No, I have cited certain sections of Schedule 1 of the Consumer Insurance (Disclosure and Representations) Act 2012 which appears under the heading Insurers’ remedies for qualifying misrepresentations. Section 4 of the Act specifically states that "The only such remedies available are set out in Schedule 1."

And I can't see anything in Schedule 1 that gives the insurer the remedy of retrospectively increasing the premium in the event of a misrepresentation being discovered. Which is odd, because I expected it to say something like "if the insurer would have entered into the consumer insurance contract, but would have charged a higher premium, then the insurer may require the consumer to pay the higher premium". But it doesn't.

antrobus

I also stumbled across the following;

Insurers 'Charge Retrospectively for Customer Speeding Fines'
http://www.money.co.uk/article/1001069-insurers-charge-retrospectively-for-customer-speeding-fines.htm

It dates back to 2008, but nevertheless might be relevant as it appears that Diamond have a policy of retrospectively charging on car insurance for non-disclsoure. However, despite their claim that this policy was supported by the Financial Ombudsman, the FOS is quoted as saying "A non-disclosure problem without a claim is a very unusual scenario. We have not issued any guidance on this specific set of circumstances."

The article also quotes the opinion of one Michael Whitton, a solicitor at law firm Edwin Coe, "I do not consider Diamond has an entitlement to recover premiums for previous policy years where they say premium would have been higher had it been aware of material facts which were not disclosed."

Quentin

antrobus wrote: »

No, I have cited certain sections of Schedule 1 of the Consumer Insurance (Disclosure and Representations) Act 2012 which appears under the heading Insurers’ remedies for qualifying misrepresentations........

You "cited" sections 6 and 7.

But as posted, they deal with claims following misrepresentation.

As set out in section 3, quoted in full:

3 If the qualifying misrepresentation was careless, paragraphs 4 to 8 apply in relation to any claim.

roonaldo

Quentin wrote: »

No. [DELETED USER] is completely "strictly untrue"!

Yeah just trying not to be antagonistic

As others have posted, his "advice" in this forum is the good reason why we are all warned at the top of the page "this is an open forum - anyone can post. Please exercise caution......"

A bit patronising, but as you say this is an "open forum".

Aretnap

Quentin wrote: »

You "cited" sections 6 and 7.

But as posted, they deal with claims following misrepresentation

Yes, but the act applies to misrepresentation generally. And it states (in section 4 (3)) that the only remedies for misrepresentation available to the insurer are those set out in Schedule 1. So where does Schedule 1 entitle an insurer to backdated premiums where no claim has been made? Or alternatively, where does the insurer's right to a remedy not included in Schedule 1 come from?