Car insurance cancellation con.....!!!!!

vaio

k3lvc wrote: »

Scam ?? Why exactly ?

motorguy wrote: »

Hows that a scam?

Person insures car, car gets written off, insurance company pays out, insurance cancelled as car is written off?.......

"Scam" has implications of criminality to me so I won't use it but there is certainly a fairness (in the FOS sense) argument about policies being cancelled on a total loss.

How about when I bought my policy I paid for 365 days of cover against liability to third parties? Given that TP liability makes up the vast majority of most peoples premiums then how can it be fair to lose that cover just because I have a total loss pay out?

How about it unfairly penalises young/poor people? I dent a wing on my car and it just gets repaired, my offspring dents the wing on his low value car and not only does the car get written off but he also loses the 360 days remaining on his policy which, as noted above, cold well be much more valuable than the cost of the repair or even the value of the car.

How about an unscrupulous insurer (perish the thought) uses the profit from an ended policy when assessing whether to write a vehicle off? "If we fix this wing then it costs us £300 and we have to continue to provide cover for the remaining 360 days of the policy. If we write it off then we have to pay out £800 as a total loss but we get to keep the £2k remaining on the policy"

Be interesting to see a case like this go to the FOS

AdrianC

vaio wrote: »

"Scam" has implications of criminality to me so I won't use it but there is certainly a fairness (in the FOS sense) argument about policies being cancelled on a total loss.

So read through the Ts & Cs of a policy before you buy it, and if it's one of the ones which does that, then don't buy it. Buy from somebody else who doesn't.

Although, it has to be said, "Don't write your car off" does have a lot to recommend it. Remember, this will only apply if YOUR insurance are paying out - ie, you are to blame or the person who is to blame is uninsured or untraceable. OK, you can't do much about that last scenario, but I'd suggest that's very much a minority compared to young drivers writing their own cars off.

InsideInsurance

vaio wrote: »

How about when I bought my policy I paid for 365 days of cover against liability to third parties? Given that TP liability makes up the vast majority of most peoples premiums then how can it be fair to lose that cover just because I have a total loss pay out?

Technically you paid for 365 days of cover against liabilities to third parties as a result of you either (a) driving your car or (b) being the owner of your car.

This effectively becomes frustrated when you no longer own your car because neither a or b apply any more.

Actually there is a (c) which many will have which is the Driving Other Cars section but can you maintain DOC when there is no "not other" covered any more? Plus if the main policy continues then there is still an RTA insurer issue on if the t/l car goes back on the road.

To the FOS's view, I know others have mentioned that they feel the PH should be able to switch residual cover to another vehicle subject to underwriting criteria, adjusted premiums and any admin fees. I havent seen this personally so just requoting others from here.

vaio

yep, I've seen the FOS view that you should be able to switch the remainder to another car which would tend to indicate that they would frown on a policy that ended on a total loss.

It's part of s17 in their valuation paper http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#17

roonaldo

Car insurance is an annual policy

thor

motorguy wrote: »

20 years ago you'd have paid £500 for the policy in the first place, and maybe got £200 back when cancelling early.

It does seem we cant have our cake AND eat it - cheapest policies AND most generous terms.

Do you really think that the equivalent £300 policy today would have cost that much more 20 years ago? Given how much premiums have rocketed the last few years, I would say the op would have had to pay far less all circumstances being equal. And that is even neglecting the effects of inflation.
I own a similar car to the one I had in the early nineties and am living at the same address and am paying more than double what I did then. You could say that the car makes a big difference but both are standard run of the mill family vehicles AND I am now waay past young driver status with decades of no claims bonus compared to zero then. I'm sorry but for the majority of us car insurance is not cheap and has not been for years with the terms being far more stingy.

InsideInsurance

thor wrote: »

Do you really think that the equivalent £300 policy today would have cost that much more 20 years ago? Given how much premiums have rocketed the last few years, I would say the op would have had to pay far less all circumstances being equal.

The problem is that you cannot judge these things by a single policy as areas go up and down in crime, you cannot do a like for like on vehicle to 20 years ago etc.

That said, I would agree that premiums have overall gone above inflation increases as agreed by the AA price index (http://www.theaa.com/newsroom/bipi/201404-bipi.pdf see page 11)

This however has been driven by claims inflation on third party claims and motor insurers in particular are making much less profit than they were 20 years ago (if any at all).

If you look at the Home prices on the same index these have gone up way below inflation as they havent had the same claims issues.