Bike insurance.... grrrrrrrrrr

biscuit1_2

Hi my son had his bike pinched and torched after having it for 3 months, so we made a claim as you do, so he could replace it, he paid £1200 for the bike and after the excess recieved £670, bit of a gut wrench as he worked so hard to get the bike in the first place, now he has decided he wants a car instead so rang up to cancel the insurance as he no longer needs it as he doesnt have a bike. The insurance was £400 for the year, we only had it 3 months so now the insurance company say if we want to cancel it we have to pay the full amount as well as a £50 cancellation fee. Now to me the fact we had to make a claim should be irrelevant as that is what they are in the buisness of "insurance", as far as i am concerned he took the policy to cover him for a year we no longer need the cover so a refund should be appropriate for the period it's no longer needed, now i dont know about you but i dont ever remember getting any money back when i havn't made a claim, so its fair to say i am not a happy bunny as he now has to pay £300 out of his £670 to close the policy, is this normal practise as i feel it's dam right immoral to be honest, on the basis that if you are happy to take money from those that have never made a claim in 30 years (yes thats me) without ever giving a refund then you shouldnt be able to take money for a service you are no longer providing ie for the 9 months that we dont even have a vehicle to insure.

Faith177

It is normal practice insurance is there to pay you out when you have had a claim which they have done. They have honoured their side of the agreement you now have to pay for the service. It will also state in the policy booklet usually that in the event of a claim there is no refund.

Aretnap

It is normal practice I'm afraid. Having made a claim on a policy you can't subsequently cancel it, or at least you can but you won't get any refund, or if you were paying in installments you'll still owe the remaining installments. See the Ombudsman's view here (point 17)

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

What the insurer should do is give him the option of transferring the balance of the policy to his new vehicle, but that would depend on the new vehicle being one they would normally be willing to insure, and a motorbike insurer might not insure cars.

That link also has some information on how the bike should have been valued. What was his excess and what valuation did they put in it? Note that it says that where a vehicle has recently been purchased second hand they're likely to assume that the purchase price was the market value (point 9) though they don't define "recently".

thenudeone

The insurers have met their side of the deal (They paid out on a claim) so you have to meet your side (pay the agreed annual premium).

The insurer quoted a price based on their assessment of risk for a period of 12 months. It doesn't matter whether an incident occurs on the first or the last day of cover, you still have to pay for a year's cover because that's what you agreed to pay for.

That's just the way it is.

If you don't want to do it that way, that's fine, just buy a monthly or daily policy, which means you won't be paying for a period which you aren't covered for, should you have a claim. But, such policies are very expensive compared to a normal annual policy.

biscuit1_2

Nope still wrong because we allow it to be, next you will get life insurance fims telling you you died to early or before the agreed date as specified in the extreamely small print you didnt read. Insurance companies have very highly paid executives who's job it is to work out risk and probability and this will be factured in but ignored as it's a means of ripping the public off and dont be fooled that is what this is Blatent rape for as long as they can get away with it , but hold on these responsible multi-national companies would never do anything like that there far to responsible !!!!!!!!!

Aretnap

Are you looking for any actual assistance, or are you just here to rant?

OnanTheBarbarian

They took your son on as a risk of "will this geezer make a claim over the next 12 months" for a certain premium. The presumption by the insurers is that he would not claim.

Well he did claim and they are entitled to seek the total cost of the risk.

Granted, none of this was your son's fault, but he has to roll with the punches.

Imagine if everybody did what you are wanting to do, i.e. insure a car for 12 months, paying monthly, yet 2 days later, the car gets stolen and burnt out. You claim for the write off and get a payout and then cancel the cover and say you won't pay for any further cover. You would have paid say £15 for 2 days cover and walked away with £2-£3k in write off payment.

I'm no fan of insurers, but your way of working would have the industry bankrupt

InsideInsurance

biscuit1 wrote: »

Insurance companies have very highly paid executives who's job it is to work out risk and probability and this will be factured in but ignored as it's a means of ripping the public off and dont be fooled that is what this is

Very clearly have never had experience with big insurers or CxO grade people in them have you?

I can count on my hands the number of CxO grades in insurance that have come up from an Actuary or Pricing route to be able to work out risks and probability.

Executives are decision makers/ business people and rarely technical experts. They have all manor of people that report in to them that provide the advice and technical knowledge to inform their decisions. Hell, the CEO at one of my prior clients had never even worked for an insurer previously, another came up through IT and then into Ops and then CEO.

Executives arguably are paid relatively average salaries in comparison to other industries with similar turnovers/ profits. That isnt to say it is a very high multiple of what they pay me but they are responsible for a business generating £4b income and £0.5b profit then you arent going to be paying them £60k salary.

OnanTheBarbarian

Yeah but they need to be able to afford your consultancy fees

InsideInsurance

OnanTheBarbarian wrote: »

Yeah but they need to be able to afford your consultancy fees

I do it for the love, not the money but they insist and it would be rude to say no :beer:

Faith177

biscuit1 wrote: »

Nope still wrong because we allow it to be, next you will get life insurance fims telling you you died to early or before the agreed date as specified in the extreamely small print you didnt read. Insurance companies have very highly paid executives who's job it is to work out risk and probability and this will be factured in but ignored as it's a means of ripping the public off and dont be fooled that is what this is Blatent rape for as long as they can get away with it , but hold on these responsible multi-national companies would never do anything like that there far to responsible !!!!!!!!!

You really believe that :rotfl:

A lot of insurers have made massive losses the last couple of years due to claims so how do you explain that?