Car Insurance and offer after write off

tekz

Hi and thanks for this forum,

My car was written off by moving debris on the motorway at the beginning of September, 4 months into my 12 month policy. I lost my 3 years no claims bonus and had to purchase another car after claiming money from the insurer.

Today I noticed I am still paying the premium and phoned them. I was told that I have to continue paying the policy even though I do not have a car insured with them any longer, this is grossly unfair in my mind but seems to be the standard after a fault claim when the vehicle is completely written off. Funny how this is different for non fault claims. If this is what we are paying for with insurance then I should ask to be refunded for all those years I've paid insurance and not had an accident.

Anyway, the reason I am here is because when my car was written off, I called up my insurer at the time to continue getting insured for the same make and model of car, the only difference being the new car was 1 year newer and lower mileage. They said they would not normally insure people with no no claims bonus as mine had been lost with the incident but with enquire with the underwriters regardless, they came back to me and said they would only insure me if I paid £800 extra on top, in cash, immediately. The original premium price was £480.

Naturally I found another insurer. But now they are telling me I have to keep paying this premium I feel I was bullied into this course of action.

Is this legal? Have they made a mistake?

Aren't no claims bonus's dropped at the end of the insurer year not at the time of an 'event' that causes the subsequent loss of points?

I feel I'm getting bent over here. I called up for a refund and now am being told I have to pay £200 upfront tomorrow as I cancelled the direct debit from the financiers advice before the call to the insurers.

Any and all advice is greatly appreciated.

Kind regards,
Will

OnanTheBarbarian

Most of the time if you have a total loss claim, you owe the full year's premiums. Often the premiums you still owe are simply deducted from the write off settlement.

You may have financed the monthly payments with an external finance house like premium credit, in which case your insurers have probably already had all of the premiums (which is why you did not have the outstanding premiums deducted from the write off settlement) but you will still owe the finance co the full whack as they had to pay the insurer the full amount of the premium.

stator

The problem is that your insurance policy was not a monthly insurance policy, it was a yearly policy that you paid for monthly (in arears). So as soon as you took out the insurance you owed them a whole years premium. So they are correct that you must continue to pay the rest of the years premium.
Now since you missed a payment they are entitled to demand the whole outstanding balance that you owe them, which I guess is the £200.

dacouch

Who are the Insurers?

When was the renewal date of the policy?

Aretnap

See the Financial Ombudsman's view here

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#17

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.

When an insurer declares a vehicle a write-off, we expect it to offer a consumer the option of bringing a replacement vehicle onto the insurance policy so that the remainder of the policy term can be used. Depending on the make and model of the replacement vehicle, an additional premium may be required by the insurer. This should be calculated on a pro rata basis for the remainder of the policy term.

It's perfectly standard that if you cancel an insurance policy after having made a claim on it, you don't get any refund on your premium, or that you still owe the balance of the premium if you were paying by installments.

The ombudsman does expect the insurer to allow you to transfer the balance of the policy to your new car, which they've done. I would expect a small adjustment in the premium to take account of the fact that the new car is not exactly the same as the old one (presumably it's worth slightly more). What strikes me as questionable is re-rating the policy from scratch to take account of the lastest accident, rather than just charging you the extra you'd have paid had you had the new car at the start of the year, and trebling your premium as a result. After all if the car had been repairable after the claim they would not have immediately increased your premium - that doesn't come until renewal time. Admittedly the ombudsman's guidance isn't 100% clear on that point, but it does seem to imply that only the make and model of the new car should be taken into account. I'd have thought a complaint on those grounds was worth a try. You'd have to make a formal complaint under your insurer's own procedures first, then escalate to the ombudsman in you're not happy with their response.

Incidentally are you sure you lost all 3 years NCB? The usual practice is to reduce it by 2 years per claim, so unless your insurer has an unusual approach you should still have one year left.

stator

Aretnap wrote: »

See the Financial Ombudsman's view here

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#17


It's perfectly standard that if you cancel an insurance policy after having made a claim on it, you don't get any refund on your premium, or that you still owe the balance of the premium if you were paying by installments.

The ombudsman does expect the insurer to allow you to transfer the balance of the policy to your new car, which they've done. I would expect a small adjustment in the premium to take account of the fact that the new car is not exactly the same as the old one (presumably it's worth slightly more). What strikes me as questionable is re-rating the policy from scratch to take account of the lastest accident, rather than just charging you the extra you'd have paid had you had the new car at the start of the year, and trebling your premium as a result. After all if the car had been repairable after the claim they would not have immediately increased your premium - that doesn't come until renewal time. Admittedly the ombudsman's guidance isn't 100% clear on that point, but it does seem to imply that only the make and model of the new car should be taken into account. I'd have thought a complaint on those grounds was worth a try. You'd have to make a formal complaint under your insurer's own procedures first, then escalate to the ombudsman in you're not happy with their response.

Incidentally are you sure you lost all 3 years NCB? The usual practice is to reduce it by 2 years per claim, so unless your insurer has an unusual approach you should still have one year left.

That's very interesting. It's definitely worth making a complaint about the fact that they increased your premium because of the accident