Student insurance policy premium

wundress

Hi

A friend of mine recently had an accident which was not her fault and the other side have offered to settle. She has accepted the offer but when it went through the insurance the insurer said that the policy she had been on had been discounted because she was a student at the time of taking it out.

They are saying that since she is no longer a student and because she failed to inform them of that she must pay £500 more to cover the extra premium. The insurer is saying they will take the money out of her compensation.

I have looked at her documents for her and nowhere does it mention that it is a discounted rate for being a student. She also says she was not told she was having a discounted rate for being a student. In fact, she was only a student for one further month after taking out the policy. The policy documents give a list of changes the policy holder must inform them about but change of occupation is not listed.

Can the insurer now claim this money or must it have been made clear on the documents that this was a discounted rate for students?

InsideInsurance

This doesnt make sense

If the third party has offered to settle how are her insurers going to deduct anything from it?


Insurance is a rated product, you tell them your current situation and they price it for you. If your situation changes during the course of the policy you are required to inform them of the change and they will rerate the policy based on the new circumstances and adjust the premiums accordingly.

There doesnt need to be anything about a "discount", which is arguably not really the right word to use, there will however be a section on having to inform them of changes and it is this you need to read and find out if change in employment status meets their definition of something you must inform them of immediately.

Aretnap

Which insurer is it?

wundress

It's Endsleigh

wundress

InsideInsurance wrote: »

This doesnt make sense

If the third party has offered to settle how are her insurers going to deduct anything from it?


Insurance is a rated product, you tell them your current situation and they price it for you. If your situation changes during the course of the policy you are required to inform them of the change and they will rerate the policy based on the new circumstances and adjust the premiums accordingly.

There doesnt need to be anything about a "discount", which is arguably not really the right word to use, there will however be a section on having to inform them of changes and it is this you need to read and find out if change in employment status meets their definition of something you must inform them of immediately.

What I meant is that the claim has gone through the insurance companies and the other side has agreed that they are at fault and have offered a sum of money. Endsleigh are saying that they will deduct the extra premium from the compensation before paying it out to my friend.

"Discount" is the word the customer service representative used when explaining it to my friend. The other problem is that when my friend informed them of the change of occupation during a change of vehicle rerate the customer services did not update the record. They said there would be an £80 increase for changing the vehicle but did not mention that the change of occupation would result in another increase to the premium. It was only two days later that they rang to say a further £500 was required.

Have just been on the phone to another department who are now saying that they need to listen to the call where they were informed of the change in occupation. I used to be with Endsleigh myself and it seems their customer service skills have not improved!

wundress

How would we find out if change of occupation is something that must be notified? The accompanying policy booklet states that one must inform of change of vehicle, change of address, change of driver and driving abroad. It does not specifically mention occupation. However, when I raised this with Endsleigh they said a change of any information must be reported and that the policy document only backs up the statement of insurance.

InsideInsurance

wundress wrote: »

What I meant is that the claim has gone through the insurance companies and the other side has agreed that they are at fault and have offered a sum of money. Endsleigh are saying that they will deduct the extra premium from the compensation before paying it out to my friend.

"Discount" is the word the customer service representative used when explaining it to my friend. The other problem is that when my friend informed them of the change of occupation during a change of vehicle rerate the customer services did not update the record. They said there would be an £80 increase for changing the vehicle but did not mention that the change of occupation would result in another increase to the premium. It was only two days later that they rang to say a further £500 was required.

Have just been on the phone to another department who are now saying that they need to listen to the call where they were informed of the change in occupation. I used to be with Endsleigh myself and it seems their customer service skills have not improved!

I still dont think you are getting the whole story, if you claim from the third party insurer rather than your own insurance then the TPI pays the money directly to you and so its never in your insurers hands to deduct anything from it.

If you claim off your own insurance then your insurers can deduct the outstanding premiums due from a total loss settlement but that has nothing to do with the TPI.

She needs to register a complaint to say she gave her change of vehicle and change of occupation and was told it was an additional £80 premium which presumably she has already paid. As they have said though, they will listen to the call to see if this is what was said and so if its their mistake or hers.

If she is mistaken rather than them then the rerated premium will be payable.

InsideInsurance

wundress wrote: »

How would we find out if change of occupation is something that must be notified? The accompanying policy booklet states that one must inform of change of vehicle, change of address, change of driver and driving abroad. It does not specifically mention occupation. However, when I raised this with Endsleigh they said a change of any information must be reported and that the policy document only backs up the statement of insurance.

Insurance law has changed, historically insurers were able to rely on principles and the consumer was expected to to inform the insurer of anything thats "material".

Inevitably the problem is that most people have little idea about insurance so dont have a clue what is actually material or not and so there were a lot of complaints and other issues.

Now if an insurer wants to know something they must explicitly ask and increasingly the ombudsman are allowing very lose interpretations of questions by the insured as acceptable (eg someone had £100,000 of jewelry but asked how much they wanted to insure their jewelry for they said £10,000. Insurer originally declined aclaim saying they had under declared their value but the FOS upheld the complaint saying the question wasnt how much do you own but how much you want insured and the policyholder wanted £10,000 insured)

If they have a list of explicit circumstances only and it isnt included they will be hard pressed to say she had to tell them earlier but she has now told them so it becomes a bit of a moot point.

OnanTheBarbarian

Is the other party insured through Endsleigh too?

wundress

InsideInsurance wrote: »

I still dont think you are getting the whole story, if you claim from the third party insurer rather than your own insurance then the TPI pays the money directly to you and so its never in your insurers hands to deduct anything from it.

If you claim off your own insurance then your insurers can deduct the outstanding premiums due from a total loss settlement but that has nothing to do with the TPI.

She needs to register a complaint to say she gave her change of vehicle and change of occupation and was told it was an additional £80 premium which presumably she has already paid. As they have said though, they will listen to the call to see if this is what was said and so if its their mistake or hers.

If she is mistaken rather than them then the rerated premium will be payable.

Unfortunately, my friend isn't really very savvy on these things and I think this is part of the problem. The insurance isn't clear on what "changes affect your motor policy" and so she didn't think to tell them.

Whenever she has to deal with the insurance company she gets so nervous and worked up that the information being passed back and fore gets confused. She doesn't really understand how the process works.

I spoke to the insurer and they said that the other side have agreed £2100 for damage to the vehicle. The cheque was sent to my friend's insurer. The insurer is now only going to pay my friend £1200 out of that because they are deducting the excess and the extra premium. The insurer says they will then claim the excess from the other side but at the moment the other side are denying liability. The insurer says they will pass on the excess if they are successful in recovering it.

My friend says she informed the insurer of change of occupation at the time of making the claim. When she then changed her vehicle a few days later they asked if any of the insurance details had changed. She did not have the policy in front of her and so did not know if anything had changed and said nothing had changed. She assumed that when she had made the claim and told them of the change this would have been updated on her policy. The insurance was therefore not rerated at this point.
The insurer now says that the claims dept would not have updated the records and it was only when the discrepancy became apparent in the claims dept that it was raised with my friend.

Endsleigh are saying that "any" change must be notified. The representative kept saying she was given a student discount and when I picked him up on it all he said they don't have to tell customers of every discount or be specific about how the premium was calculated. When I pointed out that if there was a discount in a shop a customer would expect to be told about it he said "perhaps discount was a poor choice of word" and went on about how it isn't really a discount.

How the heck is anyone supposed to understand the process or their terms? It seems the systems are designed to confuse people and that there is a total lack of transparency.

InsideInsurance

If the excess has been deducted then she has simply claimed off her own policy.

The third party is liable for the incident and so her insurers will make a counter claim under their subjugated rights for their outlay against the TPI but that is moderately irrelevant to her.