RAC Advice Please

4Kings

This is a bit of a long story so apologies in advance!
I have an issue with RAC car insurance that I hope you can help me with or shed some light on?

When my 18 year old's car insurance renewal came through at the beginning of December it was in excess of £3,000, I was also surprised to see that it stated that both claims on the policy showed TBC even though one was in Feb 2014 and the other August 2014, so I made some enquiries and found a new, more reasonable, quote.

I called RAC to cancel his insurance and was told that this could not happen because there was an "outstanding balance" on the account, although the advisor could not see what it referred to and why it had suddenly come up on our account. He thought it may have something to do with a claim so I explained that the fault claim in February had been confirmed as a write off and had been paid and that the no fault claim in August had also been paid and as far as we were aware both had been settled. I told the advisor that as far as I was concerned my relationship with RAC was over, we had paid our premiums as requested, had not concealed or withheld any information and that more importantly we had never been made aware of any amount outstanding.

In early May when I contacted RAC to inform them that my son had passed his test and now held a full license. I was told that this would cost us an extra £1354 for the 8 months until the end of the policy, when I said that I was surprised that it was so high and that I would cancel the policy and go elsewhere, I was told that, due to the fault claim and the fact that the car was a write off, there would be no refund of the premium already paid, even though we were only 3 months into the policy as the company would need to recover its losses, so we agreed to pay the premium and remain with the company.

I am therefore perplexed to return from our Christmas break to find a letter from RAC making reference to a recent letter, never received, stating that we have an outstanding balance of £886.17 and if we do not make contact then the "balance" will be passed to a debt collection agency.

Can they just add a random account to the end of a policy and demand payment??? Any advice gratefully received - thanks

dacouch

Have you asked them to cancel the policy or have you informed them you do not wish to renew?

Was the policy in your name or your sons?

Quentin

Did your son remain as a named driver?

If so have you been paying the increased premium?


Did they deduct your excess from the write off, and did you pay them your excess for the no fault claim (assuming they dealt with it)?

4Kings

Thanks for replies - just recovering after horrid virus
The policy was in my daughter's name with my son as the named driver!!
We didn't try to cancel the policy, just said that we did not want to renew - saving ourselves £2,400.
We paid the increased premium in full when our son passed his test. No excess deducted - all dealt with by another company called Incident Management Solutions ( therein lies another tale that could take pages and pages to explain!!)

InsideInsurance

Insurers cannot just make up random amount and charge you them. RAC are a Broker not an insurer and these days is a rebadge of Budget but brokers cannot just charge you random amounts either.

Clearly you need to register a complaint that they cannot explain what the amount is and that as far as you are aware its fully paid up. They should then investigate and come back to you with an explanation

David_InsDef

And given that the left hand very rarely knows what the right hand is doing in these places, you should request that they confirm that no further action will be taken re. the outstanding amount whilst its validity is being investigated as part of your complaint.

The last thing you want is these people screwing up your credit-worthiness.

InsideInsurance

David_InsDef wrote: »

The last thing you want is these people screwing up your credit-worthiness.

Insurers dont report to the CRAs and given the insurer has 8 weeks to deal with the complaint there is no chance of it being passed to debt collectors, their doing their job, them deciding to issue, the judgement being gotten and the 30 days have passed for it to be passed to the CRA whilst the complaints handled

David_InsDef

InsideInsurance wrote: »

Insurers dont report to the CRAs and given the insurer has 8 weeks to deal with the complaint there is no chance of it being passed to debt collectors, their doing their job, them deciding to issue, the judgement being gotten and the 30 days have passed for it to be passed to the CRA whilst the complaints handled

It depends on how the OP paid his premium. If it was on instalments, it will have been via BISL's in house finance and they do report to CRA's.

Also, insurers do report to CRA's - how do you think Aviva get to use individuals' credit records in their rating rather than publicly available data? Because they provide / underwrite their own finance and write data back to the CRAs under the reciprocal agreements, they get to utilise the full CRA records for risk selection and pricing - ditto Admiral and DLG. Ageas are going the same way also. It's pretty well known that they're not really interested in instalment income, hence some of the ridiculous APRs - it's just a way of accessing consumers' personal credit data.

The following is from the Aviva privacy statement

In assessing your application, to prevent fraud, check your identity and to maintain its policy records, the insurer may:Search files made available to it by credit reference agencies who may keep a record of that search. The insurer may also pass to credit reference agencies information it holds about you and your payment record.

**edit - also, nowadays CCJs are written to CRAs pretty much on the day of judgement and if it's subsequently settled within 30 days then it's removed.

InsideInsurance

David_InsDef wrote: »

It depends on how the OP paid his premium. If it was on instalments, it will have been via BISL's in house finance and they do report to CRA's.

Also, insurers do report to CRA's - how do you think Aviva get to use individuals' credit records in their rating rather than publicly available data? Because they provide / underwrite their own finance and write data back to the CRAs under the reciprocal agreements, they get to utilise the full CRA records for risk selection and pricing - ditto Admiral and DLG. Ageas are going the same way also. It's pretty well known that they're not really interested in instalment income, hence some of the ridiculous APRs - it's just a way of accessing consumers' personal credit data.

The following is from the Aviva privacy statement

In assessing your application, to prevent fraud, check your identity and to maintain its policy records, the insurer may:Search files made available to it by credit reference agencies who may keep a record of that search. The insurer may also pass to credit reference agencies information it holds about you and your payment record.

I will stand corrected if any insurers do pass info to CRAs on payment but I've never come across one before.

My Motor policy is currently with Aviva and looking at my credit file there is the footprint of the quote but there is no account or payment information despite paying by installments.

Certainly when I introduced credit rating for another insurer they were buying the credit score from Experian (just the basic number which everyone here complains about as being a random number that no one else sees) but were not passing payment information back to Experian on those given installments.

David_InsDef

InsideInsurance wrote: »

Certainly when I introduced credit rating for another insurer they were buying the credit score from Experian (just the basic number which everyone here complains about as being a random number that no one else sees) but were not passing payment information back to Experian on those given installments.

Some insurers are definitely ahead of the pack when it comes to their dynamic pricing - compared to others. The CRA reciprocal agreements are not unlike CUE in that to enjoy the full data, you also have to be writing data back to them (and of course, be a finance provider in your own right). What I don't know is if the agreements encompass all data (your own example would suggest not) or if they have to write back in certain circumstances - e.g. defaulted or distressed payment plans.

Have you ever come across a data dictionary from the CRAs detailing what data they hold (and sell)? It really is unnerving.

InsideInsurance

David_InsDef wrote: »

Some insurers are definitely ahead of the pack when it comes to their dynamic pricing - compared to others. The CRA reciprocal agreements are not unlike CUE in that to enjoy the full data, you also have to be writing data back to them (and of course, be a finance provider in your own right). What I don't know is if the agreements encompass all data (your own example would suggest not) or if they have to write back in certain circumstances - e.g. defaulted or distressed payment plans.

Have you ever come across a data dictionary from the CRAs detailing what data they hold (and sell)? It really is unnerving.

We werent getting full data, we were happy with just the 0-999 score for what we were doing - actually using it for the rating of the policy rather than if to allow installments or not. We werent ever going to have a telesales agent go in to see the persons full credit history to decide if their premiums should £400 or £440

Typically with almost all companies, the bigger the player you are the more others will bend to you. Aggregators have very standard rules etc you have to obey if you are a local broker wanting to have a go on them. If you are a top tier insurer that isnt on them things suddenly become flexible.

The thing that nearly derailed the credit scoring project was the CRAs reluctance to confirm in writing that the footprint would never impact someone's ability to get credit (was to be noted as "insurance quote"). Verbally no problems, getting it in writing it was like nailing jelly to a wall. Now personally I thought that it was understandable as in 99.9% of cases they are simply a data provider and so cannot say how others will interpret the data but our Exec didnt buy that.