Insurance Company Witholding Money

TheBlueReptile

Hi all,

For a bit of context, I'm a young driver that was involved in an accident last week. Whether I agree with it or not, I'm being held accountable and as such it's of course my policy that's getting hit with the loss of noclaims and suchlike.

Fair enough, I have no way to prove otherwise so I've had to grin and bear it. However, I received a phone call today from the car valuer. My car is being written off and so she had a few questions about where I bought it from, how much and rough mileage at time of crash (some of such questions I wasn't convinced were entirely necessary).

I was going to challenge her about a courtesy car as my policy documentation clearly stated I was eligible for one while my car was being analysed, but I was told last week that, in fact, my policy didn't allow a courtesy car. However then she through another curveball at me. She told me, rather nonchalantly, that the money still outstanding on my policy WOULD NOT be refunded and I could only use the funds as credit on a new policy with them.

I renewed my policy with them last month and so essentially have 10 full months of insurance that they have my money for. My questions is, can they actually legally withhold my money like this or am I justified in being absolutely dumbfounded and frustrated by this?

My analysis of the situation is that I've only been driving for two years and they're trying desperately to claw back what money they can from me, whilst also ensuring I stay insured with them. It sounds very shady to me though.

All that I'd need to do to get my money back really is start a new policy with them on the acquisition of a new car and then immediately cancel it and go somewhere else. However I fully intend to tell them how out of order this move is if my suspicions are correct and they're playing games with me here.

OnanTheBarbarian

If your vehicle is a total loss then they are entitled to offset any premiums due for the full 12 month policy.

They are expected to cover your next car (subject to it meeting their underwriting criteria - so no Ferrari etc), providing you go to put another car on cover with them within a reasonable period of time, such as 28 days.

All standard stuff

Aretnap

It's quite normal. Insurance is an annual policy, you pay your insurer and in return they agree to cover any claims you make over the course of a year. Once you've made a claim (including a total loss claim) you can't cancel the policy, or at least if you do they don't have to give you any refund on it. (Strictly speaking you have no statutory right to cancel at all after the 14 day cooling off period has passed, though most if not all insurers will allow you to cancel later provided there has been no claim).

What they should do is allow you to transfer the remaining 10 months of the policy to a new car - provided it's a car that under normal circumstances they'd be willing to insure you to drive. Before buying a new car you should check that it's acceptable to the insurer - and whether any additional premium will be payable.

Your wheeze of starting a new policy then cancelling it immediately is unlikely to work - the policy on the new car will last 10 months, and if you cancel within 10 months you won't get a refund either.

Faith177

Standard practice you don't get any money back if you have had a fault claim they use your premium to offset their losses if you look in your policy booklet it normally states this

They are being generous allowing you to change the vehicle some won't even allow that

TheBlueReptile

Thanks for the replies guys. As mentioned, still a fairly new driver so this is all new to me. Am I essentially held to ransom as to what they up my insurance to on the next car, or would they have to honour the policy I've already paid for if I got a like-for-like car?

dunstonh

Am I essentially held to ransom as to what they up my insurance to on the next car, or would they have to honour the policy I've already paid for if I got a like-for-like car?

You will be subject to their underwriting criteria based on your circumstances. No more. No less. So, a pricing change is almost certainly going to happen unless you get exactly like for like.

EdGasket

It will most likely go up anyway as you have made a claim now and are considered higher risk.