Swinton Car Insurance problem

chrwil

My partner had her car insured through Swinton. Her actual insurance company was MMA. So basically Swinton paid the premium and she then paid them monthly. Her car was stolen in July. After about 1 month the insurance company agreed to pay her £6000. She then cancelled her direct debit with Swinton. I advised her against this but she did it anayway. The cheque was supposedly sent out on 05/10/07 but we haven't received it. She has now had a call from Swinton saying they have the cheque and will not send it on to her until she pays the FULL amount of the premium. Which is around £500.

Are they legally allowed to with hold a cheque like this? Basically holding it to ransom. Also, why would they want the fuill amount? I recently cancelled my motorbike insurance as I am looking to sell it and was told I'd need to pay a cancellation fee (about £25) to stop my insurance. They didn't want the whole of the amount.

Any response would be greatfully appreciated.

raskazz

chrwil wrote: »

My partner had her car insured through Swinton. Her actual insurance company was MMA. So basically Swinton paid the premium and she then paid them monthly. Her car was stolen in July. After about 1 month the insurance company agreed to pay her £6000. She then cancelled her direct debit with Swinton. I advised her against this but she did it anayway. The cheque was supposedly sent out on 05/10/07 but we haven't received it. She has now had a call from Swinton saying they have the cheque and will not send it on to her until she pays the FULL amount of the premium. Which is around £500.

Are they legally allowed to with hold a cheque like this? Basically holding it to ransom. Also, why would they want the fuill amount? I recently cancelled my motorbike insurance as I am looking to sell it and was told I'd need to pay a cancellation fee (about £25) to stop my insurance. They didn't want the whole of the amount.

Any response would be greatfully appreciated.

Firstly, the full outstanding premium is due because a total loss claim was made on the policy. This is standard - it's probably obvious in hindsight, but you should really have let the policy and Direct Debits run, then change the vehicle covered under the policy to your replacement.

The full annual premium was not due on your bike policy as, presumably, a claim was not made under it.

It's a bit odd that they are withholding the cheque though - I would have thought that they could just send a cheque for the original amount minus the outstanding premiums.

DaisyFlower

Cancelling a policy with a claim on it renders the whole premium due. Send them a letter asking them to deduct the amount owed from settlement and they should release the cheque.

mattymoo

DaisyFlower wrote: »

Cancelling a policy with a claim on it renders the whole premium due. Send them a letter asking them to deduct the amount owed from settlement and they should release the cheque.

Takes a while though. The insurers will insist on having the original cheque back before issuing the new one. Quickest option is to hand over £500 of the folding stuff and pick up the cheque and bank it.

chrwil

Thanks everyone. In the end she just paid the £500 and they have said they will send the cheque to her.

Insurance really gets on my nerves, he car was stolen from our drive because someone broke into our house and took her keys. Now though, she will have no no claims, even though it wasn't an accident or her being careless.

I've always thought it would be a good idea for the government to set up an insurance company. They could charge less, making more money for the country and also generate more jobs. The only downside being that if they undercut all other insurance companies then they would go out of business, making people jobless. But based on how rude they have been to my partner, I wouldn't care!