Car Insurance policy cancelled with immediate effect on policyholder's death

Derventio

shaun_from_Africa wrote: »

As an insurance policy is a legal contract normally between two parties, I don't see how they could keep it going knowing that the policyholder was deceased.
If a named driver was to have an accident or the vehicle was stolen, who could the insurers communicate with over the possible claim?
With the strict laws covering data protection, I wouldn't have thought that they could speak or write to anyone else without the policyholder's permission, something that unless it had been agreed on beforehand would be impossible to obtain.

Thanks Shaun, you raise some good points here. Addressing these in order:

A contract does not automatically end upon death of one of the parties, but would remain against the deceased's estate. Insurance companies who allow a 30-day grace period would deal with the estate's executors in the event of a claim.

The insurer would deal with the executors of the deceased person's estate.

As executors are legally appointed to deal with the deceased's estate, there would be no data protection issue.

All I want ultimately is for all insurance companies to offer the same thing. Some insurance companies offer a grace period for compassionate reasons. I would simply like all insurance companies to do this, and believe it should be enforced.

Derventio

chrisw wrote: »

This is incorrect. You don't have to be the registered keeper at all.

I don't see why the response from a broker would be any different to that from an underwriter, since the broker is just a go between for the insured and the underwriter.

I would have thought it would be the same for the broker to ask the underwriters for a grace period or a transfer to family as it would if the underwriters were approached direct. In fact the broker might have more clout.

Good point Chris. I don't understand why it is a different approach between underwriters and brokers either. My suspicion is that brokers simply cancel the policy because they can't be bothered to administer the change. Easier for them to cancel and presently there is nothing to stop them doing so. It is not fair.

Derventio

Crabman wrote: »

I've seen cases where insurers simply switched insurer to an alternative family member, on payment of an additional premium where they perceived an increased risk.

This would have been a much better approach but was not offered in my case. Makes me wonder if the broker (RAC Insurance) simply couldn't be bothered? Much easier for them to cancel than have to administer - not sure! But ultimately I think it would be a much fairer system if all insurance companies had to offer the same approach. I believe it is the moral thing to do in cases of bereavement which is hard enough to deal with as it is.

Derventio

Quentin wrote: »

Read up on this so you know what to do next time you are involved with insurance when the policyholder dies:



Your broker has mislead you over this 30 day grace!

Thanks Quentin. In what way have they mislead me? I have been involved in the winding up of two estates - one where the insurance company continued the policy for 30 days from the date of death, and this latest one where it has been cancelled immediately. So I know from personal experience (not just what the broker told me today) that insurance companies can give this grace period.

Derventio

BoGoF wrote: »

For legal reasons alone I do see how any type of insurance policy can continue if the policyholder is no longer alive.

And you do not have to be the registered keeper to insure it.

It is done to allow the executors or those dealing with the estate to decide what to do with the car. The insurance policy would remain active with the executors of the estate. It is only fair really as no one knows from the moment a person dies what is going to happen to the deceased's car. A simple grace period gives people time to decide without this unnecessary hassle.

Quentin

Derventio wrote: »

Thanks Quentin. In what way have they mislead me? I have been involved in the winding up of two estates - one where the insurance company continued the policy for 30 days from the date of death, and this latest one where it has been cancelled immediately. So I know from personal experience (not just what the broker told me today) that insurance companies can give this grace period.

You were mislead when told that insurers always give 30 days grace to deceased policyholders.

Check out the correct advice on what to do when a registered keeper died at the DVLA website.

https://www.gov.uk/tell-dvla-about-bereavement/keeping-the-vehicle

You need to acquaint yourself with what to do about the deceased person's cars when you are appointed to sort their affairs!

(Don't rely on this broker of yours for advice!)

System

A named driver cannot be the main driver of a vehicle under an insurance policy, that is known as fronting. Given the main driver died the named driver would now be the main driver of the vehicle thus not in compliance with the terms of the policy.

As others have said, you don't have to be the registered keeper to insure it, it might just make it slightly more expensive. You can also get temporary short term cover from many providers.

Car_54

shaun_from_Africa wrote: »

With the strict laws covering data protection, I wouldn't have thought that they could speak or write to anyone else without the policyholder's permission, something that unless it had been agreed on beforehand would be impossible to obtain.

Data Protection Act 2018, section 3(2):

"'Personal data' means any information relating to an identified or identifiable living individual"

Information relating to a deceased individual is not protected.

Quentin

Tarambor wrote: »

A named driver cannot be the main driver of a vehicle under an insurance policy, that is known as fronting.....

No

Fronting is when the insurer is told that the "lowest risk driver" is the main driver when in fact a bigger risk driver is the main one

Eg a 17 year old child has their parent down as the main driver of a car they actually are the main/ only driver of.

It's unusual for Insurers to insist that the policyholder be the main driver ( and Impossible when the policy holder is a company!)

shaun_from_Africa

Car_54 wrote: »

Data Protection Act 2018, section 3(2):

"'Personal data' means any information relating to an identified or identifiable living individual"

Information relating to a deceased individual is not protected.

Correct, but the DPA covers more than just the information about the policyholder.
Any data relating to the named drivers is still protected and if the contract of insurance was between the now deceased policyholder and the insurance company, that insurance company may still be breaching the DPA by discussing anything about that policy that relates to others as they don't have the policyholders permission to do so.