Car write off issues

irishpride988

Hey guys.

Im at a complete loss here, last month a third party crashed into my parked unattended car causing it to be written off. I have received an offer off around £2000 which I accepted, my insurance company had kept £1000 to cover the cost of my remaining policy.

After being refused to be insured onto my new car because the underwriter demanded I held my licence for 3 years I have canceled to policy. Im also being told they don't have to refund me the 5 months, 'because I used the policy. Even though after speaking to the recovery team the third party insurance has admitted liability and my insurance can reclaim the cost. Is this correct the don't have to repay me the 5 months I'd they can reclaim it from the third party?

Who is right and what can I do?

Thank you.

foxy-stoat

You are stuffed I am afraid.

You should of claimed directly from the Third Party Insurers and not your own insurers....and you should of inquired about your replacement car before buying it.

irishpride988

I did claim directly from the third party insurance. I didn't claim on my own.

foxy-stoat

But you mentioned that your insurers can re-claim off the third party insurers....so your insurers paid out as they wouldn't of been able to deduct the £1000 for the policy premium, the cheque would of gone straight to you.

irishpride988

Im unable to post a link to this paragraph on my policy but it says as following. "If your Car is declared a Total Loss, and you’ve already paid the premium in full, no refund will
be made for the Car in question, even if the cover for the Car is later cancelled. This may not
apply if your Insurer is able to recover all losses from a Third Party. In this case Insurers may
sometimes refund the Premium paid and, if they do, we‘ll pass that refund on to you.". Have i misinterpreted this?

foxy-stoat

irishpride988 wrote: »

Im unable to post a link to this paragraph on my policy but it says as following. "If your Car is declared a Total Loss, and you’ve already paid the premium in full, no refund will
be made for the Car in question, even if the cover for the Car is later cancelled. This may not
apply if your Insurer is able to recover all losses from a Third Party. In this case Insurers may
sometimes refund the Premium paid and, if they do, we‘ll pass that refund on to you.". Have i misinterpreted this?

You best find out how much they would of refunded you if you didn't have a total loss then, and hound them every week to know when they recover their losses from the third party insurers and pressure them for the refund.

What does your policy say about mid-term cancellations?

jimbo6977

Insurer can indeed consider the policy fulfilled once the insured item (the car) is declared a total loss. At this point the full year's premium is due with no refund if paid in advance. Some insurers may allow the policy to continue in respect of a replacement vehicle but this is entirely a matter of goodwill.

irishpride988

I found these two different paragraphs on my policy:

If your Policy is cancelled or if you remove a Car from a Multi Car Policy, your Insurer won’t
refund a Premium where a non-recoverable claim has been made on the Car or any
replacement Car during the Period of Cover. In this case, if you’re paying by instalments under
a loan arrangement, you’ll have to pay the balance of the loan agreement and our cancellation
fee (if it’s 14 days or more since your Policy started). You’ll also have to pay any interest and
fees due under your Consumer Credit Agreement.


• If the Primary Policyholder or we cancel the Policy at any other time, we‘ll refund the
part of the Premium on a pro rata basis for the Period of Cover that hasn’t been used for
each Car, minus our after 14-day cancellation fee and our other non-refundable fees.

Surely this means that if I cancelled my policy while paying monthly and no claim was paid out against me I do not have to pay the rest of the contract? Just for what I've used? So what makes it different if my car was written off shouldn't they refund my 5 months that they had taken on my write-off payout? Especially as I claimed of the third party insurance and not my insurance? Which they can claim back?

Thank you.

Aretnap

jimbo6977 wrote: »

Some insurers may allow the policy to continue in respect of a replacement vehicle but this is entirely a matter of goodwill.

No it isn't. The Ombudsman has been pretty clear that insurers are required to allow the policy to continue on a replacement vehicle, regardless of what the terms of the policy actually say. See here (I've linked to an old version of the guidance as the current version has been made more "user friendly"by having had most of the information removed, but AFIAK the underlying policy is still the same.

Financial_Ombudsman wrote:

When an insurer declares a vehicle a write-off, we expect it to offer a consumer the option of bringing a replacement vehicle onto the insurance policy so that the remainder of the policy term can be used. Depending on the make and model of the replacement vehicle, an additional premium may be required by the insurer. This should be calculated on a pro rata basis for the remainder of the policy term.

The OP's problem is that he seems to have bought a new car which his insurer would not normally agree to cover him to drive, which renders this rule redundant. With hindsight it would have made life easier if he'd checked this before he bought the new car, but it's a bit late for that now.

irishpride988 wrote: »

Surely this means that if I cancelled my policy while paying monthly and no claim was paid out against me I do not have to pay the rest of the contract? Just for what I've used? So what makes it different if my car was written off shouldn't they refund my 5 months that they had taken on my write-off payout? Especially as I claimed of the third party insurance and not my insurance? Which they can claim back?

Again this doesn't make sense - you're obviously confused about whether you made the claim through your own policy or through the third party's policy. If you claim off the third party's insurance then your own insurer can't subsequently reclaim anything - because they haven't paid anything out! So you need to find out where the money you were paid actually came from. Either

(a) You made the claim via the third party, you will have received a settlement offer and cheque (or bank transfer) from the third party insurer, in which case there is no claim against your policy and your insurer should allow you to cancel as if you had never made a claim at all. If this is the case you sould complain immediately, though I suspect it is not the case as if it were your insurer would not have been able to deduct anything from the settlement - they would never have seen the money in the first place.

or

(b) You made the claim through your own insurer, resulting in a claim on your policy, meaning that they deducted the outstanding premiums from whatever they paid you. They will reclaim the money from the third party's insurer, but this will take time - and until they do you still have a claim on your policy. When the third party's insurer do settle I would argue that your insurer should refund you the £1000 - but that could take a matter of months rather than days. I would suggest that you keep hassling your insurer over this, and make a complaint if they don't refund you the money once the claim is settled.