Car written off - insurer reducing settlement due to "increased premium"

simpkin

My daughter's car was written off following a no-fault collision (car was parked whilst she was at work). The settlement figure has been proposed, and as she pays the premiums monthly, includes a reduction because the company (no names, no pack drill, but a "Name") are due the residue of the premium. They are, however, claiming that she now owes more than even the full annual premium cost. This is supposedly because they haven't been able to make full recovery so the premium has increased. so instead of owing them e.g. £400 (=£600 - 4 months at £50), they're reducing the payout by £650.

This can't be right surely: the premium is the premium, fixed for the period of the policy, and the amount due to them now is, in effect, the residual value of the up-front loan to pay the annual premium. Any premium increase would come in the calculation of any new policy premium (if full recovery hadn't been made)

Advice? Anyone had similar experience?

Quentin

Whenever you are not happy with your insurance company the route to go down is a complaint in line with their complaints procedure

Then if you are not happy with the reply or they ignore you for 8 weeks you can escalate to the FOS for their adjudication at no cost to you

simpkin

Understood. Just wanted to see if anyone else had experience with this before going in.

Quentin

The extra £250 isn't her excess is it??

simpkin

no, that's been itemised separately.

dacouch

When is the renewal of her policy?

and when was the accident

simpkin

renewal 4 months ago, accident a couple of weeks.

Jumblebumble

simpkin wrote: »

My daughter's car was written off following a no-fault collision (car was parked whilst she was at work). The settlement figure has been proposed, and as she pays the premiums monthly, includes a reduction because the company (no names, no pack drill, but a "Name") are due the residue of the premium. They are, however, claiming that she now owes more than even the full annual premium cost. This is supposedly because they haven't been able to make full recovery so the premium has increased. so instead of owing them e.g. £400 (=£600 - 4 months at £50), they're reducing the payout by £650.

This can't be right surely: the premium is the premium, fixed for the period of the policy, and the amount due to them now is, in effect, the residual value of the up-front loan to pay the annual premium. Any premium increase would come in the calculation of any new policy premium (if full recovery hadn't been made)

Advice? Anyone had similar experience?

There must be a misunderstanding or we are not hearing the whole story
Has something not declared at inception come to light?
Did she discuss the accident with the TP
When you say more than the full premium does this include interest on the "pay by instalments"

Otherwise your insurers could just demand £6500 or £65000
first step is to get them to put in writing what is going on

simpkin

That's as much of the story as I know. When my daughter first queried it, the company said that the premium had increased because "they hadn't recovered their losses". If there is something else, they haven't said yet.

"When you say more than the full premium does this include interest on the "pay by instalments" - yes. The example isn't the actual figures, but gives a good picture. The amount they are taking off the settlement is about the sum of 13 payments, and 4 payments have already been made.
"first step is to get them to put in writing what is going on". That's just what we're doing now. As I said earlier, just trying to get a picture before committing to paper in case someone said - "oh yes, you've forgotten xyz ..."

(In fact, will also be asking for (a) how they came to car valuation as it's at the bottom end of anything we're seen or got back from e.g. Parkers, and (b) the basis on which they've calculated the finance repayment, but I understand the issues around those much more)

snilloct1957

That's as much of the story as I know. When my daughter first queried it, the company said that the premium had increased because "they hadn't recovered their losses". If there is something else, they haven't said yet.

"Not recovering their losses" is something the insurance company should be taking up with the other party's insurer. After all, he ran into the back of the daughter's car while it was parked.

simpkin

" "Not recovering their losses" is something the insurance company should be taking up with the other party's insurer."

Agreed, and if they end up not recovering (the other driver was hospitalised, so no exchange of details at the scene/time - the police were called and should have them, but could be uninsured - who knows) , that's surely a matter to be dealt with at renewal anyway - you don;t just lump it on mid stream.