Finding flaws to void claim

arfonrhys

MCE INSURANCE LTD - CROOKS
I had a Road Traffic Accident on my motorcycle and it was deemed a total loss instantly from the fire brigades opinion. 
After making my claim with MCE INSURANCE , I was soon told my claim and policy was to be voided , as my storage location for the vehicle differed to what’s stated on the policy ie my shed is made of wood and not brick.
this has nothing to do with the incident yet they pursued on finding flaws to stop a pay out.

baring in mind my claim was a FIRE  related ROAD TRAFFIC ACCIDENT 30miles from my home address.

[Deleted User]

Make an official complaint and if that doesn't work escalate to FOS.

Unless they wouldn't have insured you at all (unlikely)  you should be able to sort this out.

Aretnap

This is standard. If you declare false information when taking out the policy, the insurer is entitled to reduce the payout or void the policy altogether. It makes no difference whether you think the information was relevant to the specific incident you are claiming for. Similarly someone who lies about having a drink driving conviction when they take out a policy is likely to find that any claim they make is declined when the insurer finds out - even if they were sober at the time of the accident.

So on the whole it's best to declare correct information. That way the problem doesn't arise - the insurer can try as hard as they like to find an excuse to reject the claim, and won't find one.

But why did you declare the shed was brick when it was actually wood?

If it was a careless error on your part (eg you ticked the wrong box on the website and didn't check that the answers were correct) then the insurer should still deal with the claim, but reduce the payout by a proportion based on how the error affected your premium. In other words, if you paid £100, instead of the £200 they would have charged had they known it was kept in a wooden shed, they should still pay out half the value of the bike. They should only reject the claim entirely if they would not have covered you at all if you'd told them the bike was kept in a wooden shed - and in that case they should at least refund your premium.

On the other hand if you deliberately gave them false information to get a cheaper quote, they would be entitled to reject the claim entirely, whether or not they'd have covered you if you'd told the truth, and they can keep your premium to boot. An example of the sort of evidence they might use to show that you did it deliberately would be if their website records showed that you'd originally ticked the box for "wooden shed", got a quote, then went back and tried "brick shed" when you didn't like the quote. Hopefully this is not what the records will show?!?!

dunstonh

If the false supply of details is considered accidental and they would have offered cover from the outset then they are required to deal with the claim and deduct any difference in premiums from your settlement or you pay the extra you should have been paying.

if the false supply of details is considered accidental but they would not have offered cover from the outset, they would void the policy, not pay out on the policy (noting 3rd party requirements).  They would refund the premium

If the false supply of details is considered to be intentional then they can void the policy and keep the premium.

So, did you intentionally lie on the application or was it an accident?   Would they have offered cover if the correct info was given?   

csgohan4

OP were you asked what the shed was made on getting the insurance? if you were, why did you not tell the truth?

paddyandstumpy

dunstonh said:

If the false supply of details is considered accidental and they would have offered cover from the outset then they are required to deal with the claim and deduct any difference in premiums from your settlement or you pay the extra you should have been paying. 

It's not often I disagree with you, but the quoted element of your reply is incorrect. @Aretnap has given the correct proceedings for innocent non disclosure. 

If they would have accepted the risk at a different price, insurers are obliged to pay a proportion of the loss, in line with the proportion of the premium you HAVE paid vs what you SHOULD HAVE paid. 

TELLIT01

If the insurer would have refused cover had they known where the motorbike was to be stored, it's to be expected that they would refuse to pay out for any claim. In that scenario the claimant would have not been covered if they had been truthful when trying to take out the policy.  If the insurer would have provided cover for storage in a wooden shed their actions in refusing any payout do seem disproportionate.

Sandtree

I have known insurers to use both methods - deduction of additional premium or apply averaging based on premiums (rather than the more typical limits).

Though in this case its hard to see how you could accidentally mistake wood for brick unless this is a bit of a misdirection and the OP stated they kept it in a garage when in reality it was kept in a shed and the insurers are arguing the difference between a garage and a shed is construction materials.

Aretnap

paddyandstumpy said:

dunstonh said:

If the false supply of details is considered accidental and they would have offered cover from the outset then they are required to deal with the claim and deduct any difference in premiums from your settlement or you pay the extra you should have been paying. 

It's not often I disagree with you, but the quoted element of your reply is incorrect. @Aretnap has given the correct proceedings for innocent non disclosure. 

If they would have accepted the risk at a different price, insurers are obliged to pay a proportion of the loss, in line with the proportion of the premium you HAVE paid vs what you SHOULD HAVE paid. 

Thanks, but if I can add a little pedantry of my own, you mean careless non disclosure rather than innocent non disclosure.

Innocent non disclosure is another class still, where the non disclosure has not resulted from any lack of care at all on the part of the customer, for example because the insurer's questions were not clearly worded, or because the fact that they failed to disclose was not something that they could reasonably have been expected to know about (for example where their house was burgled before they moved in, and they weren't told this by the previous owner). In the case of innocent non disclosure the insurer can't even reduce the payment by a proportional amount - they just have to suck it up, pay the claim in full, and ask clearer questions in future.

On the subject of unclear questions, if as Sandtree suggests the insurer's are making a distinction between a garage and a shed I think it's at least arguable that they should have defined what they meant by a garage when they asked the question, especially if the OP is not a native English speaker.

Aretnap

Sandtree said:

I have known insurers to use both methods - deduction of additional premium or apply averaging based on premiums (rather than the more typical limits).

The Consumer Insurance Act gives the insurer the right to make a proportional settlement - but not to charge the customer the additional premium. It seems that an insurer can offer to accept payment of the excess premium instead, and in most cases it will be in the customer's interests to agree (especially if it's a a biggish claim), but the insurer can't actually insist on settling the claim like that. That certainly seems to be the logic of this Ombudsman case, which they highlight in their section on non-disclosure.

https://www.financial-ombudsman.org.uk/case-studies/insurer-said-pay-extra-car-insurance-didnt-tell-points-licence-took-policy

Sandtree

There is another layer of complexity though...

If the non-disclosure is found before a claim has happened then the insurer can decide to cancel the policy with appropriate notice or apply the averaging to any future claim. You'll note that the case explicitly states this as one where there was no claim involved. Interestingly in the FOS case highlighted the customer did ultimately pay the additional premium as noted at the end of the judgement - unfortunately it doesnt say how much the premium was -v- the compensation given.

If you are at the point of claim then the insurer can no longer void the policy if the only difference the non-disclosure makes is to premium and the non-disclosure isnt considered deliberate or reckless.  Having reviewed a number of non-disclosure cases in the past on the FOS website/publications their decision making on if a non-disclosure is reckless or simply careless seems a bit of a coin flip.